New Laws for Cheque Bounce in India

You can evaluate your case by connecting our Advocate

High Court , Chennai.

As of my last update in 2022, laws regarding cheque bounce in India are governed by the Negotiable Instruments Act, 1881. However, please note that laws can be updated or amended, so it’s important to verify any recent changes or additions to these regulations. Here are some key points regarding cheque bounce in India:

  1. Cheque Bounce: If a cheque is dishonored due to insufficient funds or any other reason, it is considered a criminal offense under Section 138 of the Negotiable Instruments Act.

  2. Legal Action: The payee (the person to whom the cheque was issued) can send a legal notice within 30 days of the bounced cheque to the drawer (the person who issued the cheque) demanding payment.

  3. Payment Demand: The drawer has 15 days from the receipt of the notice to make the payment. If the payment is not made within this period, the payee can file a criminal complaint within 30 days from the expiry of the 15-day period.

  4. Penalty: The penalty for a cheque bounce could include imprisonment for a term which may extend to two years or with a fine which may extend to twice the amount of the cheque, or both.

  5. Jurisdiction: Cases related to cheque bounce are tried in a court that deals with matters under the Negotiable Instruments Act.

It’s important to consult a legal professional or refer to the latest amendments or legal updates in this regard as the laws may have changed since then.