Cheque Bounce Case Registration India –
Bouncing of Cheque is considered to be an criminal act as per the Negotiable Instrument Act 1881 , when the return of the cheque by the Bank is due to insufficient funds and various other reasons. The law provides for imprisonment upto 2 years and/or fine, which may extend to twice the amount of the cheque.
Essential Conditions u/s 138 of the Act:
a) A cheque must have been drawn by a person on an account maintained by him for payment of any sum of money to another person from out of the account;
b) The cheque must have been issued for the discharge, either in whole or in part, of any debt or other liability, though, in the absence of proof to the contrary, it shall be presumed that it was issued for the same;
c) The cheque shall be returned by the bank unpaid –
i) either because of the reason insufficient funds to honour the cheque; or
ii) because it exceeds the amount arranged to be paid from the account by an agreement with that bank.
d) The stop payment of cheque is also covered under said provisions, as it points to the dishonest intention of the drawer.
The bouncing of cheque entitles the holder of cheque to take criminal action against the drawer of cheque but only if a strict procedure is followed in this respect, which is as follows:
1. In case a cheque is bounced, a notice has to be issued to the drawer of the cheque (Oppsoite Paty) within 30 days from the date of memo accompanying the bounced cheque is received from the Bank.
2. The notice by the holder of the cheque should demand the amount for which the cheque has been bounced, providing 15 days to settle the matter.
3. The Opposite Party has 15 days from the receipt of the notice to settle the matter and no cause of action arises till the expiry of these 15 days or if paid within this specified period.
4. After the completion of said 15 days, if the opposite party does not settle the matter or ignores the notice, then the holder of the cheque may file a criminal complaint before the appropriate court within 30 days of the expiry of said 15 days.
5. In case, it is beyond the said period of 30 days, the delay can be condoned by the court on sufficient cause being shown.