Cheque Dishonour Cases in Bangladesh: Understanding the Law and Legal Procedure
In Bangladesh, a cheque dishonour, often referred to as a “bounced cheque,” is not merely a financial inconvenience but a serious legal offense. It is primarily governed by the Negotiable Instruments Act, 1881, specifically Section 138 and its subsequent amendments. This law provides a robust framework to protect creditors and ensure the sanctity of financial commitments made through cheques.
Understanding the legal provisions and procedural steps involved in a cheque dishonour case is vital for both payees (the recipient of the cheque) seeking to recover their money and drawers (the issuer of the cheque) who might face legal action. If you’re searching for “cheque dishonour lawyer Dhaka”, “how to file cheque bounce case Bangladesh”, or “legal action for bounced cheque in Bangladesh”, you’ve come to the right place for clear information.
The Legal Framework: Negotiable Instruments Act, 1881 (Section 138)
Section 138 of the Negotiable Instruments Act, 1881, as amended, outlines the conditions under which the dishonour of a cheque becomes a criminal offense. For a cheque dishonour to constitute an offense under this section, the following conditions must generally be met:
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Issuance for Discharge of Debt or Liability: The cheque must have been issued by the drawer to discharge, in whole or in part, any legally enforceable debt or other liability. Cheques given as gifts or for illegal purposes are typically not covered.
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Dishonour Due to Insufficient Funds: The cheque must be returned unpaid by the bank because the amount of money standing to the credit of the account of the drawer is insufficient to honour the cheque, or it exceeds the amount arranged to be paid from that account by an agreement made with that bank.
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Presentation within Validity Period: The cheque must be presented to the bank within six months from the date on which it is drawn or within the period of its validity, whichever is earlier.
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Legal Notice (Demand Notice): The payee (or holder in due course) must make a demand for payment of the said amount of money by giving a written notice to the drawer within thirty days of receiving information from the bank regarding the return of the cheque as unpaid.
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Failure to Pay within Notice Period: The drawer must fail to make the payment of the said amount of money to the payee within thirty days of the receipt of the said notice.
Punishment:
If found guilty under Section 138, the drawer can be punished with imprisonment for a term which may extend to one year, or with a fine which may extend to thrice the amount of the cheque, or with both.
Legal Procedure for Filing a Cheque Dishonour Case:
The process of filing a cheque dishonour case in Bangladesh involves several critical steps:
Step 1: Presentation of the Cheque and Obtaining Dishonour Slip
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Action: The payee must present the cheque to their bank for encashment within its validity period (usually 6 months from the date of issue).
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Outcome: If the cheque bounces, the bank will return the cheque to the payee along with a “cheque return memo” or “dishonour slip,” indicating the reason for dishonour (e.g., “insufficient funds,” “account closed,” “payment stopped”). This slip is crucial evidence.
Step 2: Issuing a Legal Notice (Demand Notice)
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Timeframe: Within 30 days of receiving the cheque return memo, the payee (through their lawyer) must issue a written legal notice to the drawer.
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Content of Notice: The notice must clearly state:
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Details of the cheque (cheque number, date, amount, bank name).
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The fact that the cheque was dishonoured.
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The amount of the dishonoured cheque.
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A demand for the payment of the cheque amount.
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A warning that legal action will be initiated if payment is not made within the stipulated period.
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Delivery: The notice should be sent via registered post with acknowledgment due (AD) or by a professional courier service, ensuring proof of delivery. This is vital for establishing that the drawer received the notice.
Step 3: Waiting Period for Payment
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Timeframe: After receiving the legal notice, the drawer has 30 days to make the payment to the payee.
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Outcome: If the drawer makes the payment within this period, the matter is resolved, and no further legal action can be taken under Section 138.
Step 4: Filing the Case in Court (Complaint Petition)
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Timeframe: If the drawer fails to make payment within 30 days of receiving the legal notice, the payee has 30 days from the expiry of that 30-day period to file a complaint petition (case) in the appropriate court. This means the case must be filed within 60 days of the drawer’s receipt of the notice.
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Jurisdiction: The case is typically filed in the Court of a Metropolitan Magistrate or a Judicial Magistrate First Class in whose jurisdiction the bank branch of the payee is located, or where the cheque was issued, or where the legal notice was served.
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Documents Required: The complaint petition should be accompanied by:
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The original dishonoured cheque.
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The original cheque return memo/dishonour slip from the bank.
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A copy of the legal notice.
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The postal receipt and acknowledgment due card (or courier receipt) as proof of service of the legal notice.
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Any other relevant documents proving the debt or liability.
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Step 5: Hearing and Summons/Warrant
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Initial Hearing: The court will examine the complaint and the accompanying documents.
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Issuance of Process: If the court finds a prima facie case, it will issue a summons to the drawer to appear before the court. If the drawer fails to appear after receiving the summons, an arrest warrant may be issued.
Step 6: Trial Proceedings
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Appearance of Drawer: Once the drawer appears, they will be given an opportunity to explain why the cheque was dishonoured.
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Evidence and Cross-Examination: Both parties will present their evidence. The payee will prove the debt, the issuance of the cheque, its dishonour, the sending of the legal notice, and the drawer’s failure to pay. The drawer can then present their defense (e.g., cheque was not issued for a valid debt, payment already made, forged signature, cheque stolen, etc.).
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Witnesses: Witnesses may be called and cross-examined.
Step 7: Judgment and Sentence
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Decision: After reviewing all evidence and arguments, the court will deliver its judgment.
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Conviction/Acquittal: If the drawer is found guilty, they will be convicted and sentenced according to Section 138 (imprisonment, fine, or both). If not guilty, they will be acquitted.
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Compensation: The court may also order the drawer to pay compensation (the cheque amount, often with interest) to the payee.
Key Considerations:
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Time Limitation: Strict adherence to timeframes for sending the legal notice and filing the case is crucial. Any delay beyond the stipulated periods can lead to the dismissal of the case.
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Legally Enforceable Debt: It is essential to prove that the cheque was issued for a legally enforceable debt or liability.
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Negotiation and Settlement: Even after a case is filed, parties can always opt for out-of-court settlement, and the court often encourages this.
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Appeals: Both the payee and the drawer have the right to appeal a judgment to a higher court.
Seeking Expert Legal Help for Cheque Dishonour Cases
Navigating the complexities of cheque dishonour cases requires precise legal knowledge and strategic execution. Whether you are a payee seeking to recover your rightful funds or a drawer facing legal action, expert legal counsel is indispensable.
If you are searching for “best lawyer for cheque dishonour case in Dhaka”, “legal advice on bounced cheque Bangladesh”, or “how to sue for unpaid cheque in Bangladesh”, Bay of Legal is here to assist. Our experienced team specializes in financial litigation and can guide you through every step of the process, ensuring your rights are protected and the best possible outcome is achieved.
Don’t let a dishonoured cheque become a prolonged burden. Contact Bay of Legal today for comprehensive legal support. Visit our website at bayoflegal.com or reach out to us directly for any queries you may have. We are committed to providing effective and timely legal solutions.