What if notice is sent after 30 days?

Answer

A:

Under Section 138 of the Negotiable Instruments Act, 1881, the payee must send a legal demand notice to the drawer within 30 days of receiving the bank’s cheque return memo. This time limit is mandatory. If the notice is sent after 30 days, it becomes invalid and the complaint will not be maintainable.

• The law provides a strict time frame to ensure speedy resolution of cheque bounce cases.

• A notice sent after 30 days fails to meet the statutory requirement, which means the drawer cannot be legally compelled under Section 138 based on that notice.

1. Re-present the Cheque (if valid period not expired)

   • A cheque is valid for 3 months from the date of issue.

   • If the 3-month validity is still left, the payee can re-present the cheque to the bank.

   • If it bounces again, a fresh cause of action arises, and a new notice can be sent within 30 days of that dishonour.

2. Civil Remedies

   • Even if the Section 138 complaint becomes invalid due to late notice, the payee can still file a civil recovery suit to recover the amount, along with interest and costs.

3. Negotiation or Settlement

   • The payee may also try to settle the matter out of court through negotiation, compromise, or a one-time settlement.

Courts have consistently held that if the notice under Section 138 NI Act is not issued within the prescribed 30-day period, the complaint is not maintainable. However, the payee can still exercise other legal remedies as mentioned above.

If a cheque bounce notice is sent after 30 days, it is invalid under Section 138 NI Act. To preserve your rights, you must either re-present the cheque within its validity period or proceed with civil remedies for recovery.