Cheque Bounce - Meaning, Legal Procedure & Punishment


A Cheque is a legal commitment made by a drawer ("issuer") to drawee ("receiver") to make the payment of a fixed amount on a particular date. Drawee has the absolute legal right to present the cheque in the bank on the date of cheque or within 3 months from the date of cheque.


 Meaning of Cheque Dishonored or Bounce: A cheque is considered as bounced or dishonored due to any of the below mentioned reasons.

 1. Insufficient funds

 2. Payment Stopped by Drawer or Issuer

 3. Incorrect Date

 4. Signature Mismatch

 5. Mismatch of amount and figures

 6. Overwriting of the cheque

 7. Damaged Cheque

 8. Closure of Bank Account of Drawer


There may be some other reasons as well but aforesaid are the most common reasons of cheque bounce.

 

 Legal Procedure In Cheque Bounce Case:

 1. Send a legal notice to drawer or issuer of cheque within 30 days from the date of receiving the bank memo of cheque bounce. In the said legal notice, you shall state the reason of cheque bounce and shall demand for the payment of cheque amount within 15 days from the date of receipt of legal notice.

 2. File a complaint within next 30 days if drawer fails to make the payment within fifteen (15) days. from the date of receipt of legal notice.

 3. Complaint shall be filed in the court of Metropolitan Magistrate or Judicial Magistrate of First Class.

 4. As per section 142(2)(a) of Negotiable Instruments Act, the court within whose jurisdiction the branch of the bank where the payee maintains the account is situated, will have the jurisdiction to try the offence, if the cheque is delivered for collection through an account.

 

Punishment & Penalty For Cheque Bounce:

The Negotiable Instruments Act, 1881 is applicable for the cases of cheque bounce and it is an act to define and amend the law relating promissory notes, bills of exchanges and cheques.

 As per section 138 of Negotiable Instruments Act, 1881, cheque bounce is a criminal offence and is punishable for a term which may be extended to two (2) years or fine which may extend to twice of the cheque amount or with both.


Article Written By: Mr. Raman Sharma (CS, LLB, DIM, B.Com)

Contact: barristerramansharma@gmail.com 

 


Comments

Post a Comment

Popular posts from this blog

How To Stop Or Remove Mobile Tower Installation In Residential Areas?

Image
Due to increase in the mobile phones users in India, there is also a need to increase the number of mobile phone towers to provide seamless mobile connectivity to everyone. And, this is the major reason that mobile phone service provider companies are installing mobile towers everywhere, even nearby hospitals, residential areas, schools and other crowded areas, which may not be good for the health of the public at large. Legal Steps To Be Taken To Stop Or Remove Mobile Phone Tower Installation In Residential Areas 1. Speak directly with the owner of premises who has entered into an agreement with companies to get mobile phone tower installed on the roof of his or her premises. You need to know his views about the harmful effects of mobile phone towers on human's body and mind and need to convince him peacefully to stop or remove the said installation. 2. Check with local resident welfare association (RWA) if the owner of the premises has taken the approval before installing the mob
Read more

Benefits And Drawbacks of Installing Mobile Towers On Roof

Image
Benefits of Installing Mobile Phone Tower On Roof   a. Monthly Rental Income:  Owner of the premise gets the monthly fixed rental income from mobile tower companies; with an incremental in the rental income after a specified tenure.  b. Improvement in Weak Signals:  Nowadays, the frequency of signal is very poor and due to which users are not able to attend the calls when they are sitting in their homes. But, if you have installed the mobile tower on your roof, you can seamlessly enjoy the best reception of the signals. c. Make Cash by Selling the Lease:  An owner of the lease has option to sell the monthly rental income to any buyer or third party in lieu of a lumpsum amount. The said lumpsum amount can meet your present needs and even you can invest the same through other methods as you desire. d. Increase in the Market Value of Property:  If you have installed a mobile tower in your property, then there are major chances to get the higher market value of the property whenever you pl
Read more

Supreme Court Judgment On Goods Of Inferior Quality

Image
ZNK Traders Private Limited (Appellant) versus Shri Kishore Shankar Singh Purkar And Anr On 13.12.2021   In Civil Appeal No. 4804 of 2019 between ZNK Traders Private Limited (Appellant) versus Shri Kishore Shankar Singh Purkar And Anr, Hon'ble Supreme Court held that the dispute with respect to the inferior quality was taken by the corporate debtor much belatedly after the transaction between the parties and the same was taken for the first time in the reply to the notice section 138 of Negotiable Instruments Act.    Supreme Court further said that no such dispute was taken by the corporate debtor till the cheque were issued which came to be dishonoured and till the proceedings under section 138 of the Negotiable Instruments Act were initiated. The aforesaid aspect was not properly appreciated by the NCLAT and the order passed by the NCLAT is unsustainable.    Hence, the present appeal was allowed and the impugned judgment and order passed by NCLAT dated 29.01.2019 in Compan
Read more

Supreme Court Judgment On Freedom Of Artist

Image
  In  Nachiketa Walhekar versus Central Board of Film Certification & Anr. passed on 16th November 2017 in W.P. (C) No. 1119 of 2017 ,  Hon'ble Supreme Court said that "Be it noted, a film or a drama or a novel or a book is a creation of art. An artist has his own freedom to express himself in a manner which is not prohibited in law and such prohibitions are not read by implication to crucify the rights of expressive mind.  The human history records that there are many authors who express their thoughts according to the choice of their words, phrases, expressions and also create characters who may look absolutely different than an ordinary man would conceive of.  A thought provoking film should never mean that it has to didactic or in a way puritanical. It can be expressive and provoking the conscious or the sub-conscious thoughts of the viewer. If there has to be any limitation, that has to be as per the prescription in law. Article Written By:  Mr. Raman Sharma (CS, LLB,
Read more

