Cause of action for prosecution for bouncing of cheque arises only if
Question and options
Cause of action for prosecution for bouncing of cheque arises only if
- Payment is not made within 15 days of a demand notice sent within 30 days
- Three months’ notice is given and the amount still remains unpaid
- The cheque is dishonoured on a third presentation
- One hundred days notice is given and the amount still remains unpaid
Answer and explanation
Correct answer: A - Payment is not made within 15 days of a demand notice sent within 30 days
Under the proviso to Section 138 of the Negotiable Instruments Act, 1881, the payee must send the drawer a written notice demanding payment within 30 days of receiving information of the dishonour, and the offence is complete only when the drawer fails to pay within 15 days of receiving that notice. The cheque must also have been presented within three months or its validity, whichever is earlier, but no three-month or hundred-day notice is required, and a single dishonour is enough; there is no need for a third presentation.
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