Cheque bounce matters typically involve situations where a cheque issued by a drawer (the person writing the cheque) to a payee is returned by the bank due to insufficient funds in the drawer’s account or other reasons such as a mismatch in signature, incorrect details, or a stop-payment instruction.
Legal Perspective:
- Negotiable Instruments Act, 1881: In India, cheque bounce cases fall under Section 138 of the Negotiable Instruments Act, 1881. This section makes it a criminal offense if the cheque is dishonored due to insufficient funds or other specified reasons.
- Legal Procedure:
- Notice to Drawer: Upon dishonor, the payee must issue a legal notice to the drawer within 30 days of receiving the cheque return memo from the bank. The drawer is given 15 days to make the payment.
- Filing a Complaint: If the drawer fails to pay within the stipulated time, the payee can file a complaint in the court within 30 days after the notice period.
- Punishment:
- Fine up to twice the cheque amount.
- Imprisonment up to two years.
- Both fine and imprisonment, depending on the severity of the case.
Essential Steps for Payee:
- Retain the dishonored cheque and bank memo.
- Issue a legal notice promptly through a lawyer.
- Keep records of all communication and actions taken.
Preventive Measures for Drawers:
- Ensure adequate funds in the bank account before issuing a cheque.
- Regularly reconcile chequebook records with the bank account.
- Avoid issuing post-dated cheques without confirming fund availability.
If you require professional legal assistance for cheque bounce matters, specialized lawyers can provide guidance, draft legal notices, and represent you in court. Let me know if you’d like detailed support or resources for any specific aspect!