Cheque Bounce Notice Format

A cheque bounce notice format is a demand notice for the dishonor of a cheque. It is a formal communication sent by the payee* to the drawer* informing that the cheque issued by him has been dishonored or bounced by the bank due to insufficient funds or other reasons.

  • Payee: the person or entity to whom the cheque is issued
  • Drawer: the person who issued the cheque

This notice serves as a warning to the drawer about the dishonored cheque and provides them with a chance to rectify the situation by making the necessary payment to the payee.

First, let’s discuss What is cheque bounce and what is the reason for it? Then we will move forward legal consequences of cheque bounce.

What is a Cheque bounce?

A “cheque bounce” or “cheque dishonor” occurs when a cheque issued by an individual or entity cannot be processed by the bank due to various reasons, resulting in the cheque not being honored and the intended payment not being made.

This situation mainly arises when there are insufficient funds in the issuer’s bank account, but there are other reasons for cheque bounce as well.

Reasons for cheque bounce or cheque dishonor

Here are some common reasons for a cheque to bounce:

Insufficient funds

The most common reason for a cheque to bounce is that the issuer’s bank account does not have enough money to honor the cheque amount.

Account Closed

If the issuer has closed their bank account or if the account is no longer active, the cheque will bounce.

Mismatch of Signature

Signature mismatch is another common reason for bouncing a cheque after insufficient funds. If the signature on the cheque does not match the one on record with the bank, the cheque may be rejected.

Stale Cheque

As per the RBI guidelines, the validity of the cheque from the Date of Issue is 3 months. After 3 months, the cheque becomes a stale one, which is equal to a dead cheque.

Therefore, a cheque presented to the bank after 3 months from the date it was issued will be bounced or dishonored.

Post-Dated Cheque

If the issuer has mentioned a future date on the cheque, the bank will not honor it until that date arrives. A post-dated cheque can be bounced if the issuer stops payment or if they do not have sufficient funds in the account on the date it is due.

Difference in Amount mentioned in words & number

Due to the difference in the amount mentioned on the cheque in words and numbers, bank may reject or dishonor the cheque.

Stop Payment Order

If the issuer instructs their bank to stop the payment on a specific cheque, it will not be honored even if there are sufficient funds.


Any irregularities on the cheque, such as alterations or missing information, can lead to its rejection.

Legal Consequences

Dishonoring a cheque due to insufficient funds is considered a criminal offense, and the recipient of the bounced cheque can take legal action against the drawer.

Under Section 138 of the Negotiable Instruments Act, of 1881, the payee can send a legal notice to the drawer within 30 days of receiving information about the dishonored cheque. The drawer then has 15 days from the receipt of the notice to make the payment.

Content of Cheque Bounce Notice

The cheque bounce notice typically includes the following information:

  1. Details of the Cheque:
    • Cheque number
    • Cheque date
    • Amount mentioned on the cheque
    • Name and address of the Payee
    • Name and address of the Drawer of the cheque
  2. Details of the Dishonored Cheque:
    • Date of presentation to the bank
    • Reason for dishonor (usually “insufficient funds” or “payment stopped”)
  3. Demand for Payment:
    • Amount to be paid (cheque amount)
    • A demand for payment within a specified time frame
  4. Legal Consequences: Explanation of the legal implications if the payment is not made within the stipulated time, including the possibility of legal action.
  5. Contact Information: Contact details of the payee for further communication and resolution.

The cheque bounce notice is an essential step before taking legal action against the drawer. If the drawer fails to make the payment within the given time frame, the payee can file a criminal complaint against the drawer under Section 138 of the Negotiable Instruments Act.

cheque bounce notice format

Format – Cheque Bounce Notice

[Your Name] [Date]

[Your Address]

[City, State, PIN]

[Email Address]

[Phone Number]

[Recipient’s Name]

[Recipient’s Address]

[City, State, PIN]

Subject: Notice of Cheque Bounce – Urgent Action Required

Dear [Recipient’s Name],

I hope this letter finds you well. I am writing to bring to your attention a matter of utmost importance regarding a recent transaction involving a cheque issued by you.

As per the details available, it has come to my notice that the cheque bearing number [Cheque Number] dated [Cheque Date] drawn on [Bank Name], account number [Account Number], and issued in favor of [Payee’s Name] has been returned unpaid due to insufficient funds.

Section 138 of the Negotiable Instruments Act, of 1881

This unfortunate incident constitutes a violation of Section 138 of the Negotiable Instruments Act, of 1881, which makes dishonor of cheques for insufficient funds a criminal offense. Consequently, I must inform you that legal action can be initiated against you unless the matter is resolved immediately.

In accordance with the provisions of the Negotiable Instruments Act, you are hereby given [15] days from the receipt of this notice to settle the outstanding amount of [Cheque Amount] [in words: (Rupees [Amount in words])] to [Payee’s Name], the payee of the dishonored cheque.

Please note that failure to adhere to this notice will leave me with no option but to pursue legal action, which may result in further financial and legal consequences for you.

To avoid any further escalation, I kindly request you to take prompt action to rectify this situation. You can settle the dues by arranging for a new cheque with sufficient funds, making an online transfer to the designated account, or any other agreed-upon means.

I expect your immediate attention to this matter and anticipate a resolution within the stipulated time frame. Should you wish to discuss this matter further or require any clarification, please do not hesitate to contact me at [Phone Number] or [Your Email Address].

Thank you for your prompt attention to this matter.


[Your Name]

[Your Signature (if sending a physical copy)]

[Contact No.]

Disclaimer: This template is a general guideline and should not be considered legal advice. It’s recommended to consult with a legal professional / lawyer to ensure compliance with applicable laws and regulations before sending this notice.

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