Document text
BY REGISTERED POST A.D. / SPEED POST [COPY ALSO BY E-MAIL]
Date: [DD/MM/YYYY]
From:
[NAME OF PAYEE / COMPANY]
[ADDRESS]
[THROUGH: AUTHORISED SIGNATORY / ADVOCATE NAME AND ENROLMENT NO., IF SENT THROUGH COUNSEL]
To:
[NAME OF DRAWER]
[S/O, D/O, W/O / DESIGNATION, IF A COMPANY OR FIRM]
[FULL ADDRESS]
[IF THE DRAWER IS A COMPANY OR FIRM: ALSO ADDRESS EACH DIRECTOR / PARTNER IN CHARGE OF ITS BUSINESS BY NAME]
Subject: Legal notice under Section 138 of the Negotiable Instruments Act, 1881 — demand for payment of ₹[AMOUNT] against dishonoured Cheque No. [CHEQUE NUMBER] dated [DD/MM/YYYY]
Sir/Madam,
Under instructions from and on behalf of [my client / myself], [NAME OF PAYEE] (hereinafter "the Payee"), this notice is served upon you as follows:
1. That you owed the Payee a sum of ₹[AMOUNT] (Rupees [AMOUNT IN WORDS] only) towards [NATURE OF THE DEBT — e.g., repayment of a loan given on DD/MM/YYYY / price of goods supplied under Invoice No. ___ dated ___ / rent for the months of ___ / fees for services rendered], which is a legally enforceable debt.
2. That in discharge of the said debt, you issued to the Payee the following cheque, drawn on your account maintained with the drawee bank:
Cheque No. Date of cheque Amount (₹) Drawn on (bank and branch) Account No. (if known)
[CHEQUE NUMBER] [DD/MM/YYYY] [AMOUNT] [DRAWEE BANK, BRANCH] [ACCOUNT NUMBER]
3. That the Payee presented the said cheque for payment through [PAYEE'S BANK AND BRANCH] on [DD/MM/YYYY], within its period of validity.
4. That the said cheque was returned unpaid by the bank with the remark "[REASON AS STATED IN THE RETURN MEMO — e.g., FUNDS INSUFFICIENT / EXCEEDS ARRANGEMENT]", by return memo dated [DD/MM/YYYY], which the Payee received on [DD/MM/YYYY].
5. That the dishonour of the said cheque for the above reason constitutes an offence punishable under Section 138 of the Negotiable Instruments Act, 1881.
6. You are hereby called upon to pay the said amount of ₹[AMOUNT] (Rupees [AMOUNT IN WORDS] only), being the amount of the said cheque, to the Payee within 15 (fifteen) days of the receipt of this notice, by [DEMAND DRAFT / BANK TRANSFER TO ACCOUNT NO. ___, IFSC ___ / CASH AGAINST RECEIPT] at the address of the Payee mentioned above.
7. Please take notice that if you fail to make the payment of the said cheque amount within the said period of 15 days, the Payee shall be constrained to file a criminal complaint against you under Sections 138 and 142 of the Negotiable Instruments Act, 1881 before the competent court, entirely at your risk as to costs and consequences, and to initiate such other civil proceedings as may be available in law for recovery of the amount together with interest and costs.
8. [OPTIONAL: The Payee further demands ₹[AMOUNT] towards the cost of this notice / interest at [RATE]% per annum from [DATE]. This demand is separate from, and without prejudice to, the demand for the cheque amount in paragraph 6.]
9. A copy of this notice has been retained in [my office / the Payee's records] for further action.
______________________________
[NAME OF PAYEE / ADVOCATE]
[DESIGNATION / FOR AND ON BEHALF OF THE PAYEE]
[MOBILE] · [E-MAIL]
Enclosures (copies):
1. Cheque No. [CHEQUE NUMBER] dated [DD/MM/YYYY]
2. Cheque return memo dated [DD/MM/YYYY]
3. [INVOICE / LOAN AGREEMENT / OTHER PROOF OF THE DEBT]
NOTES BEFORE SENDING — delete this part
Deadline 1 — send the notice: within 30 days of receiving the bank's information that the cheque was returned unpaid (Section 138, proviso (b)). Count from the date you actually received the return memo; keep proof of that date.
Deadline 2 — drawer pays: the drawer has 15 days from receiving this notice (proviso (c)). Keep the postal tracking report or acknowledgement card showing the delivery date.
Deadline 3 — file the complaint: within one month of the date the cause of action arises, i.e., after the 15 days run out without payment (Section 142(1)(b)). A delay can be condoned only if you show sufficient cause.
Where to file: the court where your own bank branch (through which you deposited the cheque) is located, or, if presented over the counter, the drawer's branch (Section 142(2)). The court is a Metropolitan Magistrate or Judicial Magistrate of the first class.
The cheque must have been presented within six months of its date or within its validity, whichever is earlier (proviso (a)).
Keep the demand for the cheque amount clear and separate from any claim for interest or costs.
Punishment under Section 138: imprisonment up to two years, or fine up to twice the cheque amount, or both. The court may order interim compensation up to 20% of the cheque amount (Section 143A). The offence is compoundable (Section 147), so settlement remains possible at any stage.
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