The cheque is a document which orders the respective bank to pay the mentioned amount to a person or an organization whom it has been issued. It holds the monetary value of the amount written over it. The necessary details a cheque contain are; the name of the payee, date, amount and the signature of the account holder, but any mistake while filling a cheque can prevent the bank to take it into consideration thus announcing it “Bounced”. Likewise, a “bounced cheque” is basically the cheque which is denied by the bank to pay. Any defect in the cheque or insufficient balance in the account can lead the bank to refuse the payment to the payee.
FYI, in the current Indian Law, a bounced cheque is a criminal offense.
Cheque bounce is a criminal offense which can cause either the imprisonment of 2 years, cash-penalty, or both. Consulting your cheque bounce case with Delhi lawyers is advisable before performing any legal proceedings. The major two cases of cheque-dishonor are as follow:
- The insufficient amount in your account
- The account from which cheque has been the issues is closed or blacklisted.
The amended Negotiable Instrument Bill passed in 2018 states that the dishonor of cheque belongs to Section 138 cheque bounce act and considered as a criminal offense. The section 138 states that the drawer of the dishonored cheque is bound to pay the double amount as the compensation or serve the two years of imprisonment. Both physical and monetary punishments can be given in severe cases.
It will be considered as a dishonor of the cheque and a criminal offense if the payee takes the proper actions as per the guidelines given below, but the drawer fails to pay the amount:
If the cheque you received is bounced, write the letters to the person who has given you the cheque. The letter can include a threat to begin the legal proceedings, if the amount is not paid within the specified time, under the Negotiable Instrument Act (NI Act) cheque bounce charges.
The threatening letter often leads to a settlement, in the case where the drawer is an individual, the case will be filed under Section 138 cheque bounce of the Negotiable Instrument Act and if the drawer is a company or managing director the proceedings will take place under Section 141. The notice of demand/settlement should be sent under 30 days from the date when the issued cheque was announced as bounced. The main aim of the letter is to warn the drawer to pay the due amount, else prepare for the legal actions. Cheque Bounce Lawyers helps you format the legal notice in a proper manner.
The Delhi lawyer’s team helps you send the properly crafted notice which can make the solid impact on the recipient. Also, the lawyer’s team suggests you the best ways for bounced check recovery in the least possible time.
A cheque-bounce case includes three parties namely Drawer, Payee and the Bank. The person who is paying the amount is known as a drawer, and the person whom the cheque is presented is “payee’ and the associated bank who is directed to pay the cheque in cash is called “Drawee” or “Drawee bank”. The bounced-cheque can be stated as both civil and criminal offense
As being a civil liability, the guilty is bound to pay twice of the amount mentioned on the cheque. If the court considers dishonor of the cheque as a criminal offense, the two-year imprisonment, fine as twice the amount, or both can be charged as cheque bounce legal action. Furthermore, as per RBI guidelines, the bank can stop issuing the cheque-book in the case of dishonor of cheque.
Effect on CIBIL score:
A bounced cheque can hamper the credit history of the drawer. Because of being a criminal offense, the cheque-bounce can cause a severe effect to your CIBIL score. The low CIBIL can lead to loan-denial in future.
The best way to keep CIBIL healthy is to make sure that you always have an adequate balance in the account before offering the cheque.
It is advisable to consult your case with cheque bounce lawyers in Delhi and get the recover our dues in the easiest manner. The lawyers help you to settle the case if possible or guide you through the required legal proceedings.