Bouncing of a cheque invites criminal prosecution under section 138 of Negotiable Instruments Act. The Act states that when a person issues a cheque to another person to be encashed. The concerned cheque is issued towards a ‘debt’ payment or liability which is returned unpaid for insufficient of funds, the person who is issuing the cheque without having the required amount is treated as offender as per the Indian Govt. Section 138 presupposes three conditions for prosecution of an offence they are:
If the above conditions are satisfied the holder can take legal steps against the drawer of the bounced cheque.
The following special points need to be considered:
The holder can drop the cheque more than one time. However, there cannot be multiple prosecutions for various times the cheque is returned and the prosecution is only for the last time the cheque bounced. No court shall take cognizance of any offence punishable under section 138 except upon a writing complaint that is made by the payee or the holder in due course of the cheque.
In case of a company or firm, the person who was in charge of the company is liable to be prosecuted. In other words, officers, directors and secretary of the company may be liable. Contact cheque bounce lawyers in delhi and we will help you.
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