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Cheque Bounce

Is Cheque Bounce a Criminal Offense?

Read this blog to know whether or not cheque bounces are a criminal offense in India.

Cheque bounces are the most common financial problem faced by major companies or banks. Further, not all Cheque bounces are considered a criminal offense.

However, if the problem continues repeatedly, then you can face legal consequences. What are the reasons for check bounces in India? What are its consequences? Can the bounced cheque be deposited again and what should you do when your cheque bounces? These are some of the areas we will cover in this article.

A cheque bounce is a natural financial problem that can happen anytime during your transactions. However, when there is a constant cheque bounce, then you may have to face legal consequences. Sometimes it can be due to technical reasons or mistakes from the individual applicant. But if the cheque bounces due to a serious problem, then you might have to face legal actions like payment of fines or even a prison term. What are the key reasons for cheque bounce? Let us learn in detail.

Reasons for Check Bounces in India

There are many reasons why a cheque can bounce in India. Knowing about these reasons will help you avoid such mistakes in the future. They are:

No balance in your account

One of the prime reasons why your cheque can bounce is due to the non-availability of balance in your account. For writing a cheque, an individual should have a proper balance in their account. But if there is no balance at all in your account then the cheque bounced

Insufficiency of funds in the bank account

Another reason is the insufficiency of funds in the individual’s bank account as per section 138 of the negotiable instrument act 1881. As per the same if the individual has a balance in their account but they are sufficient enough for writing a cheque in their name then your cheque can bounce in no time.

Mistake while writing a cheque

While making bank transactions, an individual must be careful and avoid any kind of mistake. Moreover, in case of drawing a cheque in your name, ensure that you write all the details correctly and avoid mistakes like a mismatched signature, incorrect date, wrong account number, etc. because these mistakes can lead to your cheque getting bounced. 

The account gets closed right before or after writing the cheque

A most important problem is the closing of the individual’s account right before or after drawing the cheque. Make sure you don’t close your account accidentally or purposefully before or after drawing the cheque. Because this can lead to bouncing of your cheque. 

The amount of payment through cheque is more than the set limit

The final and the most critical reason for cheque bounce is the exceeding amount of payment through your cheque than a set limit. For every transaction, the individual has to withdraw only the amount within the set limit. Further, the amount of payment through cheque is no exception. If the individual crosses the set limit of the payment amount through cheque, then their cheque can get bounced.  Thus, these are the reasons why the cheque can get bounced in India. You Can Know more about the Cheque Bounce Charges Applicable For the Business Issues.

What Should You Do If A Cheque Bounces?

Now, we know the common Reason for Cheque Bounce case. But what happens when your cheque bounces in India? This is one of the most important doubts we all have in our minds. Further, we will understand the consequences of cheque bounces in India in detail:

A heavy penalty fee will be levied by the banks

The most common consequence of a cheque bounce is the levying of a hefty penalty fee by banks on the Individual. Once the banks discover the cause of the cheque bounce, they levy a heavy penalty fee on the individual for the same. Further, it can cost them more than their lifetime earnings.

The payee can initiate legal actions to save their rights

The payee to whom the individual is intending to write the cheque for can initiate legal actions against the drawer of the cheque to save the payee’s rights in cheque bounces cases.

The cheque drawer has to face cheque bounce penalty charges

In case the individual is found to have been involved in a cheque bounce, then they have to face additional cheque bounce penalty charges along with heavy fees that are levied by their banks. Further, this can bring down your investments to zero.

The social reputation of the cheque drawer is tarnished

When the individual cheque gets bounced, not only his private life but also his social life and reputation can get tarnished for life. No matter what they say or do in the future, people will see them as an offender. 

The payee can end up in financial danger due to a cheque bounce

The final and the most critical consequence of cheque bounce is the payee ending up in financial danger due to the cheque bounce. Similar to the individual who suffers due to cheque bounce, the payee can also end up in a financial crisis due to the same. 

Hence, these are the consequences both the individual and the payee has to face in case of cheque bounce in India.

Cheque Bounce Notice

When the payee receives the cheque bounce memo from the drawee’s bank, then they can immediately serve the individual with a legal notice. The Legal notice draft should include the actual amount involved in the case and the history of debt regarding this case. Moreover, the drawee should be allowed 15 days to mend their mistakes. Further, if they don’t follow the same within 15 days. The legal notice action begins on the 16th day. 

Thus, as soon as the payee discovers the drawee’s bank’s cheque bounce memo, they should serve the drawee with notice and provide them with 15 days. This way the payee can ensure that the drawee doesn’t repeat this offense in the future. 

Can a Bounced Cheque be Deposited in India?

Can a bounced check be deposited back again? This is something we all want to know. Yes, in case, the drawee experiences technical glitches like insufficient balance, exceeding payment limit or error in signature, etc.

The drawee can request payment through another cheque or use the same cheque for payment by increasing the balance of your account. 

So, in case of minor technical problems, the drawee can deposit the same cheque again in the bank. Or draw another cheque to modify your genuine errors. 

What Actions to take if the Cheque Bounces?

There are many steps you can follow in case the cheque gets bounced. They are as follows.

Firstly, collect the drawee bank’s memo that consists of the reason behind the cheque bounce

The payee should collect the drawee bank’s memo that includes the reason behind the cheque bounce in case the payee gets to know about the cheque bounce. 

Secondly, confirm the reason behind the cheque bounce

Secondly, the payee must confirm the real reason behind the cheque bounce.

Thirdly, contact the drawee in case of small discrepancies

Next, ensure that you contact the drawee in case of small errors in the cheque bounce. 

Allow the drawee for 15 days for rectifying their mistakes

Finally, allow the drawee to modify the errors within 15 days. 


Overall, cheque bounce is a criminal offense if the drawee purposefully provides the payee with a bounced cheque.

However, if the cheque gets bounced accidentally then the drawee is given 15 days to rectify the mistake along with a penalty fee. Moreover, consult legal firms like Vakilsearch to get more understanding about the cheque bounces in India. 

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