Cheque Bounced Due to Account Closure? Legal Light Consulting Can Help.

If you’ve received a cheque for your salary or wages that bounced because the employer’s account was closed, you have legal options. Legal Light Consulting is here to help you understand your rights and take appropriate action.

The Situation:

Your employer gave you a cheque for Rs. 150,000,000 as payment for your salary/wages. However, when you tried to deposit the cheque, it bounced because the account was closed. You have the following evidence to support your claim:

• Written Evidence:
  • Agreement
  • Memorandum of Understanding
  • Invoice
• Digital Evidence:
  • Emails
  • WhatsApp messages
  • Text messages

Key Information:

• The cheque return memo date is January 1, 2025.
• The bank branch that issued the return memo is UCO Bank, Supreme Court of India, New Delhi.

When a cheque bounces due to the account being closed, it can be a significant issue, especially when it pertains to salary or wages. Let’s explore the steps to address this problem, particularly for a firm like Legal Light Consulting – LLC.

Scenario Overview

• Drawer and Employer: Same entity/person.
• Reason for Cheque Issuance: Received for Salary/Wages.
• Cheque Amount: Rs. 150,000,000/-
• Return Memo Receipt Date: 01-01-2025

Types of Evidence to Support the Transaction

To support the transaction, various types of evidence can be used:

Written Evidence

1. Agreement
2. Memorandum of Understanding
3. Invoice

Digital Evidence

1. Email
2. WhatsApp messages
3. Text Messages

Legal Advice on Cheque Bounce Issues

When filing a complaint, only the details of the transaction for which the cheque has been issued should be mentioned. In case of rebuttal by the drawer, the drawee may produce the above evidence to support the transaction.

Probable Remedies and Legal Actions

Criminal Proceedings

1. Criminal Complaint under Negotiable Instruments Act

• Relevant Sections:
  • Section 117: Rules Act to Compensation
  • Section 138: Dishonor of Cheque for Insufficiency of funds
• Territorial Jurisdiction: UCO Bank, Supreme Court of India, New Delhi (Return memo issuing branch).
• Limitation:
  • Notice should be served within 30 days from 01-01-2025.
  • If the cheque is still valid and notice has not been served, it can be re-presented to the bank within 90 days to revive the limitation period and initiate legal proceedings.
• Procedural Aspects:
  • Section 142: Cognizance of Offenses
  • Section 143A: Power to direct interim compensation
  • Section 143: Power of Court to try summarily
  • Section 145: Evidence on affidavit
  • Section 146: Bank’s slip prima facie evidence of certain facts
  • Section 147: Offences to be compoundable

2. FIR for Cheating

• Relevant Sections:
  • Section 318: Cheating (Previously Section 415 of IPC, 1860)
• Territorial Jurisdiction: UCO Bank, Supreme Court of India, New Delhi.
• Limitation:
  • To file a case before 01-01-2026 (1 year).
• Procedural Aspects:
  • Section 516: Exclusion of time in certain cases

3. FIR for Breach of Trust

• Relevant Sections:
  • Section 316: Criminal Breach of Trust (Previously Section 405 of IPC, 1860)
• Territorial Jurisdiction: UCO Bank, Supreme Court of India, New Delhi.
• Limitation:
  • To file a case before 01-01-2028 (3 years).
• Procedural Aspects:
  • Section 516: Exclusion of time in certain cases

Mediation

Mediation notice has been served as mandatory.

• Relevant Sections:
  • Section 28: Challenge to mediated settlement agreement
• Procedural Aspects:
  • Section 13: Territorial jurisdiction to undertake mediation
  • Section 18: Time-limit for completion of mediation
  • Section 21: Non-Settlement report
  • Section 27: Enforcement of mediated settlement agreement
  • Section 28: Challenge to mediated settlement agreement
  • Section 29: Limitation

Recovery Suit under CPC

• Relevant Sections:
  • Order 37: Summary Procedure
  • Section 73 of Indian Contract Act, 1872: Compensation for loss or damage
  • Section 146 of Indian Contract Act, 1872: Co-sureties liable to contribute equally
• Territorial Jurisdiction: UCO Bank, Supreme Court of India, New Delhi.
• Limitation:
  • To file a case before 01-01-2028 (3 years).
• Pecuniary Jurisdiction: High Courts of Delhi
• Court Fees: Rs. 1,466,344.00/-
• Procedural Aspects:
  • Order 37 of CPC: Summary Procedure

Advice

• Section 138 & 139 of Negotiable Instruments Act: It is the drawee’s responsibility to prove the existence of liability only if the drawer challenges it.
• Evidence: Can be physical or circumstantial.
• High Courts & Supreme Court Rulings: There are cases where the drawee failed to prove their point when challenged by the drawer.

Important Legal Notes:

• When filing a complaint, focus on the transaction related to the bounced cheque.
• Be prepared to present your evidence if the employer disputes the transaction.
• As per section 138 & 139 of Negotiable Instrument Act, Initially the burden of proof is not on the drawee, but if the drawer challenges the transaction, then the burden of proof shifts to the drawee.
• Legal Light Consulting strongly advises seeking professional legal counsel. Employment law and cheque bounce cases can be complex, and your specific situation may require tailored guidance.

Disclaimer:

This article is for informational purposes only and does not constitute legal advice. For personalized legal assistance, contact Legal Light Consulting.

Conclusion

This article is for educational and informational purposes only. The information provided here is intended to offer general knowledge about legal matters but does not constitute legal advice. Legal Light Consulting, as a law firm, does not take any responsibility for the accuracy or completeness of the content shared in this article.

Due to the complexity of legal processes and potential variations