Prerequisite for filing a Cheque Bounce Case – Issuance of Notice
- The payee/holder of the cheque has to send a legal notice by Registered Post/Speed Post/Courier/Email to the drawer of the cheque/defaulter within 30 days from the date of receiving the “Cheque Return Memo/Dishonour Memo” from the Bank. If the said notice is not properly issued/served to the drawer/defaulter of the cheque, or if there is no intimation of delivery, the Complaint will not be taken up or registered in the Court.
- Law prescribes that the drawer/defaulter must be given a period of 15 days from the date of receipt of the notice to repay the cheque amount.
- If the drawer/defaulter does not repay the amount with 15 days of having received the notice, a complaint under Section 138 of the Negotiable Instruments Act, 1881 should be filed within 30 days from the date on which the repayment period of 15 days expires.
Who can file a Complaint?
The payee/holder of a dishonoured cheque can file a complaint.
When should the Complaint be filed?
The Complaint is to be filed within 30 days from the date on which the repayment period of 15 days expires.
Against whom can a Complaint be filed?
The Complaint is filed by the payee/holder of the dishonoured cheque against the drawer of the cheque.
Where should the Complaint be filed?
The Complaint should be filed in the Magistrate Court. Each Judge (in this case known as Magistrate) will have certain areas covered under them (called as Jurisdiction). Therefore the Complaint should be filed before the Magistrate who has jurisdiction over the area where the Payee/Holder’s bank’s branch is located. In order to find out the jurisdictional Magistrate, you can contact your Bank or the area police station or the Magistrate Court or your lawyer. It is to be noted that the branch in which the cheque has been deposited will not determine the jurisdiction of the Court.
Procedure/steps followed in Court
- Complaint – to be filed under Section 138 of the NI Act before the Magistrate Court wherein the Payee/Complainant should be present in Court at the time of filing such a complaint. At the time of filing the Complaint, all the original documents will be verified by the Magistrate and marked as Exhibits.
- Sworn Statement – This is an Affidavit which will be filed by the Complainant before Court. The Sworn Statement, in usual course, is recorded on the same day as filing of the complaint if all the documents are in order. The Sworn Statement is also taken as the Payee/Complainant’s evidence.
- Summons – Issued to the Drawer/Defaulter through Court or in some cases by the Police, intimating the Drawer to appear before the Court on the date mentioned in the summons.
- Bail – Once the Accused receives the summons, he/she will have to appear in Court on the date mentioned in the summons along with his/her Advocate who shall file a bail application. Please note that, when the Accused applies for bail, he/she will either have to give a personal bond for an amount which will be decided by the Court as Surety amount or he/she will have to be accompanied by any of his/her family or friend who will act as a Surety. In such a case, Surety Application will be filed along with the Bail Application along with income certificate/land records (of the surety) and the person who is providing Surety will have to be present in Court along with the Accused. Since this offence is a bailable offence, the Court will immediately grant bail, provided the procedure has been carried out correctly.
- Plea – The Court will ask the Accused if he/she pleads guilty to the offence of having dishonoured the cheque. If the Accused accepts the offence, he/she will have to plead guilty. If he/she doesn’t, then he can plead not guilty and choose to raise a defence.
- Evidence by the Complainant – If sworn statement has been filed by the Payee/Complainant, as mentioned above and original documents marked as exhibits, then the Court will automatically move on to the next stage.
- Cross Examination of the Complainant – the Advocate representing the Accused will have to file an application to cross examine the payee/Complainant and once the court allows the said application, the Advocate representing the Accused will cross examine (ask questions) to the Complainant.
- 313 Statement – In this stage, the Court will ask a few questions to the Accused regarding the offence and record his/her statement. Thereafter, the Accused may given an opportunity to present his/her defence, if he/she requests for the same.
- Evidence by the Accused, if any – The Accused may provide his/her evidence by way of an Affidavit and submit documents supporting his/her case, to be marked as exhibits, if any.
- Cross Examination of the Accused – the Advocate representing the Complainant will cross examine the Accused.
- Arguments to be addressed by the Complainant Advocate
- Arguments to be addressed by the Accused Advocate and the Complainant Advocate will be given a chance to reply.
By Suraj Anand
Law Student, IME Law College, Ghaziabad
Legal Intern, Lex Excel – Advocates & Solicitors