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Filing Procedure for Cheque Bounce Case: Lawyers Advice for Cheque Bounce Case in India | Criminal Law Attorney in India | Criminal Law Attorney in Delhi NCR | Criminal Lawyer in Delhi NCR

Best and Experienced Lawyers online in India > Anticipatory Bail & Regular Bail  > Filing Procedure for Cheque Bounce Case: Lawyers Advice for Cheque Bounce Case in India | Criminal Law Attorney in India | Criminal Law Attorney in Delhi NCR | Criminal Lawyer in Delhi NCR

Filing Procedure for Cheque Bounce Case: Lawyers Advice for Cheque Bounce Case in India | Criminal Law Attorney in India | Criminal Law Attorney in Delhi NCR | Criminal Lawyer in Delhi NCR

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The Negotiable Instruments Act of 1881: As per the act, cheque has been defined under section 6 as the bill of exchange which is payable on demand by the applicant.

A Cheque bounce is when there is dishonour of payments by the drawer when the cheque is submitted for payment by the drawee. The dishonour can be due to various reasons, some are clear overwriting on the cheque, insufficiency of the amount in the account used for payment, attestations on different documents do not match etc.

Institution of a Criminal Suit for a Cheque Bounce Case
Under Section 138 of Negotiable Instruments Act of 1881: It provides for situations when there is dishonour of the cheque. In India, it is a criminal offence but both criminal and civil proceedings can be instituted by the aggrieved party against the accused.

Under Section 420 of Indian Penal Code of 1860: It provides for situations when the aggrieved can prove that the bouncing of cheque is due to the accused. There is an existence of two essential elements when such a case is filed i.e. intention to cheat and dishonesty.

Key ingredients under Section 138 of Negotiable Instruments Act of 1881:
• Drawer has issued a cheque for payment in favor of drawee for payment which discharges debt or other liability.
• Cheque presented to the bank within a period of three months from the date of issuance.
• Bank has returned the cheque unpaid.
• The payee makes a demand for the payment by issuing a notice to the drawer within fifteen (15) days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.
• The drawer fails to make payment to the payee within fifteen (15) days of the receipt of the legal notice issued by the complainant.

In the case of Laxmi Dychem vs. State of Gujarat and Ors. 13 SCC 375 (2012) the Hon’ble Supreme Court clarified that only insufficiency of funds cannot be the sole reason for dishonour of cheques. Under section 138, the expression “amount of money standing to the credit of that account is insufficient” is the genus and the other reasons that comes under the purview of bouncing of cheques are the species of the such as account closed, payment stopped etc and would be liable under the Negotiable Instruments Act of 1881.

Legal measures that shall be taken by the drawee at the time of cheque bounce:
A Legal Demand Notice: The drawee must send a legal notice within the period of 30 days from the date of cheque that was presented and returned by the bank to the drawee. The notice should mention that if the amount is not paid within the period of 15 days after receiving the notice, legal action shall be instituted as laid down by the provisions of Negotiable Instruments Act of 1881.

Filing a Complaint: If the drawer fails or refuses to pay the amount within the 15 days of receiving the notice, the drawee can file a complaint in court within the period of 30 days. The complaint should be filed in a court which has jurisdiction. The drawee must have all the important documents like photocopy of the returned cheque, letter of oath, copy of legal notice and the acknowledgment receipts. It is important to know where the complaint can be filed. The drawee can register a complaint in a court within the local limits of jurisdiction according to the Negotiable Instruments Act (Amendments) of 2015 in the following places:

  1. Place where branch of bank is situated
  2. Place where payee or holder maintains an account.
    Payment of court fees along with filing of complaint, it varies as per the amount of the cheque against which the complaint has to be registered.

Amendment of complaint is permissible: In the case of S.R. Sukumar vs. S.Sunaad Raghuram AIR 2015 SC 2757 the Hon’ble Supreme Court held that any amendment that is needed to be done will not be held against the party. Notwithstanding the fact that there is no enabling provision for entertaining such an amendment, the court will allow such changes to be made.

Court issues a Summon: After the complaint being filed by the payee, court issue summons to the accused person who owes the money to the person who filed the complaint.

Evidence attached in the cheque bounce case: The Complainant with the help of his/her lawyer puts forward all the evidence like original bounced Cheque, Cheque Return Memo, Record of legal notice to accused and all other relevant documents in support of the case to prove that accused is under a legal obligation to pay the stated amount as mentioned in the cheque which is bounced.

Punishment and Penalty provision: If the drawer is found guilty, the accused can be punished with a monetary penalty which may be double of the amount of cheque or imprisonment up to 2 years or both.

The aggrieved party also has an alternate option to file a summer suit under Order-37 of Code of Civil Procedure of 1908 to recover the amount from the accused. The civil suit will help recover the amount due as well as the cost of litigation that the aggrieved had to borne during the litigation of the same. A summary suit or the summary procedure is provided under Code of Civil Procedure of 1908, where the right to defend himself is not given to the accused unless the court approves of such defence.
Authored By: Adv. Anant Sharma & Shivangi Ghosh

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