How To Know the Number of Mobile Towers Active In Your Area

Image
Department of Telecommunications (DOT) has already introduced the facility for people to know about the level of radiation and numbers of towers active around their houses. To get this information, you will need to visit the web portal of Tarang Sanchar at tarangsanchar.gov.in and will have to share the basic details i.e. name, email, number and location.  After submitting these details, you will get the information about the number of towers installed in your locality or area around your house. But, if you want to know about the radiation around your house, then you will have to first pay the fee of Rs. 4,000 online on the portal of tarangsanchar.gov.in and thereafter, a team of engineers will visit your home or location to check the level of radiation.  If you are getting more radiation than the prescribed limit, then you have the right to complain about the same to Department of Telecommunications (DOT).  It is always advisable to now keep the mobile phones near to your head at
Read more

Supreme Court Issues Directions To Police & Media On Sex Workers

Image
Human rights jurisprudence in India has acquired a constitutional status and sweep, owing to the full potential breathed by this Court into Articles 14, 19 and 21 of the Constitution of India since  Maneka Gandhi v. Union of India. The constitutional regard for human decency and dignity has been explicitly incorporated into Article 21 by this Court. While expounding on the scope of the right to life under Article 21, this Court in Francis Coralie Mullin v. Administrator, Union Territory of Delhi extended the meaning of the right to life beyond the protection of limb or faculty to include the right to live with human dignity and all that goes along with it, namely, the bare necessities of life such as adequate nutrition, clothing and shelter and also the right to carry on such functions and activities as constitute the bare minimum expression of the human-self.   Needless to say, this basic protection of human decency and dignity extends to sex workers and their children, who, bearing t
Read more

Court Can't Interfere In Rejection of Grant of Fresh Application / Refusal / Renewal of License For Firearms Except Extraordinary Circumstances

Image
Submissions Made By Counsel For Petitioner & Respondent In High Court For Judicature of Rajasthan At Jodhpur Learned counsel for the respondents submits that there is no absolute right of any person to acquire an arms license and the respondents have every right to objectively decide each case, while taking into consideration the past record of the person seeking such license as well as the pendency of proceedings, if any.  Learned counsel for the petitioner at this stage, submits that it would be sufficient if the respondents are directed to pass fresh orders on the petitioners’ cases individually, while keeping in the view the judgment rendered by a Division Bench of this Hon’ble Court in Khem Singh Vs. State of Rajasthan & Ors. reported in 2005 (2) Cr. L.R. (Raj.) 907. This Court’s attention is drawn to Para 5 of Khem Singh (supra). “Mere fact that some reports have been lodged against the license holder is not sufficient for cancelling the license. A license can be re
Read more

What Is The Time Limit To Use Stamp Papers In India?

Image
Validity of stamp paper has always been a matter of confusion in the mind of a person who purchases the same and is not able to use the same within next six months. According to section 54 of the Indian Stamp Act 1899 , if a person does not have the use of the stamp paper, then he can deposit the same with the collector, within six months from the date of purchase and can get the refund of money after a deduction of 10 paise per rupee. Provided that the stamp paper has not been spoiled or rendered unfit or useless for the purpose intended. It is noteworthy to mention here that the aforesaid section 54 of Indian Stamp Act only talks about the refund in a case when you do not want to use the stamp paper. It is not written anywhere about the validity of stamp papers in Indian Stamp Act 1899, but people start making their own interpretation that stamp paper is valid for 6 months or whatever period, whereas it is just a myth and nothing else. In reality, you can use the stamp paper at
Read more

Supreme Court Allowed Man To Become IAS Officer After 8 Years

Image
For doing complete justice in a unique case, Supreme Court on June 14, 2022 used its powers, under Article 142 of the Constitution of India, to allow a man to become an IAS officer after eight years, who cleared the civil services examinations in 2014, but was found unfit because of a high body mass index (BMI).  Article 142 of the Constitution of India speaks about  "Enforcement of decrees and orders of Supreme Court and order as to discovery, etc." . In this Article, The Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or order so made shall be enforceable throughout the territory of India in such manner as may be prescribed by or under any law made by Parliament. The name of person is Mr. K Rajashekhar Reddy who succeeded in CSE-2014 and his medical examination revealed a BMI of 32 whereas the mandatory requirement of B
Read more

Former Judges Write To CJI on Demolitions In Uttar Pradesh

Image
Twelve former judges and senior lawyers have urged the Court through letter to intervene to arrest the "deteriorating law and order situation" in Uttar Pradesh.  They also Urged the apex court to take suo motu cognizance of the demolition of houses of protesters by the Uttar Pradesh State authorities and detention of many such protesters. The signatories to the letter wrote to the Apex Court are: 1. Justice B. Sudarshan Reddy (Former judge of Supreme Court); 2. Justice A.K. Ganguly, (Former judge of Supreme Court); 3. Justice V. Gopala Gowda (Former judge of Supreme Court); 4. Justice K Chandru (Former Judge of Madras High Court); 5. Justice AP Shah (Former Chief Justice of Delhi High Court and former Chairperson of Law Commission of India); 6. Justice Mohammed Anwar (Former Judge of Karnataka High Court); 7. Shanti Bhushan (Senior Advocate, Supreme Court); 8. Indira Jaising (Senior Advocate, Supreme Court); 9. Sriram Panchu (Senior Advocate, Madras High Court); 10. Chander U
Read more