Legality of cheque dishonor in India
When does the need to serve a cheque bounce notice arise?
What are the protections offered by a Cheque Bounce Notice?
What are the contents of a Cheque Bounce Notice?
- Name and address of the drawer or the debtor.
- Name and address of the payee.
- Bank on which the cheque was drawn.
- Cheque number and date.
- Date of cheque returning paid.
- Reason for the dishonor of cheque as mentioned in the “Cheque Return Memo”.
Consequences of not sending the legal cheque bounce notice
- A copy of the cheque bounce notice served to the debtor
- The courier or post receipt as a proof of receipt of the cheque bounce notice
- Original copy of the bounced cheque
- A valid and legally acceptable proof of the amount due to the creditor as acknowledged by the debtor
- The original Cheque Return Memo issued by the drawee bank to the collecting bank.