Bounced cheques are the most common offences linked to the financial world. A cheque can be dishonored for various reasons but the primary reason being insufficiency of funds, signature mismatch, post dated cheques, or corrections in the cheque without authentication. The defaulter pays a penalty to the bank when the cheque bounces.
Demand Notice is sent between 30 days from the date the cheque has bounced. The purpose of the notice is to demand payment and inform the issuer that he or she will be prosecuted, if payment is not made between 15 days. So a Demand Notice contains the following --- Statement, stating that the cheque is presented during its period of validity. Information giving the reason of dishonor, of the cheque. A statement giving the drawer 15 days to pay the amount or a legal action would be taken. This notice only needs to be vetted by a laywer and send by registered post or courier.
A canceled cheque is one which is crossed and the word “Cancelled” is written on it. If a cheque is canceled the cheque cannot be misused, but it provides the account no, cheque no and the MICR code information. Canceled cheque is used for opening a bank account; this completes the account opening process. KYC or Know Your Customer formalities require a cancelled cheque to prove that the account is valid till date. EMIs of different types home loans, car loans, education loans have EMI payments. The bank or company would ask for a cancelled cheque. In case of EPF or employee provident fund account, a cancelled cheque needs to be submitted to the organization, as it would help to validate the account. Cancelled cheque does not allow money to be withdrawn, but there have been cases where it has been misused. So ensure the cancelled cheque is given to the right person to be used.
Recovering a bounced cheque is very difficult specially if the account is closed from where the cheque had been issued. One way out in such a case would be to file an FRI in the police station. Besides a Criminal Complaint case under the issuer can also be filed under section 138 of Negotiable Instruments Act. As a result the chequq issuer undergoes a punishment for a term of two ears. Alternatively a summary suit for recovery can also be filed under 37 of the Code of Civil Procedure. Approach a good lawyer and he would be the right person to handle cases.
Demand Notice is sent between 30 days from the date the cheque has bounced. The purpose of the notice is to demand payment and inform the issuer that he or she will be prosecuted, if payment is not made between 15 days. So a Demand Notice contains the following --- Statement, stating that the cheque is presented during its period of validity. Information giving the reason of dishonor, of the cheque. A statement giving the drawer 15 days to pay the amount or a legal action would be taken. This notice only needs to be vetted by a laywer and send by registered post or courier.
A canceled cheque is one which is crossed and the word “Cancelled” is written on it. If a cheque is canceled the cheque cannot be misused, but it provides the account no, cheque no and the MICR code information. Canceled cheque is used for opening a bank account; this completes the account opening process. KYC or Know Your Customer formalities require a cancelled cheque to prove that the account is valid till date. EMIs of different types home loans, car loans, education loans have EMI payments. The bank or company would ask for a cancelled cheque. In case of EPF or employee provident fund account, a cancelled cheque needs to be submitted to the organization, as it would help to validate the account. Cancelled cheque does not allow money to be withdrawn, but there have been cases where it has been misused. So ensure the cancelled cheque is given to the right person to be used.
Recovering a bounced cheque is very difficult specially if the account is closed from where the cheque had been issued. One way out in such a case would be to file an FRI in the police station. Besides a Criminal Complaint case under the issuer can also be filed under section 138 of Negotiable Instruments Act. As a result the chequq issuer undergoes a punishment for a term of two ears. Alternatively a summary suit for recovery can also be filed under 37 of the Code of Civil Procedure. Approach a good lawyer and he would be the right person to handle cases.
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