Cheque Bouncing Cases

Cheque Bouncing: Liability of the Offender

Cheque these days have become a common and usual way of the transaction between people whether it is for the business purpose or maybe personal.

Cheque Bouncing Cases

What is cheque bouncing?

Cheque bouncing is an offense under Indian legal system and it happens when someone issues a cheque to a person and upon his showing it to the bank expecting money in exchange, it gets dishonored instead or bank denies from accepting that cheque. The reason for a cheque being dishonored may be either because your bank account does not have sufficient funds from which money can be taken out and given to the cheque holder or the cheque is inappropriately filled.

What actions can be taken upon cheque bouncing?

If the cheque bounces, because of insufficiency of funds in the account of the drawer of the cheque and you believe that the same has been done intentionally only to avoid the payment. There is nothing to worry about as law will come to your protection and will ensure that you not only get the amount due on the drawer of cheque but also the interest that accrues due to intentional delay in payment of money.

There are two options with you to recover your money:

Criminal Complaint

You can sue the defaulter with criminal charges, the procedure of which is very simple. Once the cheque is returned by bank dishonored, the holder can re-submit the cheque to the bank in 3 months if he thinks the cheque will be honored next time (this is just to give another chance to the drawer to pay the amount). But, if you are certain that he has been playing fraud and evading the rightful payment, you have to just send a legal notice within 30 days from the date of dishonor stating every detail of the transaction and event. Now, the issuer of the cheque has to pay the amount in another 30 days from receipt of the notice, but if he doesn’t, the holder of the cheque can file a criminal complaint under Section 138 of Negotiable Instruments Act. Always remember to file suit within the time limit, otherwise, the court will not entertain the matter and you would not get your money.

Now, since you had already done your part by sending him the goods, but he is evading the payment intentionally, you can also concurrently lodge a police complaint accusing of criminal breach of trust and cheating, upon which police would come and investigate.

Civil Complaint

The recourse to a criminal action may be ruled out if your aim is to not criminally make liable the other person, but only to recover your dues.

Thus, the holder can do so by filing a civil suit under the code of civil procedure and seek to recover his amount with interest and cost borne by the holder while litigating.

What relief do you get?

The court after looking into the matter and hearing both parties, and also after agreeing to the fact that the other party has fraudulently evaded payment, would punish the defaulter and also grant you whole amount which was due, with interest that might accrue annually (generally 18% p.a.), and not only this you may also get to be compensated for the losses suffered due to such inordinate and unreasonable delay in payment and you can also ask for payment of litigation cost that you might have incurred to this act.

Also, note that police also has the power to arrest the defaulter, upon your filing of a criminal complaint under section 420 Cr.P.C.

How AKT Associates can help you if your cheque bounces?

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