Breaking News

Procedure of Legal Recourse in Cheque Bounce Cases in India

A cheque is a negotiable instrument and is used in almost all the transactions such as re-payment of loan, payment of salary, fees, bills, etc. Cheque is considered as one of the reliable methods of the payment of money. The person who issues the cheque is known as the ‘drawer’, the person in whose favour, the cheque is drawn is called ‘payee’, and the bank who is directed to pay the amount to the payee is known as ‘drawee’.

Whenever a cheque is issued in favour of a person, i.e., the payee, then he has to present that cheque in his bank within three months of the issue of the cheque or within the period of its validity, whichever is earlier. In case the cheque is dishonored, the drawee bank immediately issues a ‘Cheque Return Memo’ mentioning the reason for non-payment. However, the payee can again present that cheque in the bank any number of times within the period of its validity. If the cheque is still not honored then the payee can prosecute the drawer for the dishonor of the cheque.

The Negotiable Instruments Act, 1881 is applicable law for the cases of dishonor of cheque. Before prosecuting the drawer for the dishonor of the cheque, a proper procedure has to be followed by the payee. The payee has to send a registered notice to the drawer within 30 days from the date of receiving “Cheque Return Memo” from the bank. The notice should mention that the cheque has been dishonored by the bank for the reason mentioned in the Cheque Return Memo and that the cheque amount has to be paid to the payee within 15 days from the date of receipt of the notice by the drawer. If the drawer fails to make a fresh payment within 15 days of receiving the notice, the payee has the right to file a criminal complaint under Section 138 of the Negotiable Instruments Act.

The complaint has to be filed in the court of Judicial Magistrate within 30 days of the expiry of the notice period. If the issuer of the cheque is found guilty then he can be sentenced to imprisonment for 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.

The cases of cheque bounce are common these days and there is a significant rise in the number of cheque bounces cases. It is for this reason that in many metropolitan cities there are separate courts for handling the cheque bounce cases. It is essential to consult a lawyer who is well versed and experienced in the cheque bounce matters. So there is a need of the cheque bounce lawyers as the scope of this field is very wide.

1 comment:

  1. Amaresh Singh Advocate, reputed Cheque Bounce Case Lawyer in Dwarka is Specialized in Cheque Bounce Cases, Has Succesfully Fought many cases for Cheque Bouncing as per indian Law. As per law, Cheque Bouncing is an Offence. In cheque Bouncing Cases, we get Bail, to the accused and try to solve the dispute as early as possible.