Received a cheque bounce legal notice? What should I Do?

If a cheque issued by you is dishonoured, the holder of the cheque is generally required to send a legal notice before taking the matter to court. Through this notice, the holder demands payment of the cheque amount. If the amount is actually payable by you and the cheque was dishonoured because sufficient funds were not available in your account, but you now genuinely wish to make the payment, you may make payment of the dishonoured cheque amount within the legally prescribed period after receipt of the notice. If you make the payment, the cause of action for complaint under section 138 ordinary does not arise and the holder cannot validly proceed with a cheque bounce complaint.

However, if you believe that the cheque was not issued for the amount mentioned in the notice, or that the cheque has been forged, misused, or wrongly presented, you should not ignore the notice. You should also not wait carelessly for a further notice or summons from the court. The notice stage itself is important and should be dealt with carefully. It is generally advisable to send a proper reply mentioning the correct facts. A well-drafted reply may help show that you did not accept the allegations silently and that you had raised your defence at the earliest opportunity. If the matter later goes to court, such a reply may be treated as an important circumstance while examining whether your stand has been consistent from the beginning. Therefore, where the notice does not correctly reflect the transaction, the reply should carefully state the true position, such as the real purpose of the cheque, the actual amount involved, any payment already made, or any misuse of the cheque. A casual or emotional reply should be avoided, but a clear and factual reply can be important.

In some cases, the matter may also be settled at the notice stage itself, depending on the facts and the attitude of both sides. In financial disputes, an early practical resolution may sometimes help avoid further complications. However, even settlement should be approached carefully and with a proper understanding of the actual liability and the terms of settlement.