Cheque bounce: Know penalty, jail term, legal action in case of Cheque bounce
In today’s digital era, people are preferring to make online payments. On the other hand, many people still prefer to do transactions via banks through cheques. Transacting through cheques is seen as a reliable option. If you are going to pay by cheque, in such a situation, it is important to know about some information. If you don’t take care of these things, you may have to face many problems. In such a situation, it is necessary to take many precautions while making payment through cheque. If you make a slight mistake while paying by cheque. In this case your cheque may bounce for which you will have to pay a fine if the cheque bounces. In some cases even a case is filed. In this case the person who has drawn the cheque may even have to go to jail.
Why does cheque bounce?
There are many reasons for bounced cheques. Which are the main reasons for frequent cheque bounces. They include non-availability or low balance in the account, change of signature, wrong account number, misspelling of words, overwriting, non KYC compliance etc.
What if the cheque bounces?
If your cheque bounces. In this case you have to pay the fine. However, the amount of penalty also varies for different reasons for check bounce. In this, the amount of fine can be from Rs 150 to Rs 800.
Cheque bouncing is a crime in India. Under the Check Bounce Negotiable Instrument Act, 1881, the person can be prosecuted in case of cheque bounce. In this, the person can be imprisoned for 2 years, fined twice the amount of the check or both.
Significantly, such a situation arises only when the person giving the cheque does not have money in his account or the bank dishonors the cheque. When this happens, there is no trial at all. The bank sends its receipt to the creditor. It mentions the reason for the check bouncing. After this happens, the creditor has to send a notice to the debtor within 30 days.
If no response is received within 15 days. In this situation, the creditor can file a complaint in the magistrate’s court. If you do not get your money even after doing this. In this situation, you can file a case against the concerned person.
