A notice under Section 138 of the Negotiable Instruments Act is a legal document that a payee sends to the drawer of a dishonored cheque, demanding payment of the amount specified in the cheque within 15 days. It serves as a prerequisite for filing a complaint under Section 138 of the Act, which deals with the offense of dishonor of cheques. The notice must be in writing and served within 30 days of receiving the dishonor memo from the bank.
Key elements of the notice:
Identification of Parties:
The notice should clearly state the names and addresses of both the payee (the person to whom the cheque was issued) and the drawer (the person who issued the cheque).
Cheque Details:
It must specify the cheque number, date, amount, and the name of the bank and branch on which the cheque was drawn.
Reason for Dishonor:
The notice should state the reason for the cheque's dishonor as mentioned in the bank's memo (e.g., "insufficient funds," "signature not matching").
Demand for Payment:
The notice must demand the payment of the cheque amount within 15 days of receiving the notice.
Consequences of Non-Payment:
It should also clearly state that if the payment is not made within the stipulated time, the payee intends to initiate criminal proceedings under Section 138 of the Negotiable Instruments Act.
Time Limit:
The notice must be sent within 30 days of receiving the bank's memo regarding the dishonor.
Importance of the notice:
Legal Requirement:
Sending a legal notice is a mandatory requirement before filing a complaint under Section 138.
Opportunity to Pay:
It provides the drawer with an opportunity to make the payment and avoid legal action.
Evidence:
The notice and the postal receipt serve as crucial evidence in the court proceedings.

[ADVOCATE’S LETTERHEAD]

Date: [Insert Date]
To,
[Drawer's Name]
[Drawer’s Address]

Subject: Legal Notice under Section 138 of the Negotiable Instruments Act, 1881

Sir/Madam,
Under the instructions of my client, [Client’s Full Name], residing at [Client’s Address], I hereby issue you the following legal notice:

1. That you issued a cheque bearing No. [Cheque Number], dated [Date], for ₹ [Amount], drawn on [Bank Name & Branch], in discharge of your legally enforceable liability towards my client.

2. That my client presented the said cheque with their banker, [Client’s Bank Name], but it was dishonoured and returned unpaid with the remarks "[Reason – e.g., Insufficient Funds]" on [Date of Return].

3. That despite several requests and reminders, you have failed to make the payment of the said amount to my client.

4. That your act of issuing a cheque without sufficient funds constitutes an offence under Section 138 of the Negotiable Instruments Act, 1881.

You are hereby called upon to pay the amount of ₹ [Cheque Amount] to my client within 15 days from the date of receipt of this notice. If you fail to do so, my client shall be constrained to initiate criminal proceedings against you under Section 138 of the NI Act, without any further notice, at your risk, cost, and consequences.

This notice is issued without prejudice to my client’s other legal rights and remedies.

Sincerely,
[Name of Advocate]
[Advocate’s Address and Contact Number]
[Bar Enrollment Number]

A model draft of notice under Section 138 of the Negotiable Instruments Act is a formal legal notice sent by the payee (complainant) to the drawer of a bounced cheque, demanding payment within 15 days of receiving the notice. It includes details like the cheque number, amount, date of issue, reason for dishonour, and a clear demand for payment. If the drawer fails to pay within the stipulated time, the payee can initiate criminal proceedings under Section 138.