A cheque bounce, also known as dishonour of cheque, occurs when a cheque cannot be processed due to insufficient funds, account closure, or signature mismatch. In India, cheque bounce cases are governed under Section 138 of the Negotiable Instruments (NI) Act, 1881. If you are a victim of a cheque bounce, the law provides you with remedies to recover your money through a proper legal process.
The cheque must be presented to the bank within its validity period (generally 3 months from the date mentioned on the cheque).
If the cheque bounces, the bank will issue a ‘Cheque Return Memo’ mentioning the reason for dishonour.
The payee (person to whom the cheque was issued) must send a written legal notice to the drawer (person who issued the cheque) within 30 days from receiving the Cheque Return Memo. The notice should demand payment within 15 days.
If the drawer fails to make payment within 15 days of receiving the notice, the payee can file a criminal complaint under Section 138 of the NI Act. The complaint must be filed within 30 days after the expiry of the 15-day notice period.
The court will issue summons to the drawer. If proven guilty, the drawer may face imprisonment of up to 2 years, a fine up to twice the cheque amount, or both.
Imprisonment up to 2 years, or a fine up to double the cheque amount, or both.
Yes, many states allow e-filing of cheque bounce cases through district court portals.
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