Ambit of Compensation & Reliefs under a Cheque Bounce Case
In the case of an account payee cheque or otherwise, the legal remedies available are as under
• Complaint must be filed within 30 days after receipt of the response to the cheque bounce legal notice, or within 30 days after 15 days from the date of receipt of the notice, provided that no response from the cheque drawing received. However there is a possibility that the Metropolitan Magistrate may in extraordinary circumstances forgive the failure to comply with the 30-day time-frame.
• The discretionary nature of the cheque also applies to Section 138 of the Negotiable Instrument statute if payment of the cheque was halted by a cheque drawer.
• If, after receiving a cheque bounce legal notice, the drawer of the cheque requests that the cheque be presented again, and the cheque is dishonoured again, the drawer’s timeframe as specified in the notification is not extended.
• In order for Section 138 of the Negotiable Instruments Act to apply, the cheque must be issued as a legal obligation. It simply implies that a cheque presented as a gift, contribution, or other non-legal obligation is not protected by the cheque bounce legislation or cheque bounce act. It may be noted that a cheque expires three months after it is issued.
The punishment imposed by Section 138 is 2 years in prison or a fine of double the amount violated, or both. It is a punishable offence. According to the Negotiable Instruments Act of 1881, the complainant must have filed a written complaint of the crime with a Court not lower than that of Metropolitan Magistrate or Judicial Magistrate of the First Class. This complaint must be made within one month after the occurrence of the cause of action. The drawee may file the complaint at the jurisdiction’s local limit where:
- the cheque is written;
- The cheque was returned by the bank
- The drawee served the notice of demand for payment.
Sections 417 and 420 of the Indian Penal Code (IPC) of 1860 allows for the instant issuance of a non-bailable warrant against the drawer. When more than one cheque is bounced, the drawee might file a separate suit for each of them, which can complicate matters for the defaulter. It is a bailable offence, which means that if the drawer fails to appear before a judge after getting summons, the Court can execute a non-bailable warrant against him and he can be jailed. Normally, the Court will summons for the accused to appear before a judge, However, if the accused fails to represent himself and is absconding, the Court will a bailable warrant, at the police station where the defendant dwells. There are, however, circumstances of cheque bounce which are subject to a penal penalty covered by the provisions of section 420 of the Indian Penal Code 1860, the criminal breach of trust under section 405 of the Indian Penal Code, 1860 respectively. A complaint to the police may be made for such cases in the jurisdiction where the situation originates.
The accused drawee can aslo launch a civil lawsuit to collect the due money from the drawer. Under Order XXXVII of the Code of Civil Procedure, 1908, a summary suit may be filed. . In order to ensure that the defendant has the right to defend himself, Order XXXVII of the Code of Civil Procedure of 1908 stipulates a summary suit, Prosecuting the drawer under the criminal code would not prohibit the complaint from filing a civil action to recover the entire value of the cheque or a portion of it. It will not put the rule of double jeopardy in risk. According to the Supreme Court, any connected pending criminal issue would not hinder the procedures of a civil complaint. As a result, both processes can occur at the same time. Accordingly, these are some of the remedies that can be availed by the aggrieved in case of Cheque Bounce cases. However, one must keep in mind that all these remedies can only be availed if the above mentioned condition for cheque bounce is fulfilled.
Authored By: Adv. Anant Sharma & Swayamsiddha Das