What is Cheque Bounce?
Cheque bounce happens when a cheque you give to someone or receive from someone cannot be processed by the bank. The most common reason is “insufficient funds”, but it can also happen due to:
- Wrong signature
- Overwriting
- Mismatch in figures or words
- Account closed
Legal Meaning
If a cheque bounces due to insufficient funds, it is a criminal offense under Section 138 of the Negotiable Instruments Act, 1881.
Step-by-Step Cheque Bounce Case Process
Step 1: Cheque is Returned by Bank
When the cheque is presented in the bank and gets bounced, the bank issues a Cheque Return Memo explaining the reason for the bounce.
Step 2: Legal Notice to the Issuer
The payee (the person who received the cheque) must send a legal notice to the drawer (the person who issued the cheque) within 30 days from the date of receiving the Cheque Return Memo.
Legal Notice Includes:
- Details of the cheque
- Date it was issued and bounced
- Request to make the payment within 15 days
Step 3: Wait for 15 Days
The drawer has 15 days to respond and make the payment. If payment is made, the matter is resolved.
If not, the next legal step can be taken.
Step 4: Filing a Case in Court
If payment is not received, the payee can file a criminal complaint in the court within 30 days after the 15-day notice period ends.
Court Jurisdiction:
The case must be filed in the court where:
- The cheque was presented (bank branch), or
- The cheque was returned unpaid
Step 5: Court Summons and Trial
- The court will check the complaint and issue a summons to the drawer.
- The drawer has to appear in court and respond.
- The trial begins, and both sides present evidence.
Step 6: Court Decision
If the court finds the drawer guilty, he/she may be punished with:
- Imprisonment up to 2 years, or
- Fine up to twice the cheque amount, or
- Both
Documents Required to File the Case
- Original bounced cheque
- Bank’s return memo
- Copy of legal notice
- Postal receipt or courier receipt (proof of sending notice)
- Copy of complaint
Important Points
- Cheque must be for legally enforceable debt.
- Case must be filed within the legal time limits.
- If deadlines are missed, the case may be dismissed.
Conclusion
A cheque bounce may seem like a small issue, but it can lead to big legal trouble. If you follow the process correctly and take help from a good lawyer, you can get your money back or see justice done. Whether you’re the one filing the case or defending it, now you know exactly what to do.
