Cheque Bounce Case
Cheque Bounce in India
Cheque bounce cases can be registered with Estabizz. Use our services, and we'll file your case for a bounced cheque without any fuss.
Cheques are the most widely used, trustworthy, and secure method of conducting financial transactions in the modern period, from paying bills or salaries to repaying loans. In India, the vast bulk of cheques are processed by banks on a daily basis. However, one of the most frequent causes of a legal conflict in India is the problem of a dishonoured cheque or a bounced cheque.
Timeline
- Legal Notice within 30 days of a cheque that has been returned unpaid, plus 15 days from the date of notice receipt for payment.
- If the payor doesn't make the payment by the deadline, a criminal complaint under section 138 must be filed within 30 days of the notice's 15-day grace period expiring.
What Is a cheque bounce or cheque dishonour?
Cheques are bills of exchange that are written on bank accounts and are only payable upon demand. When a cheque is presented to the bank, the bank rejects it, and the cheque bounces. It might happen if there aren't enough cash available, the signatures don't match, etc. The account holder receives the cheque back from the bank along with a return memo outlining the grounds for the return. The following are the causes of dishonoured cheques.
- Money is insufficient
- Signature mismatch Expired Cheque
- The date on the cheque is illegible.
- The amount written in words against the amount written in numbers
- Tattered cheque
- Account number is incorrect.
- Adding extra lines to the cheque
- There is a bank fraud suspicion.
One may proceed further and file a case under Section 138 of the Negotiable Instruments Act if the cheque bounces due to insufficient funds.
- You have an option for legal action if a cheque is dishonoured.
- You can serve notice to a person
- A complaint may be filed in court if there is no response to the legal notice after 15 days have passed.
Indian Laws on cheque bounce
According to section 138 of the Negotiable Instruments Act, 1881, there is a penalty if a cheque bounces in India due to insufficient money or if the amount stated is more than the amount that was previously agreed to be paid. Dishonouring a cheque is a crime in India, and those found guilty face a punishment of a potential two-year prison sentence, a fine that can reach twice the amount on the cheque, or both.
In accordance with Section 138, the defaulter must get legal notice and the return memo within 30 days of the cheque's bounce. It further specifies that no such instance falls under section 138 if the payment is made to the person in whose name the cheque is issued within 15 days of receiving the notice that the cheque bounced. However, the payee is free to pursue the case if there isn't a response after 15 days of warning.
New provisions for Cheque Bounce
The Negotiable Instrument Act's Section 143A gives the court the authority to award interim damages to the complainant in a summary trial if the drawer enters a not-guilty plea or in any other circumstance. The compensation cannot be more than 20% of the amount on the cheque. Additionally, the payee may be ordered to return the money with interest if the drawer is found not guilty. The interim compensation must be paid within 60 days of the court order, though that time frame may be increased to 30 days.
Additionally, the Appellate Court has the authority to impose payment under Section 148, which must be at least 20% of the compensation the Trial Court granted and which was pending under Section 138. This sum shall be supplied in addition to the sum provided under section 143A. The entire deposit must be returned in the event that the appellant is found not guilty. Within 60 days following the court's order, the deposit must be paid.
What prerequisites must be met before filing a complaint?
The following criteria must be met in order to file a lawsuit when a cheque bounces-
- The cheque must be given to the bank within three months of issuance or during the validity period (formerly, the validity period was six months but is now lowered to three months) of the cheque. bc.No.47/14.01.001/2011-12, which is an RBI notice: RBI/2011-12/251DBOD.Aml
- The payee draws the cheque from his bank account.
- The cheque must be returned unpaid.
- After the cheque bounced, the payee or the drawee must seek payment via registered notice.
- After receiving notice, the payee failed to make a payment within 30 days.
What remedies are offered under Section 138?
If the individual does not make the payment within 30 days of receiving notice from the payee, a prosecution may be opened in accordance with Section 138.
Who can be the subject of a section 138 prosecution?
The payor may be sued, and if a firm has broken the law in violation of section 138, those who were in authority and accountable for the company's actions may also be prosecuted alongside the company.
Who has the power to file a cheque bounce case?
The person who received the cheque usually has the right to file a case for a bounced cheque. However, under certain conditions, the power of advocate may be used to start the case. The complainant must appear before the magistrate, who will then question him further under oath.
Where do I file a dishonour of cheque case?
The court where the drawee bank is located, or alternatively, where the cheque was presented, is where the complaint can be lodged in accordance with the Negotiable Instrument Act. The court where the case is filed in this instance shouldn't be less than the Metropolitan Magistrate or the Judicial Magistrate of First Class.
How to File a case regarding cheque dishonour?
- 30 days after receiving the cheque return memo, send a demand notice to the payor.
- The payor must make payment within 15 days of receiving notice.
