Cheque bounce, also known as dishonour of cheque, occurs when a bank refuses to honour a cheque due to insufficient funds or other reasons.

Types of Cheque Bounce:

  1. Insufficient Funds
  2. Signature Mismatch
  3. Expiry of Cheque Validity
  4. Stolen or Lost Cheque
  5. Stop Payment Instruction

Cheque Bounce Procedure:

  1. Issuance of Cheque: Drawer issues cheque to payee.
  2. Presentation: Payee presents cheque to bank.
  3. Dishonour: Bank refuses to honour cheque.
  4. Notice: Payee sends notice to drawer within 30 days.
  5. Complaint: Payee files complaint in court within 30 days of notice.

Cheque Bounce Laws:

  1. Negotiable Instruments Act, 1881 (NI Act)
  2. Section 138: Dishonour of Cheque
  3. Section 139: Presumption of Dishonour
  4. Section 140: Defence of Drawer

Consequences of Cheque Bounce:

  1. Criminal Prosecution
  2. Fine up to ₹1 lakh
  3. Imprisonment up to 2 years
  4. Damage to Credit Score
  5. Civil Liability

Cheque Bounce Case Filing Process:

  1. Filing Complaint: Payee files complaint in magistrate court.
  2. Summons: Court issues summons to drawer.
  3. Hearing: Court hears arguments from both parties.
  4. Judgment: Court delivers judgment.

Cheque Bounce Case Documents:

  1. Original Cheque
  2. Dishonour Slip
  3. Notice to Drawer
  4. Proof of Service
  5. Affidavit

Cheque Bounce Case Fees:

  1. Court Fees: ₹100-₹500
  2. Lawyer Fees: ₹5,000-₹50,000

Cheque Bounce Case Timeline:

  1. Filing Complaint: 30 days from notice
  2. Hearing: 6-12 months
  3. Judgment: 1-2 years

Cheque Bounce Prevention:

  1. Verify Account Balance
  2. Ensure Signature Match
  3. Use Cheque Validity Period
  4. Avoid Stop Payment Instructions