9870310368 Request a Call

Learning

Home » Legal » Dos and Don’ts in Cheque Bounce Case- 10 Key Points

Top Lawyers in India
Pallavi Lakshmi Lakra

Pallavi Lakshmi Lakra | Updated: Jun 18, 2019 | Category: Cheque Bounce, Legal

Dos and Don’ts in Cheque Bounce Case- 10 Key Points

Even though online banking is prospering, some people still opt for the traditional way of transferring money through cheques. Due to this, one needs to know the details of dishonour of cheque and the dos and don’ts to be followed in a cheque bounce case.

Here in this article, we’ll be discussing about cheques, the dos and don’ts when there is dishonour of cheque and much more.

Cheque and dishonour of cheque

A Cheque is a negotiable instrument which directs banks to pay a sum of money from the person in whose name the cheque is issued.

Cheque bounce occurs when there is an unsuccessful processing of the cheque due to various reasons. When this happens, the cheque is returned, and this is known as cheque bounce.

cheque bounce is very common these days.  we should keep in mind the essential factors for dishonor of cheque.

Essential factors for dishonor of cheque

  • Cheque should be legally enforceable in India against a debt or any other liability.
  • It should be presented within the validity period of three months.
  • When there is dishonor of cheque, the payee has to issue a demand notice within 30 days of dishonor.
  • Moreover, for registering the case of cheque bounce, the drawer should fail in making payments to the payee within 15 days from the date of receiving the notice.
We have to follow certain dos and don'ts while dealing with dishonor of cheque. For example furnish the cheque within 3 months. give demand notice within 30 days from dishonor of cheque.

10 Dos and don’ts in cheque bounce  

  1. The cheque should be furnished within the validity period. It should be noted that the previous validity period was 6 months, which is not reduced to 3 months.
  2. One should give a demand notice to the drawer when the cheque bounces. The demand notice should be sent within 30 days from the dishonour of cheque.
  3. A 15 days period is given to the drawer for making payments.
  4. In addition to this, the demand notice should be sent by the complainant. But it is always advisable to hire a lawyer for issuing cheque bounce notice.
  5. One should avoid altering the amount of cheque
  6. Additionally, we should change the name of the payee.
  7. Moreover, we have to avoid altering the date of the cheque.
  8. Lastly, we should avoid to make any sort of change to the cheque.
  9. We should make the complaint as soon as the period of 30 days expires. As the delay in filing the complaint will only be granted in exceptional circumstances.
  10. The validity of cheque gets expired after three months.

The Time limit for filing a suit

After receiving the bank return memo when a cheque bounces, you have to immediately issue demand notice within the span of 30 days from the receipt of information.

If the accused does not make the payments within 30 days from the receipt of the notice, we can file the complaint under section 138 of the Negotiable Instrument Act. A complaint has to be filed within 30 days.

If complainant delays in filing the complaint, an application for condonation of delay has to be filed stating the reason for delay or else you will lose your right to file a case under section 138.

Cheque Bounce

Punishment for the dishonour of cheque

The court will issue the summons, and the court proceeding will start after it receives the complaint. If the defaulter is convicted, then a monetary penalty of the amount which is double the amount of cheque is to be paid or imprisonment for a term of two or more years or both. The cheque book facility can also be stopped by the bank. Furthermore, in case there are repeated offence of cheque bounce then the bank can close the bank account.

If the drawer makes payment within 15 days of demand notice, then there is no need to file the case.

Conclusion

A Delhi Court has rightfully stated that there should be a huge penalty for ensuring the reliability of the non-disposable device, which has slowly but steadily become a part of our lives. One should have knowledge about what to do in cheque bounce case and how to handle the situation. If the key details are fulfilled, then we can avoid the dishonour of cheque. Therefore, it is advisable to fill the cheque with due diligence. Why land in court when we can completely avoid the legal proceedings by correctly fulfilling all the criteria for cheques.

For more information and assistance in drafting cheque bounce notice, contact our team of expert lawyers at LawyerINC

  • 7
  •  
  •  
  • 3
  •  
  •  
  •  
    10
    Shares
  • 7
  •  
  •  
  •  
  • 3
  •  

Pallavi Lakshmi Lakra

Pallavi Lakshmi Lakra

Pallavi is a Legal Associate at Lawyerinc. She is graduated from Gujarat National Law University having areas of expertise in Legal and financial content writing. She is having keen interest in legal research, drafting and legal advisory. She likes to keep herself updated with the changing face of legal arena.


Business Plan Consultant

Related Post

Marriage Registration

Request a Call Back

Why Choose Us

Lawyers

Find a Lawyer

Search for top-rated lawyers near you

Get A Quote Online

Get a Quote

Receive quotations for your legal need

Get A Quick Consultant

Get a Quick Consult

Get 15 Minutes of expert legal advice

LawyerInc Chatbot