Definition of Negotiable Instruments (NI)-
A negotiable instrument is a signed paper that promises a sum of payment to a defined person or the appointee. In other words, it is a formalized type of IOU: A transferable, signed document that agrees to pay the bearer a sum of money at a future date or on-demand. The payee, who is the person getting the payment, necessity be named or otherwise indicated on the instrument.
Because they are movable and assignable, some negotiable instruments may trade on a secondary business.
Common Types of Negotiable Instruments are:
Section 4 of the Negotiable Instruments Act specifies promissory notes. The definition states promissory notes are instruments in writing and they are, however, neither bank notes nor currency notes which also include this feature. The maker of these notes allows paying a certain sum either to a particular person or their bearers. This maker undertakes his responsibility to pay by attaching his signature on the records.
Bill of exchange-
Section 5 of the Negotiable Instruments Act, 1881 describes bills of exchange. According to this explanation, a bill of exchange is an instrument in writing including an absolute order. Furthermore, the bill’s maker directs a particular person to pay some money either to a specific person or its bearer.
This definition is similar to that of promissory notes but there are some variations between them. Hence, the primary elements, parties, and rules governing these two negotiable instruments are different.
Section 6 of the Negotiable Instruments Act explains what a ‘cheque’ means. According to this provision, a cheque is a bill of exchange drawn on a particular banker. Moreover, it is not payable contrarily than on-demand.
The Negotiable Instruments (Amendment) Act had amended this description to make it more obvious in 2015. Accordingly, cheques now enter the automatic image of a truncated cheque and also an electronic cheque. Notwithstanding this amendment, the basic meaning remains the same.
The essential characteristics of a cheque are mentioned as follows:
The drawee must present cases of the default by the drawer.
The following are the main topics to remember:
Explicit order for payments of dues with interest is responsible to be paid within 15 days of getting the notice.
Case Filing Procedure of Cheque Bounce-
Draft a complaint?
A complaint is only affected when the drawer has not responded to the charge notice within 15 days from the dispatch of the notice or has been holding payment casually or has out rightly denied to pay the amount. A complaint is to be filed in the court which would have the jurisdiction over the conflict within the directed time limit of 30 days (from the date of acceptance of the demand notice by the drawer).
It is relevant to know which court the drawee should approach in a cheque bounce case. The drawee can register the complaint in a court within whose local limits of jurisdiction any of the latter incidents may have arisen:
The drawee must have all the important documents before filing the complaint, for instance,
Every lawsuit process demands payment of court fees. Likewise, while filing a cheque bounce objection, the drawee (complainant) has to pay a standard amount of court fees which differs from case to case and entirely depends on the cheque amount against which the complaint is being filed court.
The standard court fee structure varies for different cheque amounts which are mentioned below:
Cheque Amount Court Fee
Once the complaint is filed by the drawee (complainant), the court issues summons to the drawer (accused person) who has failed to make payment and gave an occasional cheque.
It is desirable to make the cheque bounce complaint with the help/ support of an expert cheque bounce lawyer of thelegalbank. The complaint must forward all the relevant/ helpful evidence like the first cheque that was returned by the bank, the cheque return memo, demand notice sent against non-payment/ cheque bounce, acceptance of legal notice and any other relevant document that can be used as evidence to support one’s legal position that the accused is responsible to pay the unpaid amount with interest as deemed fit by the court for all the mental and physical trauma caused due to court procedure.
Once the complete trial is over and if the accused is got wrong, then he can be punished with a financial penalty which can be double the cheque amount or be punished with imprisonment which may extend to 2 years or even both.
The Vakalatnama must be presented on the first date of hearing/ filing of the complaint with the signatures of the complainant who is the client of the advocate.
Civil or Criminal action toward the drawer (accused) –
A dishonoured cheque in all possibility can result in both a civil as well as a criminal prosecution against the drawer if the drawee (complainant) does not get the payment that was initially agreed.
An aggrieved drawee (potential complainant) who has been on the getting end of a cheque bounce has 2 options available to him for lawsuits. First, to file a lawsuit under Section- 138 (cheque bounce) of the Negotiable Instruments Act, 1881 or second, a lawsuit under Section- 420 (cheating and dishonesty) of the Indian Penal Code, 1860.
Now, in case a lawsuit against the drawer is ground for cheating under Section- 420 of the IPC, the court can issue a non- bailable warrant against the drawer of the cheque. Although to institute a lawsuit under this section, a case of cheating and dishonesty needs to be verified against the drawer.
In conditions of multiple bouncing of cheques, the law allows filing separate cases for separate cheques bounced.
Cheque bounce suit filing process in short:-
Following a lapse of 15 days from the date of delivery of the demand letter, if no payment has been accepted, there is a 30 day period to file the objection before a magistrate upon the payer.
Court Process for filing a case-
1. The court issues an amount as fee depending on the amount declared on the cheque.
2. Memo (Vakalatnama) of Advocate on with signatures of the complainant is required at the time of filing a case.
3. All records are cross-checked by the Judicial Magistrate First Class after the case is filed by the complainant in court. For this procedure, original cheque (bounced), a copy of the notice, original memo, receipt of the post office, acknowledgment receipt, and receipt of the U.P.C. are required.
4. The period of limitation is also confirmed at this stage.
5. The Process Form, known as the Bhatta, is filed by the complainant or lawyer, along with the address of the accused.
6. The court then proceeds a summon to the accused to appear in court on a particular date.
7. If the accused does not present in court on the date of hearing, the court issues a bailable warrant on the application of the complainant.
8. If the accused still violate the court and does not appear for the hearing, the court may issue a non-bailable warrant of arrest.
Some other points to keep in mind are as follows
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