In short
Your EMI auto-debit bounced? The lender may send a notice under Section 25 of the PSS Act. Don't panic, and don't ignore it.
What is it?
When your EMI is collected by ECS or NACH and the debit fails because there is not enough money, the lender may send you a notice under Section 25 of the Payment and Settlement Systems Act, 2007. This section works much like Section 138 of the Negotiable Instruments Act does for bounced cheques.
Why it matters
A notice like this can have a deadline. If you ignore it, the lender may file a complaint in court.
Notice aa gaya? What to do
- Read the notice carefully. Note the date you received it and any deadline in it.
- Check the facts. Was the debit really for that amount? Was the mandate valid?
- Keep your bank statement showing the failed debit.
- Talk to the lender about paying or a plan, in writing.
- Get legal advice on the reply and the time limits that apply to you (see the note below).
We can help you understand the notice in plain words and talk to the lender. We are not a law firm and cannot draft legal replies.
Related: Section 138 notice reply · Loan default and legal notices
Quick answer
If an EMI auto-debit (ECS or NACH) bounces for lack of funds, the lender can send a demand notice under Section 25 of the Payment and Settlement Systems Act, 2007, within 30 days of learning of the bounce. The offence is complete only if you don't pay within 15 days of receiving that notice. Don't ignore it.
Real situations
Example: say your salary was delayed and the NACH for your EMI bounced on the 5th. If a notice arrives, note the receipt date; your 15 days start then.
Example: say a debit failed because your bank mandate was cancelled, not for lack of funds. That difference matters; get your bank's return reason in writing.
Example: say the notice demands an amount that includes months you already paid. Ask the lender for a statement of account and keep your bank statements.
Get help
See our legal notice help · 7979789458
Sources
Frequently Asked Questions
What is a Section 25 PSS Act notice?
A notice a lender may send when your ECS or NACH EMI debit fails for lack of funds. It works much like Section 138 does for bounced cheques.
What should I do when I get one?
Note the date and any deadline, check the facts, keep your bank statement, talk to the lender in writing and get legal advice on the reply.