Cheque Bounce Case – Cheque Bounce Lawyers / Advocates
Cheque Bounce Case
When a Cheque is bounced / dishonored, the drawee bank immediately issues a ‘Cheque Return Memo’ to the banker of the payee mentioning the reason for non-payment. The payee’s banker then gives the bounced cheque and the memo to the payee. Bounced cheque case comes under Section 138 in The Negotiable Instruments Act, 1881. The dishonor of cheque is a criminal offence and is punishable by imprisonment up to 2 years or with monetary penalty or with both.
138 Dishonor of Cheque for insufficiency, etc., of funds in the account. —Where any Cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honor the Cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for 19 [a term which may be extended to two years], or with fine which may extend to twice the amount of the Cheque, or with both: Provided that nothing contained in this section shall apply unless—
- the Cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier
- the payee or the holder in due course of the Cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the Cheque, 20 [within thirty days] of the receipt of information by him from the bank regarding the return of the Cheque as unpaid, and
- the drawer of such Cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the Cheque, within fifteen days of the receipt of the said notice.
Explanation. — For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.
The Characteristics of a Cheque are mentioned as:
- Cheque must be in writing
- Cheque must be payable on demand
- Cheque must be for a specific sum of money
- Cheque has to be an unconditional order
- The Cheque must explicitly specify the Bank
- The payment that has to be made must be directed to an identified person/ organization
- Cheque must bear clear signatures of the drawer
Reasons For Cheque Bounce:
- Spelling mistakes
- Mistakes in dates
- Mismatching Signature
- Closed bank account
- Insufficient funds
- Inequality in the amount written in figure and words, and so on.
Filing / Drafting a Cheque Bounce Case:
The complaint should be registered in a magistrate’s court within a month of the expiry of the notice period. The Cheque should be returned due to insufficient funds. The notice should be given within 30 days of Cheque bounce. The drawer has failed to make the payments within 15 days of Cheque bounce notice, legal action can be taken against him within 30 days.
How to Escape from Cheque Bounce Case?
You can escape only from a false Cheque bounce case by having a good counsel to represent your objective. Cheque bouncing is a criminal offence in India under the provisions of section 138 of Negotiable Instrument Act. There is no way out to escape from the liability if it is due.
Cheque Bounce Charges – Process fees for filing in Court Cheque Bounce case:
When filing a Cheque bounce grievance, the complainant is required to pay court fees. The Court fees vary depending upon the amount of the Cheque against which the complaint is being filed. The requisite court fees for various Cheque amounts have been listed below: