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Cheque Bounce Cases

BRIEF DISCUSSION ABOUT FILING OF CHEQUE BOUNCE CASE

Under The Negotiable Instruments Act, Cheque Bounce is a Criminal Offence. The Negotiable Instruments Act (N.I.Act) deals with the subject of cheque bouncing, Cheque dishonor or Cheque return matters. Cheque bouncing happens when a person has issued a Cheque without maintaining sufficient amount in his account, as a result when the Cheque is presented for enchasing, the same is returned by the bank unpaid which is termed as Cheque Bounce.

Under Section 138 of the Negotiable Instruments Act has been made to deal with bouncing of Cheque besides the provisions under the IPC and the Code of Criminal Procedure of 1973. The case of cheque bouncing is tried as a summary trial case before the Magistrate Court.

STEPS TO BE FOLLOWED TO FILE A CHEQUE BOUCE CASE:

STEP-I
Notice:
After obtaining the Cheque Bounce Memo from the Bank, a legal notice has to be issued within 30 days from the date of its return, to the person who issued that cheque. Service of notice on the person issuing the Cheque is mandatory; the mode of service of notice can be any recorded delivery which is admitted as evidence under the Indian Evidence Act. Notice should be sent by Registered Post Acknowledgement Due, Speed Post Acknowledgment Due only. The purpose of making such provision is to make the person issuing the Cheque aware about the fact that the Cheque issued by him has been returned by his bankers due to insufficiency of funds or of any other reason, in the account and he has to make arrangement for the amount within the stipulated period and intimate the banker as well as the person to whom the Cheque has been given by him.

STEP-II
Filing of Complaint:
The filing of the complaint is the second stage of how to file case against cheque bounce and should be done carefully through a lawyer. The complaint is to be filed before the Magistrate court of the area concerned within 30 days from the date of dispatch of notice under Section 138 of the Negotiable Instruments Act.

STEP-III:
Notice to the accused:
After filing of the complaint in the the Hon’ble Court, the Hon’ble Court issues notice to the accused person or the person who has issued the cheque and the said person is required to appear before the court either person along with advocate/lawyer and seek bail from the court and contest the matter.

STEP-IV:
Trial:
The complainant has to file evidence in support of the complaint along with the documents like Original cheque, the memo issued by the bank and the record showing the service of notice on the person who has issued the cheque and all other relevant documents in support of the matter which can prove that the accused is under legal obligation to pay the amount under the bounced cheque. The process of trial for cases under Section 138 of the Negotiable Instrument Act, is summary and the court has to take into consideration the records furnished by the complainant and the evidence in support. The complainant is asked to lead his evidence during which he summons the records from the bank related to the cheque. The accused is given the opportunity to cross examine. The accused is thereafter asked to lead his evidence and disprove the allegations against him.
The court then proceeds to dispose off the matter on the merits and accordingly arguments on all issues are head and the matter is decided accordingly.

STEP-VI
Punishment:
The punishment as contained under Section 138 of the Negotiable Instrument Act, is two years and a penalty of the amount equal to two times of the amount as mentioned on the cheque.