Understanding Cheque Bounce (Account Closed) – A Guide by Legal Light Consulting

A bounced cheque can be a frustrating experience, especially when it involves your hard-earned salary or wages. If you’ve received a cheque that bounced because the drawer’s (employer’s) account was closed, it’s important to know your rights and the legal steps you can take.

At Legal Light Consulting, we aim to simplify the process for you. This article explains what to do if a cheque bounces due to a closed account and how you can protect your rights

What is a Cheque Bounce Due to a Closed Account?

A cheque bounce due to a closed account occurs when the bank cannot process the cheque because the drawer (your employer) has closed the account from which the cheque was issued. In this case, the cheque was issued to you as payment for your salary or wages.

Evidence to Support Your Case

To prove that the cheque was issued for a valid transaction, you can use the following types of evidence:

1. Written Evidence
   • Employment Agreement
   • Memorandum of Understanding (MOU)
   • Salary Invoice or Payslip
2. Digital Evidence
   • Emails
   • WhatsApp messages
   • Text messages

When filing a complaint, only include details of the specific transaction for which the cheque was issued. If the drawer (employer) denies the transaction, you can present the above evidence to support your claim.

Key Details of the Case

• Cheque Amount: Rs. 15,00,00,000/- (15 Crores)
• Return Memo Date: 01-01-2025 (the date the bank informed you the cheque bounced)

Legal Remedies Available

If a cheque bounces due to a closed account, you have several legal options:

1. Criminal Proceedings

• Under the Negotiable Instruments Act, 1881
  • Section 138: This section deals with the dishonor of cheques, including cases where the account is closed.
  • Steps to Take:
    • Serve a legal notice to the drawer (employer) within 30 days of receiving the return memo (by 31-01-2025).
    • If the cheque is still valid, you can re-present it to the bank within 90 days of the cheque date to restart the legal process.
  • Territorial Jurisdiction: UCO Bank, Supreme Court of India.
• Filing an FIR for Cheating (Under Bharatiya Nyaya Sanhita, 2023)
  • Section 318: Cheating
  • Time Limit: File before 01-01-2026 (1 year from the return memo date).
• Filing an FIR for Breach of Trust (Under Bharatiya Nyaya Sanhita, 2023)
  • Section 316: Criminal Breach of Trust
  • Time Limit: File before 01-01-2028 (3 years from the return memo date).

2. Mediation

• Mediation is a process where both parties try to resolve the dispute with the help of a neutral mediator.
• Under the Mediation Act, 2023:
  • Mediation is mandatory if a notice has been served.
  • If mediation fails, you can proceed with legal action.

3. Recovery Suit (Under Civil Procedure Code, 1908)

• You can file a civil suit to recover the cheque amount.
• Time Limit: File before 01-01-2028 (3 years from the return memo date).
• Court Fees: Rs. 14,66,344/-
• Jurisdiction: High Courts of Delhi

Important Advice

• Under Sections 138 and 139 of the Negotiable Instruments Act, the drawer (employer) is presumed to be liable unless they challenge the claim.
• If the drawer challenges the liability, you must provide evidence to prove your case. This can include written or digital evidence.
• Many court cases have been decided in favor of the drawer when the drawee (you) failed to provide sufficient evidence.

Why Seek Professional Help?

Legal processes can be complex, especially in high-value cases like this. Proper evidence, timely action, and expert legal representation are crucial for a successful outcome. At Legal Light Consulting, our team of experienced lawyers can guide you through every step, ensuring your case is handled smoothly and effectively.

Disclaimer

This article is for educational and informational purposes only. It does not constitute legal advice. For personalized guidance, consult the legal experts at Legal Light Consulting. We are here to help you navigate the legal system with confidence.