Whom to Implead in a Cheque-Bounce Case in India

Implead means to bring someone into a legal proceeding as a party - either as a plaintiff (person bringing the case) or as a defendant (person being sued).

In simple terms, it’s adding someone to a case so that the court can decide their rights or liabilities in that matter.

Example:

• In a cheque bounce case, if a company issued the cheque, the complainant may implead not only the company but also the directors who were responsible for issuing the cheque.

• This means they are officially named in the complaint, so they can be held liable in court.

Origin:
From Latin implicare (to entangle), in legal usage, it means to involve someone in a lawsuit.

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Quick guide: 

1. Main conditions for filing a Section 138 case
   • The cheque must cover an existing debt or legal liability.
   • Present it to the bank within three months of the cheque date.
   • The bank must return it unpaid with a remark like “insufficient funds” or “exceeds arrangement.”
   • Send a written demand notice within 30 days of receiving the bank’s return memo.
   • If the drawer does not pay within 15 days of getting the notice, you may file a complaint.
   • File the complaint within the next 30 days (the court can excuse a delay for good cause).

2. Whom to name as accused

•  Individual cheque-drawer → name that person.
• Sole proprietorship → name the proprietor (the business name is only a trade style).
•  Partnership firm → name the firm and every partner who managed the business when the cheque was issued.
• Company or LLP → name the company/LLP, each person who controlled day-to-day affairs on the cheque date (such as managing or whole-time directors, CFO, or accounts officer), and the person who actually signed the cheque. Non-executive or independent directors are liable only if you show they took part in daily management.

1. How to draft and serve the statutory notice
   • State the cheque number, date, amount, bank return memo date, and reason.
   • Demand the amount within 15 days of receipt.
   • Post separate letters or e-mails to each accused and keep proof of dispatch.
   • If the envelope is refused, unclaimed, or the door is locked, service is still valid if the address is correct.

2. Simple timeline
   • Day 0 : receive the bank memo.
   • By Day 30 : send the notice.
   • Day 30–45 : wait 15 days for payment.
   • Day 46–75 : file the complaint (later filing needs court’s permission).

3. Where to file
   File the case at the court that serves the branch of the payee’s bank where the cheque was presented.

4. Penalties and money remedies
   • Jail: up to two years (only for individuals).
   • Fine: up to double the cheque amount.
   • Interim compensation: the court may order the drawer to deposit up to 20 per cent of the amount at the start of the case.
   • Appeal deposit: a convicted drawer who appeals may have to deposit at least 20 per cent.

5. Legal presumptions and defences
   • The law presumes the cheque was for a debt; the accused must disprove this on the balance of probabilities.
   • Possible defences: the cheque was given as security, the debt is time-barred, someone altered the cheque, or no enforceable liability exists.
   • A stop-payment order alone is not a full defence if a debt is due.

6. Procedure points
   

   • Short trial, written proof works:
     Cheque-bounce cases usually run as quick “summary” trials. Instead of bringing every witness to court, you can hand in a sworn written statement (affidavit) and the judge reads it.

   • You can settle anytime:
     If the payee (person who should get the money) agrees, you can pay up and have the case closed at any stage - even after conviction or during appeal.

   • Each cheque is its own case- unless the judge combines them:
     Every dishonoured cheque normally needs its own notice and complaint. However, if several cheques are issued from a single transaction, the court may allow them to be tried together.

   • Lost the original bank memo? A copy is fine:
     The slip or print-out from the bank showing “insufficient funds” is enough evidence, even if you only have a duplicate or computer copy.

   • Courts often send parties to mediation or Lok Adalat:
     The judge may refer both sides to a mediation centre. If you reach a written settlement there, the criminal case ends the same day.

7. Checklist before filing

• Collect the original cheque, bank memo, copy of the notice, and postal or e-mail proofs.

• Get board resolutions or partnership deeds to show who managed the business.

• List the company or firm first, then each responsible individual.

• State in the complaint that every individual accused handled daily business when the cheque was drawn.