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Cheque Bouncing

When a cheque is presented in the bank and is returned unpaid it becomes an offence under section 138 of Negotiable Instruments Act,1881 and is called dishonour of cheque when the drawee bank instantly issue and send a ‘Cheque Return Memo’ to the banker of payee. The cheque return memo mentions the reason for section 138 cheque bounce or non-payment. Lastly, the payee’s banker will return the bounced cheque and the cheque bounce memo to the payee.

There could be multiple reasons behind return of a cheque as unpaid like insufficient funds in the bank account of drawer, mismatch of signature or any other technical error due to which it returns unpaid. This return of cheque gives rights to the payee i.e the person who presented the cheque in bank  to initiate criminal proceeding against the drawer of the cheque.

The Negotiable Insturments’ Act,1881 lays down the procedure to be followed when the cheque is returned unpaid. It begins by sending the notice to the drawer within thirty days from the date of acknowledging the ‘Cheque Return memo’, stating wherein, to make the payment within next fifteen days from the date of receipt of such notice by the drawer. If the drawer fails, he/she is punishable The Negotiable Insturments’ Act,1881. Our team of professionals dealing with commercial-non  commercial cases can be the best at assistance on this.

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