Q: What would be the procedure if cheque is bounced ?

Ans: In circumstances when cheque is not honored, the Negotiable Instruments Act of 1881 is applicable. Since 1881, several amendments have been made to this Act.

The dishonor of a check is a criminal offence under Section 138 of the negotiable instrument Act, which carries a maximum two-year jail sentence, a monetary fine, or both.

Within 30 days of receiving the bank’s “Cheque Return Memo,” the payee or drawee must give the drawer the notice. The notification must state that the payee or drawer must receive the amount of the check within 15 days of the drawer’s receipt of the notice. The payee has the right to submit a criminal complaint under Section 138 of the Negotiable Instruments Act if the cheque issuer or drawer does not make a new payment within 30 days of receiving the notification.

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