Cheque dishonour disputes are highly procedural. A cheque being returned unpaid can create a potential legal issue, but the subsequent steps and statutory requirements matter significantly.
Anyone considering a Section 138 NI Act Lawyer should avoid treating the returned cheque as the only document required.
Businesses, creditors, professionals, and individuals in Bengaluru dealing with cheque dishonour should preserve the complete transaction record immediately.
Why Was the Cheque Issued?
The underlying transaction is important.
The cheque may relate to a loan, business payment, invoice, supply arrangement, professional service, contractual obligation, or another legally relevant liability.
Documents showing why the cheque was issued can therefore become important.
These may include:
- Agreements
- Invoices
- Account statements
- Loan documents
- Purchase orders
- Delivery records
- Written acknowledgements
- Emails and messages
The legal assessment should consider the complete transaction rather than examining the cheque separately.
Preserve the Bank Return Information
When a cheque is dishonoured, the bank's return memo or relevant dishonour record should be preserved.
The reason stated by the bank may become relevant to subsequent proceedings.
Parties should keep copies of the cheque and associated banking records together with the transaction documentation.
Statutory Timelines Matter
Section 138 proceedings involve legally prescribed procedural steps and timelines.
This makes delay particularly risky.
A person receiving information about dishonour should obtain advice promptly regarding the applicable notice requirements, limitation periods, and subsequent procedure.
Relying on informal negotiations while statutory deadlines continue to run can create avoidable complications.
The Legal Notice Is an Important Stage
A statutory demand notice is not merely an ordinary payment reminder.
Its content, timing, delivery, and relationship to the dishonoured cheque can have legal significance.
Records relating to dispatch and delivery should therefore be maintained carefully.
Parties should avoid copying generic notices from the internet without considering the specific transaction and applicable requirements.
What If Payment Is Still Not Made?
If statutory conditions are satisfied and the matter remains unresolved, proceedings may be considered before the appropriate court.
Jurisdiction and procedural compliance need to be examined based on the applicable legal framework.
The complainant should be prepared with the relevant original documents and supporting transaction records.
What Should the Accused Do?
A person receiving a Section 138 notice or summons should not ignore it.
The underlying liability, cheque transaction, documents, payments already made, communications between parties, and available legal defences require careful review.
Assuming that a cheque dishonour allegation automatically proves every element of the complaint is also incorrect.
Advocate Ankur Tripathi & Associates handles cheque dishonour and related litigation matters for clients in Bengaluru.
Whether pursuing a claim or responding to one, early review of the cheque, return memo, underlying transaction, notice, delivery records, and relevant dates can help identify the procedural position accurately.
In cheque dishonour matters, documentation and timing are not secondary considerations. They are central parts of the legal process.
