Filing a civil suit in a cheque bounce case involves several steps, including issuing a legal notice, preparing the necessary documentation, and following the correct legal procedures. Below is a detailed guide on how to file a civil suit in a cheque bounce case in India:
1. Understanding Cheque Bounce Cases
A cheque bounce, or dishonor of cheque, occurs when a cheque is presented for payment, but the bank refuses to honor it due to insufficient funds, a mismatch of signatures, or other reasons. In India, cheque bounce cases are primarily governed by Section 138 of the Negotiable Instruments Act, 1881. The Act provides both civil and criminal remedies to the aggrieved party.
2. Civil vs. Criminal Proceedings in Cheque Bounce Cases
- Criminal Proceedings: Under Section 138 of the Negotiable Instruments Act, the payee (the person to whom the cheque is issued) can file a criminal complaint against the drawer (the person who issued the cheque) if the cheque bounces.
- Civil Proceedings: In addition to or instead of criminal proceedings, the payee can file a civil suit for the recovery of the cheque amount, along with any interest or damages.
3. Legal Notice Under Section 138 of the Negotiable Instruments Act
Before filing a civil suit, it is mandatory to issue a legal notice to the drawer of the cheque. This notice serves as a formal demand for payment.
A. Issuing a Legal Notice
- Time Frame: The legal notice must be issued within 30 days from the date of receiving the cheque return memo from the bank, which indicates that the cheque has bounced.
- Content of the Notice: The notice should include:
- Details of the Cheque: The cheque number, date of issuance, and amount.
- Reason for Dishonor: The reason provided by the bank for the dishonor of the cheque.
- Demand for Payment: A demand for the payment of the cheque amount within 15 days from the receipt of the notice.
- Consequences of Non-Payment: A statement that legal action will be initiated if the payment is not made within the stipulated time.
- Mode of Sending: The notice should be sent via registered post or courier, and it is advisable to retain the proof of dispatch.
- Waiting Period: After issuing the legal notice, the drawer is given 15 days to make the payment. If the payment is not made within this period, the payee can proceed with filing a civil suit.
4. Filing a Civil Suit for Cheque Bounce
If the drawer fails to comply with the legal notice, the payee can file a civil suit for the recovery of the cheque amount.
A. Preparation Before Filing the Suit
- Documentation: Gather all relevant documents, including:
- The dishonored cheque.
- The bank’s return memo.
- A copy of the legal notice sent to the drawer.
- Proof of dispatch and receipt of the notice.
- Any correspondence between the parties related to the payment.
- Cause of Action: Clearly define the cause of action, which includes the issuance of the cheque, its dishonor, and the failure of the drawer to make the payment after the legal notice.
- Jurisdiction: Determine the appropriate court to file the suit. The suit can be filed in the court where:
- The cheque was presented.
- The cheque was dishonored.
- The notice was served.
- The drawer resides or conducts business.
- Court Fees: Pay the requisite court fees based on the amount claimed in the suit. Court fees vary from state to state.
B. Drafting the Plaint
The plaint is the legal document that initiates a civil suit. It should be carefully drafted and must include the following:
- Title of the Suit: The title should mention the names of the plaintiff (payee) and the defendant (drawer).
- Brief Facts: A brief description of the facts leading to the cheque bounce, including the issuance of the cheque, its dishonor, and the failure to make payment.
- Legal Grounds: The legal grounds on which the suit is filed, citing relevant provisions of the Negotiable Instruments Act and any other applicable laws.
- Relief Sought: The specific relief sought, including:
- The recovery of the cheque amount.
- Interest on the cheque amount.
- Compensation for any additional damages incurred due to the dishonor of the cheque.
- Verification: The plaint must be verified by the plaintiff, affirming that the facts stated in the plaint are true to the best of their knowledge.
C. Filing the Suit
- Submission to Court: The plaint, along with all supporting documents, must be submitted to the appropriate court.
- Issuance of Summons: Once the court accepts the plaint, it issues a summons to the defendant (drawer) to appear in court and respond to the allegations.
- Service of Summons: The summons, along with a copy of the plaint, must be served to the defendant. The court will typically handle the service of summons, but the plaintiff may also be required to assist in this process.
5. Proceedings in Court
Once the civil suit is filed and the summons is served, the following steps occur:
- Written Statement by Defendant: The defendant is required to file a written statement in response to the plaint, addressing the allegations and presenting their defense.
- Replication by Plaintiff: The plaintiff may file a replication to counter the defendant’s written statement, if necessary.
- Framing of Issues: The court frames the issues to be decided in the case, based on the plaint, written statement, and replication.
- Evidence: Both parties are given an opportunity to present evidence to support their claims. This may include witness testimony, documents, and expert opinions.
- Arguments: After the evidence is presented, both parties will make their arguments before the court.
- Judgment: Based on the evidence and arguments, the court will deliver its judgment. If the court rules in favor of the plaintiff, it will order the defendant to pay the claimed amount, along with any interest or damages.
6. Execution of the Court’s Decree
If the court passes a decree in favor of the plaintiff, the defendant is legally obligated to comply with the court’s order. If the defendant fails to make the payment as ordered by the court, the plaintiff can initiate execution proceedings to enforce the decree.
7. FAQs on Filing a Civil Suit in Cheque Bounce Cases
Q1: Can I file both criminal and civil cases for a cheque bounce?
Yes, you can file both a criminal complaint under Section 138 of the Negotiable Instruments Act and a civil suit for the recovery of the cheque amount.
Q2: What is the time limit for filing a civil suit in a cheque bounce case?
The time limit for filing a civil suit for the recovery of the cheque amount is three years from the date of the cheque’s dishonor.
Q3: What are the consequences if the defendant fails to comply with the court’s decree?
If the defendant fails to comply with the court’s decree, the plaintiff can initiate execution proceedings, which may include attaching the defendant’s property or assets to recover the amount.
Q4: Can I claim interest or damages in a civil suit for cheque bounce?
Yes, you can claim interest on the cheque amount and seek compensation for any additional damages incurred due to the dishonor of the cheque.
8. Conclusion
Filing a civil suit in a cheque bounce case is a legal remedy available to the payee for recovering the amount due on the dishonored cheque. The process involves issuing a legal notice, gathering necessary documentation, and following the legal procedure to file the suit in the appropriate court. Civil suits can be pursued alongside criminal complaints to ensure that the aggrieved party receives the rightful amount, along with any additional compensation.
Disclaimer: This information is intended for general guidance only and does not constitute legal advice. Please consult with a qualified lawyer for personalized advice specific to your situation.
Advocate J.S. Rohilla (Civil & Criminal Lawyer in Indore)
Contact: 88271 22304