Cheque Bounce Rules: In banking language, cheque bounce is called Dishonored Cheque. cheque bounce may seem like a very minor thing to you, but according to Section 138 of the Negotiable Instrument Act 1881, bounce of a cheque is considered a punishable offence.
Cheque Bounce Rules: After UPI and Net Banking, the use of cheque has been limited, but its usefulness has still not ended. Even today, many people do big financial transactions through cheques. At the same time, in many works, canceled cheque is demanded many times. Without this your work cannot be done. However, while making payment through cheque, it should be filled very carefully because your small mistake can cause the cheque to bounce. A bounced cheque means that the person who was supposed to get the money from that cheque could not get it.
In banking language, cheque bounce is called Dishonored Cheque. cheque bounce may seem like a very minor thing to you, but according to Section 138 of the Negotiable Instrument Act 1881, bounce of a cheque is considered a punishable offence. For this there is a provision of two years imprisonment or fine or both. However, it is not that the cheque bounced and you were prosecuted. In such a situation, banks first give you a chance to correct this mistake. Let us tell you what are the reasons why a cheque bounces, how much fine is charged in such a case and when a case arises.
These are the reasons for cheque bounce
- No or low balance in account
- signature mismatch
- spelling mistake
- mistake in account number
- over writing
- Cheque expiration
- Closure of cheque issuer’s account
- Suspicion of forged cheque
- No company stamp on cheque etc.
You get a chance to correct the mistake of cheque bounce
It does not happen that your cheque bounces and you are sued. If your cheque has bounced, the bank first informs you about it. After this, you have 3 months time in which you can give the second cheque to the creditor. If your second cheque also bounces then the creditor can take legal action against you.
Banks charge fine on cheque bounce
- Banks charge a penalty if a cheque bounces. The fine has to be paid by the person who has issued the cheque.
- This fine may vary depending on the reasons. For this, every bank has fixed a different amount. Generally, fine ranges from Rs 150 to Rs 750 or 800.
When does the case come?
Otherwise, as soon as the cheque is dishonored, a case is filed against the payer. When a cheque bounces, the bank first gives a receipt to the creditor, in which the reason for the cheque bounce is explained. After this the creditor can send a notice to the debtor within 30 days. If no response is received from the debtor within 15 days of the notice, the creditor can go to court. The creditor can file a complaint in the magistrate’s court within a month. Even after this, if he does not get the amount from the debtor, he can file a case against him. If found guilty, imprisonment up to 2 years or fine or both can be imposed.