- The drawee or the payee may file a complaint if the payor or the drawer fails to make a payment. Legal complaint must be submitted on your behalf by advocate with supporting documentation.
- Following document verification, the court will issue a process form after receiving a complaint, and the accused will then be summoned.
- Under section 138, the accused will be the subject of a civil lawsuit or summary proceeding, and the court will decide how to proceed.
Documents needed to file a case for a cheque bounce
- The original cheque bounced
- Copies of the notices requiring payment and acknowledgments
- Bank return memo
- Receipt copies and postal receipts
- Complaint
- Oath letter
- Affidavit
-Any fee, stamp duty, and other costs are additional and must be paid.
Contact us if you have any questions about cheque dishonouring or anything else. And to take advantage of any of the aforementioned services, kindly get in touch by asking a question on our website.
Estabizz has a network of knowledgeable advocates who can help you file the criminal complaint and represent you in court. You can get in touch with us to file a criminal complaint if the payor still doesn't make the payment after the notice period has passed.
-Any fee, stamp duty, and other costs are additional and must be paid.
Contact us if you have any questions about cheque dishonouring or anything else. And to take advantage of any of the aforementioned services, kindly get in touch by asking a question on our website.
Estabizz has a network of knowledgeable advocates who can help you file the criminal complaint and represent you in court. You can get in touch with us to file a criminal complaint if the payor still doesn't make the payment after the notice period has passed.
Court Fees for Case Filing
Court costs up to-
- Rs. 50,000 then Rs. 200 as court fees
- Rs. 50,000 to Rs. 2,000,000 then Rs. 500 as court fees
- Over Rs. 2,000,00,000/- Rs. Then Rs. 1000 as court fees
What is the deadline for filing a complaint under Section 138 of the Negotiable Act of 1881?
According to section 138, the written complaint must be submitted within a month of the offense. If there is a delay, the complainant must persuade the court that it resulted from a valid reason; only then will the case be registered.
The Indian Laws regarding cheque bounce
The payor is not considered to have violated the law if the payment is completed within 15 days of the day on which the notice was received. The payee may proceed to register a complaint within a month of the notice period's expiration if it hadn't been done then. If the payor is proven guilty, he will be sentenced to two years in prison, a fine equal to twice the amount on the bounced cheque, or both. If a repeat offender, the bank may also prohibit the payor's access to cheque books and cancel the bank account.
Why opt for Estabizz’s services?
- Free advice or inquiries
- An experienced lawyer who is familiar with the complete process of dishonouring a cheque will connect us with you.
- Knowledgeable direction during the procedure
- Assistance with the complaint's drafting
- Support for the Trial Process
- Fixed payments up front to prevent disputes
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PSARA LICENSE – Estabizz Fintech
GST DUES ( VOID PROPERTY TRANSFER ) -Estabizz Fintech
GST ( INSTALLMENT & RECOVERY ) – Estabizz Fintech
SEBI ( Surveillance of Transaction Alerts) – Estabizz Fintech
RESERVE BANK OF INDIA (Rules for payment companies outsourcing core activities) -Estabizz Fintech
RESERVE BANK OF INDIA( Guidelines for Appointment of Statutory Auditors of Banks, NBFCs) -Estabizz Fintech
RESERVE BANK OF INDIA ( Deadline for Current Account Notification) – Estabizz Fintech
RESERVE BANK OF INDIA ( Treatment of Inactive Trading account) -Estabizz Fintech
SEBI revises financial info filing formats for entities having listed non-convertible securities
SEBI notifies certification requirements for distributors, staff of portfolio management services
SEBI extends relaxations for compliance with rights issues.
SEBI extends relaxations for compliance with rights issues
SEBI extends deadline for investment advisers to conduct annual compliance audit
SEBI board okays steps to make M&As easier
SEBI proposes to revise settlement rules
SEBI approves framework for creating Social Stock Exchange
Scope of ED’s power to freeze bank accounts under Prevention of Money Laundering Act, 2002
One Nation One Subscription: Facilitating Free Access to International Academic Journals
Timelin
What Is a cheque bounce or cheque dishonour?
One may proceed further and file a case under Section 138 of the Negotiable Instruments Act if the cheque bounces due to insufficient funds.
Indian Laws on cheque bounce
New provisions for Cheque Bounce
What prerequisites must be met before filing a complaint?
What remedies are offered under Section 138?
Who can be the subject of a section 138 prosecution?
Who has the power to file a cheque bounce case?
Where do I file a dishonour of cheque case?
How to File a case regarding cheque dishonour?
Documents needed to file a case for a cheque bounce
Court Fees for Case Filing
What is the deadline for filing a complaint under Section 138 of the Negotiable Act of 1881?
The Indian Laws regarding cheque bounce
Why opt for Estabizz’s services?
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