Dishonour Of Cheque & Its Legal Remedies!

Khushi Chhajer

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For understanding the “dishonour of cheque,” one must know about the cheque and its remedies.

Cheque: paper used to pay for day-to-day purchases, but an instrument that can be negotiated.

What’s Cheque?

A cheque is a paper that directs a bank to pay the person whose name is mentioned on a cheque (yes, that paper!).
It is the Sum of Money from the account of the Issuer (of a cheque).
The one who writes the cheque is called ‘Drawer’.

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A cheque might be said as an Exchange Bill as it is used the most to prevent the need to move hefty quantities of money.
A search may be carried out and supported by both (an ordinary person and legal bodies) for the cheque.
In the case of Cheque Bounce, remedies can be carried in civil or criminal behaviour.

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Civil Law addresses the conduct, i.e., the violation of a person or a private entity, such as a business.
Generally, if dishonour of cheque happens, a Civil Suit is filed to recover the money. Such a plea should be upheld in the Court of Justice, according to the Bombay High Court.

via livelawhindi

While a Criminal Suit forces the defaulting party to be disciplined, the return of dues (or damage) does not necessarily occur.
One can file a Lawsuit in the city where the petitioner lives or the cheque was previously placed. This is done to simplify the time of civil remedy for the survivor.

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Criminal Law describes it as something that causes harm to someone or someone’s property, even if it’s society.
The search bounce is a criminal offence in India under the Negotiable Instrument Act (Section 138) by its existence.

via hustlermoneyblog

This only happens if the search bounces due to insufficient funds (and not due to any other technical default of the Drawer).
A formal note to the Drawer is the first step towards the solution.
This is done within 30 days of the “cheque back memo deadline”. Within 15 days of acceptance of such a note, a Deposit is made.

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After 15 days, if the Drawer fails to meet the duty to pay, a criminal suit begins by appealing to the Court (either the First Class Judge or the Metropolitan Judge).
This shall be followed by a Statement of Guarantee. The Drawer is requested to appear before the judge for the summary trial (as “he/she” reviews records and confirms summons).

via lawrato

In case of dishonour of cheque, banks refund or “bounce” this sort of cheque (also known as rubber cheque) rather than honouring them, charging the cheque authors NSF fees.

Blog Edited By Ritika Gupta

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