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CA Foundation · Business Laws · The Negotiable Instruments Act, 1881

Rekha issues a cheque for Rs 50,000 to Salim. The bank returns it unpaid for 'insufficient funds'. Salim wants to prosecute Rekha for the offence of dishonour of cheque. Within what period after receiving the bank's return memo must Salim give a written demand notice to Rekha?

Salim must send the written demand notice within 30 days of receiving the bank's information that the cheque was returned unpaid. Rekha then gets 15 days from receiving the notice to pay. If she does not pay, Salim can file a complaint.

  1. A15 days
  2. B30 daysCorrect
  3. C45 days
  4. D3 months

Explanation

The payee must give a written notice demanding payment to the drawer within 30 days of receiving information from the bank about the return of the cheque as unpaid. The drawer then has 15 days from receipt of the notice to pay. A 15-day demand period is therefore the drawer's time to pay, not the payee's time to send the notice.

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