BOUNCING/DISHONOR OF CHEQUES
Cheques are an important aspect of transaction in the modern and economic world. A bill of exchange which is drawn upon a specified banker and payable on demand is called a cheque. A cheque is considered to bounce or dishonored when the payee or holder presents the cheque but the cheque does not get clearance because of the following reasons:
The cheque bounce cases are criminal proceedings that are primarily governed by the Negotiable Instruments Act, 1881 and also by the Criminal Procedure Code, 1973.
When the cheque is presented by the payee for the second time and it bounces again, the recipient of the cheque can contact his lawyer to send a legal demand notice to the person who issued the cheque. The rationale behind sending a notice is to make an apprehension of a litigation in the mind of the issuer of the cheque. We can also understand it as a means of “Creating pressure” on the maker/drawer of the cheque. However, it is a necessary ingredient as per law and a criminal trial cannot be initiated if the notice is not sent to the drawer.
In the demand notice, we ask the drawer to transfer the requisite funds within 15 days, failing which we shall move the Court and a complaint under Section 138 of the Negotiable Instruments Act shall lie against the drawer/issuer. This notice has to be sent within 30 days of receiving the Cheque Return Memo from the Bank. If there is a satisfactory reason for delay, the Court may consider it.
The time limit to file a criminal complaint is 30 days. However, if there is a delay, you may still file the complaint if there is sufficient and satisfactory reason for delay.
After sending the notice, the drawer/issuer is given 30 days to make the payment to the recipient. However, if the drawer chooses not to reply to the notice or fails to make the requisite payment, a complaint under Section 138 can be filed in the Court of Metropolitan Magistrate, who has the jurisdiction to try the case.
The jurisdiction of the complaint shall be determined by:
It is advisable that you consult a legal professional to help you represent your case if you have been accused in a Cheque Bounce case.
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