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Posted by legal services on February 25th, 2020

Introduction
When a cheque is presented at the bank and it is returned unpaid, then it is called as cheque bounce. In such a scenario, a legal notice for cheque dishonour is given to the person who issued the cheque. Such a notice for cheque bounce is considered as a threat and intimation to the person issuing that cheque in lieu of non-payment. It is considered as offence in India and punishable with imprisonment or fine under Section 138 of the Negotiable Instruments (NI) Act. Therefore, a notice for cheque bounce must be presented within 30 days of cheque return to the cheque issuer.
Reasons for Cheque bounce
There are many reasons for cheque bounce/Dishonour of cheques – such as:
Lack of funds in the bank account of the person issuing the cheque
In case of minors holding a bank account wherein the signatures on the cheque do not match with the original signature of the person who issued the cheque
If the cheque has expired as the validity of a cheque is up to 3 months
Post Dated Cheques (PDC) which are cheques issued for a future date that is being deposited earlier than they are due.
There is a great chance for the cheque to bounce if the cheque has any alteration in the words and in numbers for the amount payable.
When the details of cheque are unclear
A cheque can be dishonoured because of any kind of scribbling, overwriting, correction etc.
When Can Legal Notice for Cheque Dishonour Be Issued?
A legal notice for cheque is an intimation that the beneficiary of cheque will proceed with the institution of legal proceedings if the payment of money is not done. Such a cheque is sent by the advocate on behalf of the plaintiff to the defaulter. The following are the conditions that must be met for to issue a legal notice for cheque bounce which are provided under section 138 of the Negotiable Instruments Act.
A liability must incur on the cheque.
The cheque must have not expired and it should necessarily be presented within 6 months.
The bank should have returned the cheque due to insufficient funds.
The cheque drawer didn’t make payment within 15 days of the receipt of the legal notice for cheque bounce. 
Legal proceeding is initiated within 30 days whence the notice for such dishonour of cheque is served upon.
Issuance and Reply of legal notice for cheque bounce
There is a specific format to issue a legal notice towards dishonour of cheque. The notice should contain only legitimate facts and amount because the person serving such a notice has to substantiate his claims in the court of law. The facts and details provided in the notice cannot be denied later on. Similarly, it is important for the defaulter to reply to such a legal notice. Upon receiving such a notice, the defaulter has two option; either to pay the amount and to settle the matter amicably or to defend himself by sending a legal reply.
Though it is not mandatory to send such a reply, it is very much advisable to do so. A reply should clearly state the intention of the defaulters to either accept or refute the claims of the legal notice received by him. In absence of such a reply, it would be construed as acceptance of the facts and allegations mentioned in the legal notice.
Once you receive a notice for cheque bounce, it’s very important to send a reply to the same.  The reply to a legal notice must contain the following points:
Name, description, and place of residence of the sender of the notice.
Particulars of the cause of action.
Acceptance or denial of allegations of the notice.
Summary of your defence to the issue appealed.

Conclusion

The first thing that one should do after receiving a legal notice is to aim at resolving the dispute amicably. It is not mandatory, but advisable to send a reply to the legal notice. The other party is at an advantage if the defaulter fails to send a reply to the legal notice and the opponent may leverage the situation to this advantage. The opponents while drafting the petition may accuse the defaulter for not following to the requirements of the notice. Such a scenario will create a tough situation for defaulter. If in your opinion, the facts stated in a legal notice are false and you need to contest the legal notice, then you can consult an experienced lawyer, take his assistance and draft a proper reply to the notice denying the contents of the notice. You must send the notice via registered post or courier. It is necessary to consider the fact whether the claims are times barred or not.  To Konw More Click Here