Cheque bounce due to the closure of account

by | Jul 26, 2019


Question asked on: 26/07/2019

I have given 28000 to my friend after some time he gave me a cheque. When I presented that cheque to the bank for its encashment, it became dishonoured due to the closure of the account. However, I have his bike ok and RTO papers and want to recover that amount by selling it. 

Advised by: Mr. Shivendra Pratap Singh, Advocate

Your friend has committed an offence under section 138 of the Negotiable Instrument Act. Where you received information from the bank about dishonour of cheque, thereupon you should send a demand notice. You cannot initiate proceeding under the Negotiable Instrument Act unless and until you send a demand notice and he refused to pay the amount within 15 days.

It would be best if you did not sell his bike because he has not pledged his motorcycle to sell in default of payment. If you sell his motorcycle without his consent, then you will commit the offence of breach of Trust. Consequently, he can lodge FIR against you for the said offence. It would be right for you to proceed under the Negotiable Instrument Act because he has committed a crime under the NI Act.

You should immediately send a demand notice to pay the 28000 rupees. If your friend does not pay the amount within 15 days from the date of receipt of the notice, then you can file a complaint under section 138 of the Negotiable Instrument Act. You will have 30 days to file such a complaint because the negotiable instrument itself fixed a limitation for filing a complaint.

If you do not file the complaint within the time prescribed under the Negotiable Instrument Act, then you have to adduce evidence for such delay. However, the court has the power to condone the delay, but inordinate delay may take away your right to file a complaint.

Section 142 of the Negotiable Instrument Act provides sufficient punishment for the dishonour of cheque therefore, no need to sell his bike and commit an offence. You should refrain from doing such a thing and proceed legally under the Negotiable Instrument Act. You should not give him a chance to file a cross-case against you.

Ask your question

Shivendra Pratap Singh

Advocate, Lucknow

Advice: 18842

Consultation: 3891

section 138 of the negotiable instrument act 1881

My friend issued a cheque for discharge of his liability but it is dishonoured due to insufficient fund. I want to know that when it can be said that offence under section 138 has committed.  Dishonour of cheque is an offence under Section 138 of the Negotiable...

What to do when someone forcefully took signed cheque book

What to do when someone forcefully took signed cheque bookMy friend forcefully took my signed cheque book and presented nine cheques in the bank. All cheques have bounced due to insufficient fund in my saving bank account. After that, he sent a legal notice to make...

When can I file complaint in cheque bounce case

When can I file complaint for the offence of dishonour of cheque? Dishonouring of cheque for insufficiency of fund in the account is generally called bounce of cheque. Section 138 of the Negotiable Instrument Act 1881 envisages bounce of cheque is an offence and also...

Section 142 of The Negotiable Instruments Act, 1881

I am a software engineer and working in Infosys. One of my colleagues met financial hardship and requested from me to give five lakh rupees. I remitted that amount in his bank account. I have evidence to prove that he took an unsecured loan from me. After seven months...

Trial of cheque bounce case

I like to file a check bounce case in fast track court. a. Is there any specific procedure for applying a case in fast track court? b. Will I get a quick judgement than the normal court?( I have heard check bounce cases pending for 3 years in normal court) c. is it...

quick Advice

Get A Quick Advice

Book an appointment for 15 minutes and consult with an expert over the phone within minutes

Talk to Advocate Shivendra


Book a phone consultation for 30 minutes and get solid advice on the phone

Book it Now