Cheque Bounce Cases in India

“Dishonour of cheque” or “cheque bounce” means instances where the Bank refuses to honour the cheque presented at its counter. The Negotiable Instrument Act, 1881 or NI Act under Section 138 makes cheque bounce cases in India a criminal offence. A bad cheque is when it is unable to fulfil the purpose where the bank account upon which the cheque has been created is insufficient. As such the drawer is the primary person likely to carry the responsibility to make things right and in case of default faces criminal prosecution. A layman understanding of Section 138 of the NI Act simply says that “if you are accused of trying to defraud the person you have written a bad cheque to then you could be charged as a criminal”.

The technicality of it is that it is up to the payee or holder in due course i.e., the person on whose name cheque is drawn for payment of any debt or liability by the drawer (person responsible for drawing the instrument) to extrapolate culpability. This factor distinguishes it from other penal offences.

The number of these cases in Delhi which has rapidly became the financial hub of India is on the rise. The docket of Metropolitan Magistrate courts is daily registering the cases of cheque bounce. As grievous as it may sound, the instances of bad cheque are not remote and if anything, it can be taken as a matter of daily occurrence. Some of the most common ways a cheque can bounce are:

1. When the drawer forgets how much money he has in his bank account.

2. When the drawer thinks that he’ll be able to make deposit before the cheque is processed.

3. When even if the drawer has full knowledge of his account balance, he draws the cheque in amounts which exceeds the balance.

The prudent move by any defaulter or of the holder would be to seek legal advice of top cheque bounce lawyers who can bring efficient result with professional representation. Due to commonality of these cases, cheque bounce case lawyers in Delhi/NCR have formed a seasoned approach to bring result oriented legal advice. Consultancy can be sought readily on internet which can range from free legal advice online to paid legal services. The extent of which however rests on facts of the cases which can be simple enough or complicated.  

Simple cases mean default out of bona fide mistakes which can be mitigated by following the blanket of caution as given in the legislation itself. These are:

(i) Cheque should have been drawn in discharge of debt or liability,

(ii) Payee should present it within its validity period,

(iii) Payee must send notice demanding payment within 15 days of receiving notice of dishonour,

(iv)  The drawer can make payment within 15 days from the date of receipt of notice,

(v) In case of continued default, payee can lodge a complaint within one month of the cause of action arising,

It is within the said period of one month, that a case can be initiated. This is where the complications may arise and depending on the facts, the help of best cheque bounce lawyers in Delhi/NCR must be seeked. Once the prosecution initiates, the important questions of law rests upon whether the case is brought within the limitation period and whether the court of cognizance is the court of jurisdiction where the branch of the bank on which the cheque was drawn is located and not where the payee or the holder resides or have his place of business.

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