Reply to Demand Notice in Cheque Bounce Cases
When a cheque is dishonoured, the payee issues a demand notice under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). The drawer (the person who issued the cheque) must reply within the legal time limit to avoid escalation into a criminal case and also cheque bounce case.
- What Is a Demand Notice?
A demand notice is a legal communication served by the payee when a cheque bounces. It demands repayment of the cheque amount within 15 days. It must contain:
a. Cheque details (number, date, bank)
b. Reason for dishonour as per bank memo
c. Reference to Section 138 NI Act
- How to Reply to a Demand Notice
- Read Carefully: Verify cheque details, amount claimed, and timeline.
b. Consult a Lawyer: A lawyer ensures the reply is legally valid and avoids mistakes.
c. Draft the Reply: The reply should acknowledge receipt, accept or deny liability, and include evidence.
d. Send on Time: Dispatch the reply within 15 days via registered post or courier. - Role of a Lawyer in Replying to Demand Notice
- Drafting the reply without harmful admissions.
b. Preparing a strong defense if liability is disputed.
c. Representing you in court if the case proceeds.
d. Negotiating settlement before litigation.
A lawyer for cheque bounce reply can help you avoid criminal prosecution under Section 138 NI Act.
FAQs on Reply to Demand Notice
You must reply within 15 days of receiving the notice.
Yes, otherwise the complainant can file a case under Section 138 NI Act.
Yes, by paying within 15 days you can avoid a case.
The complainant may file a criminal case against you.
Yes, and it is strongly recommended.
Cheque details, acceptance/denial of liability, and supporting evidence.
Yes, but you must provide valid reasons and documents.
Mention this clearly with proof in your reply.
No, it must be through registered post or courier.
Yes, if you pay within 15 days, no case can be filed.