What is Section 138 Notice?
Section 138 Notice can be used when a cheque has bounced or payment wasn’t received. It enables the beneficiary to send a notice to the cheque issuer under Section 138 of the Negotiable Instruments Act, within 30 days of cheque return/non-payment. It is a serious and a firm order to the cheque issuer that if the payment isn’t processed, the beneficiary will proceed further action. Getting filed under section 138 notice is a punishable offense.
How to use it?
The notice should contain a reference to Section 138 of the Negotiable Instruments Act, information about when the cheque was presented, the reason for non-realization of payment and a request to the cheque issuer to arrange for payment through alternate means. A Section 138 Notice must be presented to the cheque issuer within 30 days of return of cheque due to non-payment to be valid. It should also mention the amount payable and the order details if necessary.
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