Understanding The Cheque Bounce Case Process Under Section 138
A cheque bounce may cause much frustration both on the part of the issuer and the one who wants to receive it. Basically, many people do not know what happens once a cheque has been bounced or its aftermath in legal actions against it. We will explain the entire process here in simple words so it can be understandable to everyone.
What is a Cheque Bounce?
A cheque dropped in a bank is said to be
bounced when the bank refuses to clear the paid amount. That can be because of
several reasons:
●
Not enough balance
●
Wrong signature
●
Overwriting
●
Expired cheque
●
Account blocked
If a cheque bounces due to a lack of
funds, it turns into a legal cheque bounce case under Section 138
of the Negotiable Instruments Act.
Cheque Bounce Case Process
Explained
A clear timeline is involved in a cheque bounce
case process. Each step must be completed within the time limit set by
law.
1. Bank Issues a Return Memo
The bank issues a return memo. It states
the reason for the cheque bounce. This is the first document needed for any
legal action.
2. Send a Cheque Bounce Legal
Notice
The payee must send a cheque bounce legal
notice to the cheque issuer within 30 days from the date of receiving the
return memo.
The notice must include:
●
Cheque details
●
Amount owed
●
Reason for bounce
●
A demand to make a payment within
15 days
3. Wait for 15 Days for
Payment
The issuer gets 15 days to pay the cheque
amount within 15 days of receiving the notice.
If the issuer clears the payment, the
case does not proceed further. Otherwise, the payee can file a cheque bounce case
in court.
4. Filing the Case in Court
The payee must file a case within 30 days
after the cheque bounce waiting period.
The court will then:
●
Check the complaint
●
Issue summons
●
Ask the accused to appear
The hearing gives the accused a chance to
present their side.
5. Court Hearings and
Evidence
Both parties must submit their proof of cheque
bounce, including:
●
Return memo
●
Cheque copy
●
Legal notice copy
●
Proof of delivery of notice
The court will listen to both sides and
check all documents.
6. Court Judgment
If the court finds the accused guilty, he
may be ordered to:
●
Pay the cheque amount
●
Pay extra compensation
●
Pay a cheque bounce penalty
●
Face imprisonment (in rare cases)
The main goal is to ensure the payee gets
their money.
Cheque Bounce Case Time Limit
Here is the basic timeline:
●
Within 30 days: Issue a legal notice after the cheque has bounced
●
15 days: Time given to the issuer to pay
●
Within 30 days: File the case if payment is not made
This makes the process time-bound and
easier to follow.
Penalty for Cheque Bounce
A person found guilty may face:
●
Fine up to double the cheque
amount
●
Jail time up to 2 years
●
Payment of compensation is decided
by the court
In most cases, courts prefer settlements
so the payee gets back their money quickly.
Why Understanding the Process
Helps
The knowledge of the cheque bounce case process helps both sides to
take accurate steps.
The law is designed to protect honest
people and make sure payments are completed as promised.
Conclusion
A cheque bounce may sound confusing, but
the steps and timelines make it easier to handle. Such knowledge about the
stages of what the law expects on each end helps both parties move quickly to
avoid bigger problems. Be knowledgeable to be confident in case this happens
someday.
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