Notice Under the Negotiable Instruments Act Regarding a Dishonoured Cheque (India) by OLL
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NOTICE UNDER NEGOTIABLE INSTRUMENTS ACT REGARDING DISHONOUR CHEQUE
REGISTERED A.D.
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To,
Mr..............................................……………
RESI....................................……………………
Sub:- Notice under Section 138 of the Negotiable Instruments Act for Cheque Dishonoured due to insufficient funds.
Dear Sir,
Under instructions and authority from our client M/s. ____________________________ having their office at _____________________________, we serve upon you the following notice of demand under Section 138 of the Negotiable Instruments Act.
1. That your business concern M/s ______________________________ had purchased from my client goods (Name and brief description of goods) vide their invoice bearing no. _________ dated __________________ for Rs.__________________
2. On delivery of goods above mentioned, you issued a cheque bearing no. ____ dated _________ for Rs._______drawn on ____ Bank.
3. That when the aforesaid cheque was presented by our client M/s. ______________ to your Bankers i.e. _____________________ the same was returned unpaid by the Bank with the remarks/reasons "Insufficient Funds". This fact was brought to your notice by our client vide letter dated______________________.
4. That in reply to our client’s letter, you sent a letter dated ________________ requesting him to deposit the cheque again with banker and assured him that they will be cleared this time.
5. My client again presented your above mentioned cheque with its bankers, this time again cheque was returned un-paid by the bank due to insufficient funds.
6. That thereafter inspite of many telephonic reminders and personal visits by the representative of our client to your office, you failed to make the payment due to our client.
7. That on account of the above facts, you are liable to be prosecuted under section 138 of the Negotiable Instrument Act, 1881 as amended upto date under which you are liable to be punished with imprisonment which may extend to one year or with fine which may extend to twice the amount of cheque or with both.
8. Under the circumstances, we call upon you to make the payment of Rs.____________ _____ being the principal amount of the aforesaid cheque along with interest @ ____ % per annum till the time of actual payment within a period of 15 (fifteen) days from the date of receipt of this notice, failing which we will be bound to take further necessary action under the provisions of Negotiable Instrument Act, 1881 against you in the competent court of law at your risk and cost.
This is without prejudice to all other legal rights and remedies available to our client for the above-stated purpose.
Kindly take notice.
Date:____________ Yours faithfully,
This template is a formal legal notice sent by a lawyer on behalf of a client to a person or business whose cheque has been dishonoured due to insufficient funds. It demands payment within 15 days and warns of potential criminal prosecution under Section 138 of the Negotiable Instruments Act in India.
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About this template
What is this template?
This document is a formal statutory notice sent via Registered A.D. to a defaulting party. It contains specific references to Section 138 of the Negotiable Instruments Act and sets a 15-day cure period. It is not a civil debt collection letter or a court filing, but a mandatory precursor to criminal litigation in India.
When should you use it?
Use this notice when a cheque has been dishonoured by a bank due to insufficient funds and you intend to initiate criminal proceedings if not paid. Use a standard Letter of Demand if you are only seeking civil recovery without invoking the specific penalties of the 1881 Act.
What's inside
| Clause | Name | What it does |
|---|---|---|
| Introductory Paragraph | Notice of Demand | Invokes Section 138 of the Negotiable Instruments Act to demand payment from a business concern following a cheque dishonour. |
| 3 | Reason for Return | Identifies 'Insufficient Funds' as the specific remark provided by the bank when the cheque was returned unpaid. |
| 7 | Statutory Liability | Warns the recipient of potential imprisonment up to one year or a fine extending to twice the cheque amount. |
| 8 | Payment Deadline | Requires payment of the principal amount and interest within 15 days of receipt to avoid further legal action. |
Who it's for
- an Indian business seeking payment for goods sold after a client's cheque was returned for insufficient funds
- a legal practitioner issuing a statutory demand notice prior to filing a criminal complaint under the Negotiable Instruments Act
How long it runs and how it's signed
Law it's drafted under
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