What do you mean by Cheque bounce/ Dishonour of cheque?

When you deposit the cheque with the bank and the bank returns the cheque due to any of the below reasons the cheque is said to be bounced or dishonoured.

Frequently Asked Questions:

What can be the reasons for dishonor of cheque?

Following are the reasons which attract criminal punishment:

  • Insufficient funds in the account of the person issuing the cheque;
  • The account of the person issuing the cheque has been closed;
  • The person issuing the cheque has given stop payment instructions to the bank.

Also there are other reasons which may or may not attract criminal punishment:

  • Mismatch of signature
  • Spelling errors
  • Mistake in date
  • Over writing
  • Difference in the amount written in figures and words

What is the legal remedy against cheque bounce?

You need to send a notice to the person issuing the cheque within a period of 30days from the date mentioned on the cheque return memo which you must have received from the bank.

What should the notice contain?

The notice should contain the statement calling upon the issuer to pay the amount due within 15 days or legal action shall be initiated against him. The notice should also mention the transaction between you and the drawer of the cheque and the reason for the dishonor of a cheque as mentioned on the returned memo issued by your bank.

What if the person does not pay?

If after 15 days of the receipt of your notice the person does not pay you can file a criminal complaint under section 138 of the Negotiable Instruments Act against the person issuing the cheque within 30 days after completion of the period of 15 days as mentioned above.

Before whom the criminal complaint has to be filed?

The criminal complaint has to be filed before the Magistrate court situated in your area.

What is the punishment for cheque bounce?

Once you have filed a criminal complaint before the Magistrate court, the court shall punish the person by way of imprisonment of upto 2 years and a further a monetary refund or both.

How can Law Tarazoo help?

Our legal experts will help you through the entire process including drafting the notice so as to include fine legal points in the notice. Furthermore, we shall assist you in hiring a legal expert in your locality to protect your rights and recover the money which you are rightly owed.

(All Inclusive)