Notice by an individual payee to the individual drawer when one cheque is dishonoured which was issued for the repayment of loan with the endorsement on the return memo as “Refer to Drawer”

Name : ……………………
            ……………………
Office: ……………………
            ……………………
Residence: ……………………
            ……………………
Date :   ……………………
Regd. A.D./U.P.C

To

Name ………………………..
Address………………………

Subject : Dishonour of Cheque

Sir,

Please take the following legal notice :

1. That as you know that you approached me through Mr. …………………., for the advancement of some loan in your favour.

2. That you succeeded in reposing confidence in me for the repayment of loan at the right time through your assurances and through the issue of a post-dated cheque for the amount of loan which was dated……………, i.e., the date on which the loan was to be paid back to me. The said cheque was bearing No. ………….. which was issued on ……….. (Name of the banker).

3. That on this much of assurance and particularly on the issue of the post-dated cheque, I advanced you a loan of Rs. ……………

4. That the above stated cheque has been dishonoured on its presentment with the endorsement “Refer to Drawer” on …………. (Date) vide Returning Memo No. ………… of which I got the information on ……….. (Date) from the bank. That the cheque is in fact dishonoured for the reason of “insufficiency of funds” and for your failure to arrange with your bank for the said sum of money. Had I known that on its presentment the cheque so issued would be dishonoured I would never have advanced you the loan.

5. That in all, the cheque which was issued  by you in discharge of your liability/debt has been dishonoured for the reason of insufficiency  of funds irrespective of the endorsement on the returning memo.

6. That thereafter I have been running from pillar to post to contact you but you have been avoiding the same.

7. That now I have understood that you issued the cheque to me against the aforesaid loan for the amount which you never had in your account at the time of issue of cheque and, therefore, it can be inferred that you look the loan by deceiving me when you issued the cheque knowing fully well that you had insufficient funds in your account to honour the same.
8. That it is now clear that your intentions were not good when you issued the above stated cheque as you had issued the cheque for the amount which you did not have in your account nor any arrangement had been made for such amount with the result that the cheque stood dishonoured.

9. That as the cheque is dishonoured for the reason of “insufficiency of funds” you may be held liable, civilly as well as criminally, particularly under section 420 of the Indian Penal Code, 1860, section 138 of the Negotiable Instruments Act, 1881 as amended upto date as also under Order XXXVII of the Code of Civil Procedure, 1908 and for this purpose this mandatory notice is served upon you.

I, therefore, hereby call upon you to pay the amount for which the cheque so dishonoured was issued i.e., Rs. ……………, together with interest calculated at the rate of 24% per annum which comes to Rs. ……….. and Rs. …………. towards the cost of this notice, within a period of 15 days from the date of receipt of this legal notice, failing which I am determined to take appropriate legal action, civil as well as criminal, particularly under section 138 of the Negotiable Instruments Act, 1881 as amended upto date, section 420 of the Indian Penal Code, 1860 and Order XXXVII of the Code of Civil Procedure, 1908. You shall be held responsible for all the costs and consequences for which please take this notice.

Yours faithfully,

Sd/-

(Name)…………….