This post discusses why a cheque bounces. Cheque bouncing is a serious offence and you can get a criminal case filed against you. This post lists out the various reasons you need to hire a cheque bounce lawyer to help you with the challenging process.
Cheques are used by everyone in India as means of transferring money easily. However, if you receive a cheque from a debtor that has been dishonored or bounced, if someone has issued a notice for a cheque bounce against you, or if you have been given a court summons for a 138 Negotiable Instruments Act (NIA) complaint against you, you need to hire a cheque bounce lawyer. Read this article to understand why cheque bouncing occurs and why you should hire a cheque bounce lawyer.
Reasons for Cheque Bouncing
A cheque can get bounced for the many reasons mentioned below.
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Signature
The cheque will bounce if the signature of the drawer is missing from the cheque leaf, or if there is a difference that doesn’t match the specimen signature record with the bank. You need Cheque Bounce Lawyer for taking legal Actions.
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Deficient balance
If the drawer has stated a larger amount in the cheque than what is present in their bank account, the cheque will get bounced due to insufficient funds in the drawer’s bank account.
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Amount
If there are any discrepancies in the amount written in figures on the cheque and the amount written in words, the cheque will get bounced.
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Account number
The cheque will get bounced if the drawer’s bank account number is not legible, missing from the cheque leaf, or blurred, or when the cheque leaf is not based on the cheque truncation system (CTS) 2010 standard.
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Name
If the drawee’s or the stated account payee’s name is not the same as the name of the payee’s bank account, the cheque will bounce.
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Overwritten
If you have overwritten anything on the cheque, it will get bounced automatically.
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Modifications or alterations
If there has been any tampering or modifications to the cheque leaf without the drawee’s consent, the cheque is bounced.
Cheque Bounce Law
The Negotiable Instruments Bill was passed and amended in 2018. It states that section 138 Cheque bounce Act deals with the dishonor of cheques. It also states that it is a criminal offense. It stipulates that if the cheque is bounced, the drawer of the dishonored cheque has to pay twice the amount for compensation. If the drawer cannot pay this amount, he will have to serve a jail term of two years. If the case is severe, the drawer might have to pay twice the amount and serve two years in prison too.
Reasons for Hiring a Cheque Bounce Lawyer
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For recovering the amount
If someone has made a payment to you via a cheque that has been dishonoured or bounced because of insufficient funds in the drawer’s bank account, you can contact a lawyer. A cheque bounce lawyer can help you in recovering the amount with interest by taking the necessary legal measures under section 138 of the Negotiable Instruments Act.
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Notice
If you hire an experienced cheque bounce, he can help you by issuing a statutory notice to the drawer before taking any other step. They can act as the pleader for you on Power of Attorney (POA) when they file the petition.
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Protects you from legal trouble
If you had issued a check to someone that has bounced, you have nothing to worry about if you hire an efficient cheque bounce lawyer. You will probably get a court summons under section 138 of the Negotiable Instruments Act. Hiring a cheque bounce lawyer is the smart choice as they will protect you from incurring huge liability by efficiently managing your cheque Bounce Case Charges in the court of law. Cheque bounces and dishonor of cheques are classified as criminal offenses in India and should be taken seriously.
Procedure for Cheque Bounce Case
The following procedure to follow for a cheque bounce is quite complicated for someone who is not aware of the ins and outs of laws. A cheque bounce lawyer can help you significantly in following the correct procedure.
- If you get a bounced cheque, you must send a notice to the debtor thirty days or less after the date of the memo. The notice should be attached to the bounced cheque you got from the bank.
- Once you get the cheque from the bank, the notice should state the accurate amount for which the cheque has bounced. This claim notice should also state that there is a fifteen-day period for the debtor to give the correct amount and settle this matter.
- The debtor will get fifteen days after the date mentioned on the receipt of the notice to settle this matter. You cannot take any actions against the debtor during these fifteen days or if the debtor pays the money back within those 15 days.
- However, if the debtor does not settle the matter by paying the amount after the expiration of the fifteen days, as stated in the notice, then you are allowed to file a criminal case against the debtor before the appropriate court. You have a period of thirty days after the fifteen days are expired to file a criminal complaint.
- If there is some delay in filing the criminal complaint and you have taken more than 30 days, the court will not ignore the delay.
Legal Cheque Bounce Case
In a legal cheque bounce case, there are three parties.
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Drawer
The person who is supposed to pay the amount mentioned in the cheque.
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Payee
The person who presents the cheque to the court for clearance.
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Drawee Bank
The drawee is the associated authority which is directed to pay the amount.
Conclusion
Cheque bouncing is quite a common occurrence, however, it shouldn’t be taken lightly. If you have a cheque that bounced and got summoned to court, you must contact a cheque bounce lawyer Services to help you.
Vakilsearch has the best team of lawyers that can help you if you are the Payee or the Drawer in a cheque bounce case. They can walk you through the complicated legal process and help you get your money back or minimise your legal trouble.
Also, Read:
- Notice for Dishonour of Cheque
- Court Judgment on a Cheque Bounce Case in India
- Whether Cheque Bounce is a Criminal Offense
