Cheque declined by bank

First you assertain why he obscanted .  Purposefully  he cheated then Send a legal notice with the support of local lawyer.

Hello,

If a cheque is dishonored then you can file a cheque bouncing case u/s. 138 of Negotiable Instruments Act. Issue him legal notice and later on approach court and file complaint against him. 

Send the cheque and challan by local speed post for credit of the account and request the bank in covering letter to return the cheque with such reason for dishonor with such cheque returned memo, if not paid immediately on receipt of the envelope.

OR

If you have an account with some other bank, credit the cheque with another bank branch and let the cheque be presented through clearing.

The payee is entitled either to such payment or return of the cheque stating reasons for such dishonor.  I never heard a rejection of cheque for collection by a Collecting Banker.  In this case, the Collecting banker stepped into the shoes of a paying banker and illegally rejecting the acceptance of a cheque for collection.  This amounts to a serious deficiency of service.  As per NIA if the Collecting banker's negligence is there he is liable for the delay and negligence.

Maybe the Shop Keeper (your Cousin's Customer) also has an account in the same bank as your Cousin and that is why they could inform you that there is not enough balance in the account. You may give a letter to the bank that since the cheque is issued to you as consideration for the products purchased, you need an official Cheque Return Memo with the reason for returning mentioned therein. Bank shall comply. May be you have to contact the Branch Manager for the purpose.

If the bank has returned the cheque without honoring it for payment citing the reasons thereto, you send a legal notice to the  shopkeeper demanding the payment of amount mentioned in the cheque immediately within 15 days from the date of receipt of the said notice.

Ater that if the accused do not respond or comply with the demands made, you may file a cheque bounce case under section 138 of NI Act. 

Originally posted by : Vasu Singh
	My cousins own a business of distribution of electronics to local shops. One of the shopkeepers did the payment through cheque and when my cousin went to deposit the cheque, he was informed that he cannot do so as the payee had an insufficient balance. The shopkeeper is missing as we are trying to contact him. Can you please give me legal advice as to what can be done in such cases?

Get the cheque dishonoured, find out present  if possible.

Otherwise use last known address and initiate action under section 138 / 142 / 141 of the Negotiable Instruments Act, 1881 through a local prudent lawyer.