Understand The Legal Aspects Of Cheque Bounce

By Author: Adv. Sapna Malik
Total Articles: 9
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A cheque bounce can happen for many reasons including insufficient funds, cheque validity expiration, damaged cheques, overwriting, etc. The Negotiable Instruments Act of 1881's Section 138 addresses incidents involving bounced cheques and specifies penalties for those found responsible. Let's understand the legal implications of cheque bounce in India.

Legal Implications of Cheque Bounce

Cheque bounce is a criminal offence in India under the stated Section 138 of the Negotiable Instruments Act. As a result, if a complaint is filed in court, the defaulter may be depending on the situation, get a prison sentence or a penalty that is up to twice the value of the cheque.

When the court determines that the violation was serious, it may impose also. In such cases, you need to consult the experienced Corporate Dispute Lawyer in Gurgaon to guide you through the process.

Required Documents in case of Cheque Bounce

To file a complaint against a party in a matter involving a returned financial instrument, you must submit an application form and the accompanying supporting documentation:

● Copy ...
... of the letter sent to the drawer.
● Evidence of notice delivery, such as a courier receipt or registered mail receipt.
● The original cheque is on file.
● Cheque return memo was issued by the drawer's banker
● Evidence of a legally enforceable debt or obligation.

Cheque Bounce Rules

There are specific Cheque Bounce rules that must be followed while submitting a Cheque Bounce complaint. These are as follows—

● Sending the offender a demand notice is the initial step.
● The offender has 15 days after receiving the notification to make the required payment.
● The payee must write a notice to the cheque drawer under Section 138 of the Negotiable Instruments Act of 1881 within 30 days of receiving the cheque return memo.
● The person filling out the cheque bounce case has every right to register a complaint with the court by presenting a written complaint together with appropriate papers if the drawer refuses to make the payment.
● Without a cheque return memo document, the court cannot continue the case.
● If the bounced check was presented as a gift or used to lend money for a loan payment, the defaulter could not be punished in accordance with the law regarding cheque bounces.

How a Corporate Dispute Lawyer in Gurgaon can Help

A corporate dispute lawyer can guide and issue a statutory notice to the party at fault. Mrs. Sapna Malik is an experienced corporate dispute lawyer in Gurgaon who has settled several corporate disputes with mediation.

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