Cheque Bounce


Dishonor of cheque

The Negotiable Instruments Act, 1881

What is Cheque?

Cheque is a document which contain monetary value, it allows a bank to pay the asked amount of money to someone from the account of the account holder in that bank. In this process a person writes a cheque which contains some details which are the amount of money, date, the name of payee and the signature and that order their bank as a drawee to pay that amount of money stated. Cheque is a type of bills of exchange and it is developed to make the life easy for all of us because it helps us to avoid to carry the huge amount in cash and that also minimizes the fear of getting robbed, during any journey with cash.

How A Cheque Bounce Case Lawyer Helps

Cheque bounce is a criminal offence and according to Indian law the punishment of imprisonment up to 2 years or with monetary penalty or with both punishment is applicable for this offence. You can consult a cheque bounce case lawyer to discuss your concern regarding dishonor of cheque. Dishonour of cheque happens in following cases:

  • There are insufficient funds in the account that the cheque is drawn on

  • A cheque is issued on an account, which had been closed for reasons other than being blacklisted under the Credit Bureau or closed for legal reasons

A cheque is a negotiable instrument. However, a crossed and account payee cheque is not a negotiable instrument. It is so because they cannot be negotiated by any person other than the one in whose name it is drawn. The person who draws the cheque is the ‘drawer’. The one in whose favour the drawer draws the cheque is the ‘payee’. The bank who is directed to pay the amount is the ‘drawee’. As a civil liability, it provides for fine twice the amount of the dishonoured cheque. As a criminal liability, it provides for imprisonment of two years or fine which may be to the tune of twice the amount of the dishonoured cheque, or both. The offence of dishonour of cheque is said to have been occured when:

  • Cheque is issued for discharge of any debt or liability

  • Cheque is presented within its validity period

  • The Payee issues a notice to drawer within 30 days of return of cheque

  • After such notice, the drawer fails to pay the cheque within 15 days of receipt of such notice