A Section 138 Notice is issued when a cheque bounces or payment is not received. It allows the beneficiary to send a formal notice to the cheque issuer under Section 138 of the Negotiable Instruments Act, within 30 days of the cheque being returned or payment failing. This notice serves as a serious and firm warning to the issuer, stating that if the payment is not made promptly, the beneficiary will initiate legal proceedings. Being served a Section 138 notice is a serious matter and can lead to legal penalties if not addressed.
The Section 138 Notice should clearly reference Section 138 of the Negotiable Instruments Act and include details such as the date the cheque was presented and the reason for its dishonor or non-payment. It must also request the cheque issuer to arrange payment through alternate means. To be valid, this notice must be sent within 30 days from the date the cheque was returned due to non-payment. Additionally, the notice should specify the exact amount payable and include any relevant order or transaction details if applicable.
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