Notice to a partnership firm by an advocate on behalf of banking company for the issue of cheque against term loan which on its presentment got dishonoured for the reason of  “insufficiency of funds”

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

To

1. Name …………………………(of firm)
Address…………………………
…………………………………

2. Name ………………………..(Partner)
Address…………………………
…………………………………

3. Name ………………………..(Partner)
Address..………………………
…………………………………

4. Name ………………………..(Signatory Officer)
…………………………………
…………………………………

Subject : Dishonour of Cheque
Sir,

Under instructions from and on behalf of my client M/s. ………………………. (Bank), a bank constituted and functioning under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its Head Office at …………….. and business office, a Branch Office at …………….. we have to serve you with the following notice :

1. That you on ……………………….(Date) approached my client for the purpose of sanctioning of a term loan to the tune of Rs. …………….. and you requested for the same.

2. That on ………… (Date), while acting on your request, my client sanctioned you a term loan on certain conditions, one of which was that you had to issue post dated cheques for the repayment of the loan by way of instalments. For this purpose you issued ………. (No. of cheques).

3. That for the sake of repayment of loan my client presented on its due maturity one of the cheques for the first time which was dated…………, bearing No. …………………, drawn on …………… (Bank) which was dishonoured for the reason of insufficiency of funds.

4. That the cheque got dishonoured on ………….. (Date) of which my client got the information on …………….. (Date).

5. That the term loan was sanctioned on your request and on your promises and assurances that the cheques so issued by you would in no circumstances be dishonoured for any reason whatsoever and had my client known that on its presentation the cheques would be dishonoured, they would not have granted and disbursed the above said loan.

6. That in all, the cheque which was issued by you in discharge of your liability/debt which has been dishonoured for the reason of insufficiency of funds. That the cheque so issued was for the purpose of deceiving my above said clients so that the loan could be taken as the cheque was issued without sufficient funds in your account nor any arrangement has been made for the payment of the same.

7. That thereafter my client(s) has been running from pillar to post to contact you but you have been avoiding the same.

8. That having understood that you issued the cheques to my client(s) against the sanctioning and disbursement of loan for the amount which you never had in your account at the time of issue of cheques and, therefore, it can be inferred that you took the loan by deceiving my client(s) when you issued the cheques knowing fully well that you had insufficient funds in your account to honour the same or the amount of the cheque exceed the arrangement that you had made with your banker.

9. 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.

10. 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 legal and 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 …..% per annum which comes to Rs. …………… and Rs. ……………… towards the cost of this notice, within a period of ….. days from the date of receipt of this legal notice, failing which I have definite instructions from my client(s) to take appropriate legal action, civil as well as criminal, particularly under section 138 of the Negotiable Instrument 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 truly,

Sd/-

(Advocate)