Cheque bounce

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 July 2013 I have given a sum of Rs. 2,50,000/- on 01.02.2013 to my friend to run his small business (already started a year back) as credit. I took two PD cheques from him for Rs.1,50,000/- & Rs. 1,00,000/- dtd 30.04.2013 with an agreement between us (signed & thumb impressed by me & him) saying that the amount to be return to me by him within cheque date. If he fails to do the same i could deposit those PDC. He didn't paid me back within cut off date. Later I came to know he is misusing approx 95% of the profit of that business, so, it is under loss. If he goes to sell that business also it doesn't value more than a lakh, but it is in running condition means have sufficient orders. Meantime I have followed up for my money till first week of July 13 and i didn't get any positive reply from him, so I deposited those Chqs on 10.07.2013 in my account. They got bounced & reached me by 16.07.2013 with bank memos saying that Insufficient funds. After that also I tried to contact him by phone & phisical, but no response. Now I want to send a legal notice. Is it OK if I send legal notice after 30.07.2013 (chqs valid date) or Should i have to send within that ? what are the tactics ? what law says ? Please help me brothers.....

Mallesh Reddy A

Mallesh Reddy A (Expert)
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22 July 2013 You have not specified how you have lent money - by cash or by cheque (through banking chennel)
However, the steps to be taken is as under:
Step I
You have to issue:
a. notice to the drawer of the cheque, under registered post with Ack.Due,
b. within 30 days of the date of bouncing of cheque
c. demanding repayment of the amount noted in the cheques
d. giving 15 days time to repay, from the date of the notice
e. expressing your intention to file criminal case under sec.138 of Negotiable Instruments Act 1881, in case the repayment is not received within time noted.

Step II
a. need to file criminal case under Sec.138 of N.I.Act within 30 days from the due date given for repayment
b. submiting to court the cheque, return memo, notice copy and other relevant documents of the transaction of lending

Step III
- your friend may get a jail term of 2 years if he fails to repay - look at this?

Querist : Anonymous

Querist : Anonymous (Querist)

25 July 2013 I understood sir, I paid money to him by cash.

If I go to court how long it may takes to clear means how much time the court may give to him to repay my money ?

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Mallesh Reddy A

Mallesh Reddy A (Expert)
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25 July 2013 a. It depends on how fast you would prove that the money transaction has indeed taken place between you and that he has issued these cheques to repay the same.
b. Court will not give any time for repayment

Querist : Anonymous

Querist : Anonymous (Querist)

25 July 2013 OK sir, I have an agreement to prove your Ist point.

But will court not give any time ? then how we can expect the date for this clearance ?

Mallesh Reddy A

Mallesh Reddy A (Expert)
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26 July 2013 Court will pass orders/decree for payment and for prosecution if the orders are not obeyed.

Querist : Anonymous

Querist : Anonymous (Querist)

26 July 2013 Thank you very much sir