CHEQUE BOUNCE LAW: Check bounce is a punishable offense up to jail, know what are the rules

 


All bank account holders should know the rules related to check bounce. Know why your check may bounce. And when there is a provision of punishment for check bounce.

Payment options are available through digital means. But check payment is a safe medium. Transaction of money through check has been going on for years. But you should fill your details carefully while making check payment. If the check bounces, then the person has to pay some penalty. Along with this, there is also a provision of punishment in some serious cases.

WHAT IS THE MEANING OF CHECK BOUNCE


When the bank for some reason rejects the check and the payment is not made, it is called check bounce. The reason for this happening is mostly due to lack of balance in the account. Apart from this, even if there is a difference in the signature of the person, the bank rejects the check.

LEGAL NOTICE CAN ALSO BE SENT


In case of check bounce, you have to inform that person about it. After which it is very important to pay you within 1 month. In the event of not doing so, a legal notice is sent to the person. Even after that, if no reply is given for 15 days, then a case can be registered against him under section 138 of the Negotiable Instrument Act 1881.

PUNISHMENT CAN BE UP TO 2 YEARS 


Check bounce is considered a punishable offence. And if so, there is a provision of both fine, and imprisonment for 2 years. A case is registered against him under section 138. The person whose check has bounced has to pay the amount along with interest along with the punishment of 2 years. The amount of this penalty also depends on the number of times the check is returned by the bank. 

Comments

  1. Nk JainJanuary 8, 2022 at 5:14 AM

    I have given 8 lakh to someone on 12.5%intrest but he does not pay intrest on payment date.He paid post dated cheque.What should I do.

    ReplyDelete
    Replies
    1. UnknownJanuary 8, 2022 at 10:10 PM

      As far as I am aware, if you do not have money lenders license you cannot give on interest. You can claim back the principal amount

      Delete

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