N.i act
rajinder ansh
(Querist) 14 July 2012
This query is : Resolved
R/SIR WHAT IS THE PEROID OF THE DEMAND NOTICE UNDER SECTION138 N.I ACT 15 DAYS OR 30 DAYS ?
Nadeem Qureshi
(Expert) 14 July 2012
Dear Querist
the time period mention in the legal demand notice in negotiable Instrument Act is 15 days and the period will be count after reciving the notice to tentative accused person.
Feel free to call
138. Dishonour of cheque for insufficiency, etc., of funds in the accounts
1[CHAPTER XVII]
OF PENALTIES IN CASE OF DISHONOUR OF CERTAIN CHEQUES FOR INSUFFICIENCY OF FUNDS IN THE ACCOUNTS
Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for 2["a term which may extend to two year"], or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless-
(a) The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.
(b) The payee or the holder induce course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer, of the cheque, 3["within thirty days"] of the receipt of information by him from the bank regarding the return of the cheques as unpaid, and
(c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation: For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability].
OBJECTS AND REASONS OF AMENDING ACT OF 2002
The Negotiable Instruments Act, 1881 was amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 wherein a new Chapter XVII was incorporated for penalties in case of dishonour of cheques due fo insufficiency of funds in the account of the drawer of the cheque. These provisions were incorporated with a view to encourage the culture of use of cheques and enhancing the credibility of the instrument. The existing provisions in the Negotiable Instruments Act, 1881, namely, sections 138 to 142 in Chapter XVII have been found deficient in dealing with dishonour of cheques, Not only the punishment provided in the Act has proved to be inadequate, the procedure prescribed for the Courts to deal with such matters has been found to be cumbersome. The Courts are unable to dispose of such cases expeditiously in a time bound manner in view of the procedure contained in the Act- (Para 1)
Keeping in view the recommendations of the Standing Committee on Finance and other representations, it has been decided to bring out, inter alia, the following amendments in the Negotiable Instruments, Act, 1881, namely:-
(i) to increase the punishment as prescribed under the Act from one year to two years;
(ii) to increase the period for issue of notice by the payee to the drawer from 15 days to 30 days; (Para 4)
Guest
(Expert) 15 July 2012
I endorse the views of experts.
ashutosh mishra
(Expert) 15 July 2012
After intimation of dishonor you as payee /holder in due course are/is expected to send demand notice to drawer with in 3o days and the drawer is expected to pay you with in 15 days from receipt such notice.
V R SHROFF
(Expert) 15 July 2012
WHAT IS THE PEROID OF THE DEMAND NOTICE UNDER SECTION138 N.I ACT 15 DAYS OR 30 DAYS"
Within 30 days of Bank MEMO of Dis Chq, demand notice should be issued, and within 15 days of receipt of Demand Notice, payment shd be made,
If not recd amt, within a calender month[28 to 31 days,] lodge Compl u/s 138.
J K Agrawal
(Expert) 15 July 2012
Mr Shroff is clear on this issue.
JANAK RAJ VATSA
(Expert) 19 July 2012
notice to be issued within 30 days on receipt of the bank memo reg dishonour of cheque and 15 days period allowed for the respondent to remit the amount
