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Section 138 Notice

Cheque bounce notice is a clear and severe intimation to the cheque issuer that if payment is not rendered promptly, the cheque recipient may take legal action. A Notice of Section 138 must be sent to the check issuer within 30 days of check return due to validity. In case of dishonours of a cheque according to Section 138 of NI Act of the Law on Negotiable Instruments, this Notice shall be given to the defaulting debtor via a Notice from the unpaid creditor (payee) through an Advocate.

Legal Notice Example

Notice Format Under Section 138 of the NI Act


Sub.:- Legal notice under Section 138 of the Negotiable Instrument Act.


The cheque No.— dated ——for an amount of —drawn on the ————branch, was issued by you in place of discharge of your financial liabilities to us.

The said cheque was presented for payment but the same has been returned by your bank with the endorsement ————. The Bank has informed us through their cheque return memo dated ———–.

You are now asked immediately to pay the amount specified above according to section 138 of the Negotiable Instrument Act, failing which we will begin criminal proceedings against you as envisaged in the section referred to above.


Legal Notice Example - 2

[Date, Month, Year]


[Cheque Issuer Name]

 [Address line 1]

[Address line 2]

[City, State, Pin Code]

Sub: Request for payment

Dear Sir/Madam,

You agreed to purchase from me the below mentioned [goods/services] on [Date, Month, Year] at a price of [Rs. Amount in number and words] as per invoice [No. XXX].

  1. Description of [goods/services] provided.

The [goods/services] were duly delivered on [Delivery Date]. As payment for the [good/services] delivered, you issued a cheque in my favour bearing number [No. Cheque Number], dated [Cheque Date] on [Cheque Bank Name].

The cheque was duly presented to the Drawee Bank but payment has been unfortunately refused by the Drawee Bank with the endorsement – “[Funds  not  sufficient]”  vide  [Returning Memo No. ] on [Cheque Return Date].

In these circumstances, I request you to pay me the above mentioned amount of Rs. [Cheque Amount] at the earliest.

Your faithfully,

[Cheque Payee Name & Address]



Process of Registration


To issue a cheque bounce notice and get legal recourse, the following conditions must be satisfied:
1. The cheque must have been provided towards a liability.
2. The cheque should have been presented by the beneficiary within a period of 6 months of its validity.
3. The cheque must have been returned by the bank due to insufficient funds.
4. The payee makes a demand for the payment by giving a cheque bounce notice in writing, within 30 days of the receipt of information by him from the bank that funds are insufficient.
5. The cheque drawer fails to make payment of the said amount of money within 15 days of the receipt of the cheque bounce notice.
6. Legal action is initiated within one month of the date on which the cause-of-action arises.

Document Required

1. Copy of Original Cheque
2. Return Memo which was given by the Bank
3. Copy of Demand Notice
4. Postal Receipt
5. Limitation Clause


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