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What to do in case of Cheque Bounce? Complete Procedure

 In today's time of "Digital India", cheque has become a major source of financial transactions. But cheque bounce have also become a major problem, as payments are not on the spot like cash. Yet most of us are completely unaware of the legal process in case of check bounce. So friends today we are going to discuss the legal process in case of check bounce.


1) Common reasons for check bounce are: 

i. Difference in signature, 

ii. There is not enough money in the account, 

iii. Account is closed, 

iv. Stop Payment by the debtor, 

v. Difference between words and amount, 

vi. When the account has been frozen by the government or the court.


2) As soon as the cheque is bounced, the cheque holder has to demand the amount by sending a legal notice, either personally or through his lawyer, within 30 days of the issue of return memo (a 'return memo' is given by the bank to the payee stating why the cheque has been bounced).


3) The notice should inform the debtor about the cheque bounce and give him an opportunity to pay the amount mentioned in the cheque within 15 days of the receipt of the notice.


4) If he fails to pay within 15 days, the person in whose favor the cheque was issued, can file a criminal complaint under section 138 within 30 days.


5) The complaint can be lodged in the court of the area where the complainant deposited the cheque.


6) Immediately after the complaint is lodged, a date is fixed for its hearing. While admitting the case, the court sees whether the prerequisites for registering a cheque bounce case are being complied with or not. Once the court is satisfied with that, then comes the stage of pre-summoning evidence, which as the name suggests refers to the evidence of the complainant even before summoning the accused.


7) Thereafter the court will issue notice/summon to the accused at the address mentioned by the complainant. If the accused fails to appear on the stipulated date, then the counsel for the complainant can petition before the court for the issuance of a bailable warrant against him. If the accused still does not appear, the court can issue a non-bailable warrant, and after it is issued, there is very little chance that the accused will not appear.


8) Now once the accused is before the court, firstly the court prepares a notice under CrPC, in simple words, the court asks the accused whether he is guilty or not. If yes, then there is a possibility that the matter may get resolved as discussed above. However, in a situation where the accused claims not guilty, then the court records the defense of the accused.


9) Thereafter, in most of the cases, the accused through his counsel files an application under section 145(2) of the Negotiable Instruments Act, seeking permission to cross-examine the complainant and other witnesses. The counsel for the accused then cross-examines the complainant along with putting forward the defense of the accused.


10) After the completion of cross examination of the complainant, comes the stage where the court records the statement of the accused under section 313 of CrPC, in which the accused can once again repeat his defense.


11) At this stage, the accused has the option to file evidence through affidavit. This is a very important decision, because if the accused wants to give his evidence, he will also be cross-examined by the counsel of the complainant.


12) After the completion of the evidence, a date is fixed for the final argument in the case. In which both the parties get an opportunity to prove the case according to law.


In the end, after hearing both the sides, the court gives its verdict.



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