Q. I am a shop owner and one of my customers bought some articles from my shop. He made payment through cheque and I accepted the same. But after two days when I submitted the cheque before the bank, I came to know that the cheque was dishonoured due to insufficient amount. How can I recover the amount from him?
Cheques are used by many companies in almost all transactions like re-payment of loan, payment of salary, bills, fees etc. and it still remains a reliable method of payment. Cheques are processed by banks and cleared on daily basis. Usually cheques should be crossed and written Account Payee only, to avoid misuse of cheques. As Section 6 of the Negotiable Instruments Act defines cheque is a bill of exchange drawn on specified banker and paid only on demand which includes electronic form of cheques too. When the cheque is dishonoured then a person can file a suit for recovery of the cheque amount along with the cost and interest under order 34 of Civil Procedure Code 1908. A criminal complaint under Section 138 of Negotiable Instrument Act can be done but before that a statutory notice has to be given to the other party.
Under Section 138 main elements that are necessary to form a case are, the cheque should be issued for discharge in whole or part of any debt which should be presented within 6 months and holder should have issued a notice in writing to drawer within 30 days of receipt from the bank with regard to return of cheque as unpaid. And when receipt of said notice is given by holder, the drawer should have failed to pay the cheque within 15days of receipt of notice. When cheque is dishonoured drawee bank gives cheque return memo to banker of payee stating the reason for non-payment which is given to the payee too. The payee can sue the defaulter. Under Section 138 dishonour of cheque is a criminal offence and can be punished by imprisonment up to 2 years or fine or both. If drawer pays off the cheque amount within 15 days of the notice given then it cannot be considered an offence. In AneetaHada vs M/S Godfather Travels & Tours on (8 May, 2008) which was heard under Section 138 of the Act relating to dishonour of cheque for insufficiency of funds in the account, it was held that prosecution can be made against the company but also it can be initiated against every person who was responsible for the conduct of business of company.
by Sushma Javare.