The Negotiable Instrument Act, 1881 is applied as the cheque bounce law in the cases of dishonor of cheque and has been amended many times since 1881. As per Section 138 of the Act, dishonoring of a cheque is a criminal offense and is punishable by imprisonment up to two years or with a monetary penalty or with both.
If the payee wants to take legal action then the drawer should be given a chance of repaying the amount and such chance can be given in the form of notice in writing. The payee has to send the cheque bounce notice to the drawer within 30 days from the date of receiving ‘Cheque Return Memo’ from the bank.
The notice needs to mention that the cheque amount has to be paid to the payee within 15 days from the date of receipt of the notice by the drawer. If the drawer fails to do that within 30 days of receiving the notice the payee has the right to file a criminal complaint under section 138 of the Negotiable Instruments Act.
The complaint needs to be registered in a magistrate’s court within a month of the expiry of the notice period. The court will issue summons and hear the matter on receiving the complaint along with an affidavit and relevant papers. If the drawer is found guilty then he can be punished with monetary penalty or imprisonment for a term.
Also, the bank can stop the cheque book facility and close the account for the repeated number of bounced cheques.
It is important to consult a qualified lawyer in this case and if you are looking for a Cheque bounce lawyer in Delhi, you can contact us.
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