Cheque Bounce Lawyer

Let’s clear this first, Who is drawer, Payee and drawee in Cheque? Ans: The bank that cashes your check is the drawee, the person who wrote you the check is the drawer, and you are the payee.

Understanding Cheque Bounce and the Role of a Cheque Bounce Lawyer

Cheque bounce, also known as dishonour of cheque, is a common financial issue that occurs when a cheque is presented for payment but is not honored by the bank due to various reasons such as insufficient funds, signature mismatch, or a closed account. This can lead to legal consequences for the drawer of the cheque. In such cases, a cheque bounce lawyer plays a crucial role in navigating the legal process and ensuring justice for the affected parties.

 Reasons for Cheque Bounce

A cheque may bounce for several reasons, including:

1. Insufficient Funds: The account does not have enough balance to cover the cheque amount.

2. Signature Mismatch: The signature on the cheque does not match the signature on record.

3. Account Closure: The account has been closed before the cheque is presented.

4. Incorrect Date: The cheque is post-dated or bears an incorrect date.

5. Mutilation: The cheque is torn or damaged.

6. Overwriting: There are alterations on the cheque without the drawer's authentication.

Legal Provisions and Penalties

In India, cheque bounce cases are governed by the Negotiable Instruments Act, 1881, particularly under Section 138. This section lays down the penalties and legal recourse available to the payee in the event of a bounced cheque, and highlights the importance of sending a legal notice. The penalties can include imprisonment for up to two years, a monetary penalty, or both.

Steps to Handle a Cheque Bounce Case

1.Receiving the Cheque Return Memo:

When a cheque bounces, the bank issues a 'Cheque Return Memo' stating the reason for non-payment.

2. Issuing  a Demand Notice:

The payee must send a written demand notice to the drawer within 30 days from the receipt of the Cheque Return Memo, demanding payment of the cheque amount. This notice serves as an official communication that the cheque has bounced.

3. Waiting Period:

 After sending the cheque bounce notice, the drawer is given 15 days to make the payment.

4. Filing a Complaint:

 If the drawer fails to make the payment within the stipulated time, the payee can file a criminal complaint under Section 138 of the Negotiable Instruments Act in the magistrate's court within one month from the expiry of the 15-day period.

5. Court Proceedings:

The court will issue a summons to the drawer, and the trial will commence. Both parties will present their evidence and arguments.

6. Judgment:

Based on the evidence and arguments, the court will deliver its judgment, which may include penalties such as imprisonment, a fine, or compensation to the payee. Sometimes, the case might end up in the high court if complexities arise.

 Role of a Cheque Bounce Lawyer

A cheque bounce lawyer specializes in handling cases related to dishonour of cheques issued. Their roles and responsibilities include:

1. Legal Consultation: Providing legal advice to the payee on the merits of the case and the appropriate legal recourse, including whether to issue a cheque bounce notice.

2. Drafting and Sending Notice: Preparing and sending the demand notice to the drawer as per legal requirements.

3. Filing the Complaint: Drafting and filing the criminal complaint in the appropriate court within the stipulated time frame.

4. Representation in Court: Representing the payee in court, presenting evidence, cross-examining witnesses, and making legal arguments.

5. Negotiation and Settlement: Engaging in negotiations with the drawer for an out-of-court settlement, if feasible, to expedite the resolution process.

6. Ensuring Compliance: Ensuring that the court's judgment is enforced and the payee receives the due compensation or penalty.

Importance of Hiring a Cheque Bounce Lawyer

Handling a cheque bounce case requires a thorough understanding of the legal provisions and procedural requirements. A cheque bounce lawyer brings expertise and experience to navigate the complexities of such cases effectively. Hiring the best cheque bounce lawyers can be a crucial step in securing a favorable outcome. They ensure that all legal formalities are complied with, deadlines are met, and the payee's rights are protected. Best cheque bounce lawyers can be invaluable in such scenarios.

In conclusion, cheque bounce cases can be financially and legally taxing for the parties involved. It is advisable to find lawyers for bounced cheque cases to mitigate the challenges. Engaging a competent cheque bounce lawyer can significantly ease the process, ensuring that justice is served and financial losses are minimized. Whether you are a payee seeking to recover your dues or a drawer facing legal action, a skilled cheque bounce lawyer is essential to guide you through the legal intricacies and secure a favorable outcome.

There has been some debate regarding the area of jurisdiction of a cheque bounce case. But in the case of Dashrath Rup Singh vs State of Maharashtra, Supreme Court rulings have clarified the issue. The cheque bounce case should be filed in the area where the cheque was submitted by you, to be honoured. If the cheque has been dishonored and the bank finds out that there have been material alterations on the cheque, then you are not entitled to file a cheque bounce case eg: someone tried to change the name of the payee, amount, date etc. Sometimes cheques are given as a method for security, however after completion of business transaction other party tries to fraudulently encash the cheque and files a false case in the court. You can defend that by showing that there was no legal debt at the time of issuance.

Following documents are required for filing a case and we have cheque bounce lawyers in delhi who can assist you in this regard.

1. Original cheque and return memo (Dishonor due to comments “Account closed”, “Refer to the drawer” or “Stop payment” of the check may be considered to be protected by the supply included in Area 138.)
2. Copy of notice and original postal receipts.
3. Evidence affidavit.

Civil Liability: Payee may initiate recovery procedure under order 37 of the code of civil procedure, 1908. It’s also called Money recovery Suit. This could fine twice the amount of Dishonored Cheque as per Section 138 of NIA. If payee files a suit under Order 37 of Code of Civil Procedure, 1908 and gets a judgement in his/her favor then there can be additional impact of costs, interest etc.

Criminal Liability: Here presence of Mens Rea isnt required. Mens Rea is the whole essence of crime. Without having an intention to act in a manner that it causes harm to person or property, then in front of law it is not a crime. It can be prosecuted under Section 417 and 420 of IPC. Punishment under section 138 of NIA is 2 years of imprisonment or fine double the value of cheque or both. This is compoundable, bailable and non-cognizable offence.

Get in touch if you have any questions feel free to contact us, or fill out our contact us form.