You may have noticed that people often give us checks, which are used to return money or make payments for goods. However, when the amount stated on the check isn't in the bank account, it bounces. Such cases are taken very seriously. However, if your cheque has bounced or someone has made a payment to you and the check has bounced, learn the legal implications.
What does the law say?
Cheque bouncing cases are handled under Section 138 of the Negotiable Instruments Act. This law applies to cases where a cheque is issued to satisfy a debt or legal obligation. If a cheque bounces, the payee must send a written notice to the issuer of the check within 30 days of receiving the notice from the bank. After receiving the notice, the issuer has 15 days to make the payment. If they fail to do so within this time, the matter can be taken to court.
What are the punishment provisions?
Once a cheque bounces, it is considered a criminal offense under Section 138. If convicted, a person can face a maximum of two years in prison. In some cases, if there's no jail time, they can be fined up to twice the check amount. Or, in many cases, both punishments can be combined.
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