One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.

Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.

Mr.X had provided goods worth Rs. 9 lakhs to Mr.Y’s business. As payment security, Mr.Y had issued 9 post-dated cheques of Rs. 1 lakh each, with monthly intervals between each cheque. When the first cheque was presented to the bank after its due date, it bounced due to insufficient funds. Mr.Y kept giving excuses over phone calls, claiming his client payments were delayed and requesting more time. However, the 30-day legal notice period had already passed for the first bounced cheque, and Mr.X was concerned about the remaining 7 pending cheques. The debtor continued making false promises about payment while avoiding any concrete action, leaving Mr.X in a difficult financial position with legal deadlines approaching.

Advice in Such Cases

Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Immediately send legal demand notice for the bounced cheque within 30 days of dishonour. Document all telephonic conversations and false promises made by the debtor. Do not deposit remaining cheques until consulting your lawyer, as premature presentation may weaken your legal position. Maintain proper records of all transactions, cheque copies, and bank dishonour memos for court proceedings.

Applicable Sections of Law

Under Bharatiya Nyaya Sanhita (BNS), Section 316 deals with cheating and dishonestly inducing delivery of property. Section 318 covers cheating with knowledge that wrongful loss may result. The Bharatiya Nagarik Suraksha Sanhita (BNSS) Section 223 provides procedure for summary trials in cheque dishonour cases. Section 199 of BNSS deals with taking cognizance of offences, while Section 226 covers the trial procedure for such financial crimes involving negotiable instruments.

If You Are the Complainant

• Send legal demand notice within 30 days of cheque dishonour through registered post
• File criminal complaint under appropriate BNS sections after notice period expires
• Gather all supporting documents including original cheques, bank statements, and dishonour memos
• Document the business relationship and transaction history that led to cheque issuance
• Maintain records of all communications and promises made by the accused party

If You Are the Victim

• Act quickly as there are strict time limitations for legal action in cheque bounce cases
• Preserve all original documents and avoid any alterations to cheques or supporting papers
• Do not accept partial payments without proper legal documentation as it may affect your case
• Avoid any settlement discussions without lawyer presence to prevent prejudicing your position
• Keep detailed records of financial losses and additional costs incurred due to the dishonoured cheques

How the Police Behave in Such Cases

Police typically treat cheque dishonour as a civil matter initially and may suggest approaching the court directly. However, if cheating and criminal breach of trust elements are present, they may register FIR under relevant BNS sections. Police investigation focuses on establishing the relationship between parties, verifying the authenticity of cheques, and examining the accused’s financial capacity and intent to defraud.

FAQs People Normally Have

Can I file case after 30 days of notice? Yes, you must file within 30 days after the notice period expires, making it 60 days total from dishonour.

What if remaining cheques also bounce? Each bounced cheque constitutes a separate offence requiring individual legal notices and complaints.

Can I recover additional costs? Yes, courts may award compensation for legal expenses and other consequential losses.

Is criminal case enough or should I file civil case too? Criminal cases focus on punishment while civil cases ensure monetary recovery, often both are advisable.

What Evidence Is Required?

• Original dishonoured cheques and photocopies
• Bank dishonour memo with reason for bounce
• Legal demand notice and postal receipts
• Business transaction documents establishing debt
• Bank statements showing insufficient funds
• Communication records including call logs, messages, emails
• Witness statements regarding transaction and cheque issuance

How Long Will the Investigation Take?

Cheque dishonour cases under BNSS typically conclude within 6 months to 2 years depending on court workload and complexity. Summary trial provisions expedite the process compared to regular criminal trials. However, if the accused contests vigorously or appeals, the matter may extend further. Prompt filing and proper documentation significantly reduce resolution time.

Advocate Sudhir Rao, Supreme Court of India