An Overview:

Cheque bounce cases are governed by Section 138 of the Negotiable instruments Act, 1881. A cheque bounces when a bank doesn’t honour a payment. When a cheque is returned by the bank unpaid, it is said to be dishonoured or bounced. A few of the reasons are wrong signatures, mismatch of figures written on the cheque (in words and figures), and overwriting. These issues are minor and can be solved without the court’s intervention. A major cause for concern is when a cheque bounces due to lack of funds in the drawer’s account.

If you have received a cheque that has bounced, you have two options. You can send the person a demand notice and then, if there is no response after 15 days, you can eventually follow up by filing a complaint in the court.

To add to this, in case an action is not taken against the defaulter by the receiver within the prescribed time, it can also lead to lack of remedy for the receiver of the cheque as a case for cheque bounce is time-bound. Thus, it is important to address a cheque bounce case as soon as possible in order to avoid all the consequences involved.

Procedure for a Cheque Bounce Case

• Step 1: The first step is to send a Demand Notice to the person who has issued you a bounced cheque
• Step 2: The notice should include details regarding the bounced check. The notice should include information such as the date the check was issued and a copy of the dishonored memo
• Step 3: The person has 15 days from the time they receive the notice to pay you
• Step 4: If they don't, you can file a complaint in the prescribed format in the court
• Step 5: You must also present an oath letter, a copy of the notice issued with the acknowledgement receipt, a photocopy of the memo, and the bounced check received, in addition to the complaint form
• Step 6: When the judicial court gets your complaint, it will review and verify the documents you sent
• Step 7: Once the court is satisfied with your case, the complainant or their lawyers must fill out the bhatta or process form, after which the accused is summoned to appear in court
• Step 8: If the accused fails to appear in court, the judge has the authority to issue a bailable warrant against the person in question.

Note: It is advisable to hire lawyers to assist you with filing a case. This is because lawyers are familiar with the entire process and how to fill out the form in the appropriate legal format.

Legal Action for Cheque Bounce

Cheque bounce is a criminal offence in India, covered under Section 138 of the Negotiable Instruments Act. So, if a complaint is filed in a court and, if found guilty, the defaulter can be punished with a prison term of two years and/or a fine, which can be as high as twice the cheque amount.

In some cases, the court might grant both punishments, this is usually if the court finds the infraction heinous. Sometimes, the court may grant additional time for the payment of dues.

Documents Required for Cheque Bounce

While filing a complaint against a party in a cheque bounce case, you need to submit an application form along with the following documents:

• The original cheque
• Memo of returning cheque which would contain the reason about non-payment by the bank
• Copy of demand notice and the original receipts.
• An affidavit stating evidence.

Cheque Bounce Rules in India

In case a person is filing cheque bounce case, there are certain rules they have to follow.

• The first step is to send a demand notice to the offender
• Once the notice is received, the offender has 15 days to make the due payment
• Under Section 138 of the Negotiable Instruments Act, 1881, the payee has to send the drawer a notice within 30 days of receiving the cheque return memo
• If the drawer fails to make the payment, then the person filling the cheque bounce case has every right to file a complaint with the court by submitting a written complaint along with valid documents
• The bank's cheque return memo is one of the most important documents. The court will be unable to proceed with the case without this document
• The defaulter cannot be penalized in the eyes of the law if the bounced cheque was given as a gift or used to lend money for a loan payment.