Cheque Bounce Case procedure comes under section 138 of the Negotiable Instruments Act, 1881. The cheque bounce case is technical offence. There are so many technicalities involved in the law. Cheque bounce case law and procedure is as under.
So, now I will explain the law of Section 138 of the Negotiable Instruments Act in simple words. It says dishonour of cheque for insufficiency of funds in the account. When any person maintains a bank account. And he draws a cheque from his account for payment of the amount of money to another person for discharge of whole or part of any debt or liability.
And when such cheque returned unpaid for the reason of insufficient funds. In that case, such a person has committed an offence u/s 138 of the Negotiable Instruments Act.
Punishment in cheque bounce case
If a person can prove the case of cheque bounce. In that case, the court may pronounce punishment of imprisonment for a term that may extend to two years. Or with a fine which may extend to double the amount of cheque or with.
The procedure of cheque bounce case law and procedure -When to present the cheque
The cheque has to present within six months from the date the cheque has drawn. But now the law has changed. Because the validity of the cheque has reduced to three months. So, now the cheque has to present in the bank within three months from the date the cheque has drawn.
When to send the demand notice
The payee or holder in the due course of the cheque has to send a demand notice for the payment of the said cheque amount. The said demand notice has to sent within 3o days from the receipt of information from the bank regarding return cheque unpaid.
When to file the cheque bounce case
When the drawer received the notice and he fails to make payment of the cheque amount within 15 from the receipt of the notice. And payee or holder in due course shall file a complaint of the cheque bounce within thirty days after completion of fifteen days period. Debt or other liability means legally enforceable liability.
How to deal with the case by the drawer (Accused)
When the drawer (Accused) came to know that the payee (Complainant) has sent the false notice. In that case, the Accused has to reply to the notice immediately. He has to mention the facts of the case and the complainant has misused the cheque.
And even though, the payee or holder in due course (the complainant) has filed a case of cheque bounce against the drawer, in that case, the first court verifies the complainant on oath. And if the complainant full fill all required conditions of section 138 of the N I Act, then the court issue summons to the Accused.
After receiving the summons the accused has to appear before the Hon’ble Court. And he has to take bail by depositing a certain amount in the court. Then court shall record the plea of Accused. While recording the plea court ask to accused whether he pleads guilty or not. If the accused not pleaded guilty then the case shall proceed to trial.
Cheque bounce case law and procedure — Rebuttal of presumptions
It is presumed under the law that when the complainant receives the cheque that is for the discharge whole or part of any debt or other liability. But the section 139 of the Negotiable Instrument Act gives the accused a chance to rebut the presumption. So during the cross-examination of the Complainant, the accused has to bring facts on the record.
How to cross-examine the complainant
Accused shall keep in mind the following points during the cross-examination of the Complainant.
- First of all the accused has to check whether the complainant has fulfilled all the conditions.
- The accused has to see whether the disputed cheque has issued by the drawer for discharge of legally enforceable debt.
- It needs to see whether the disputed cheque was issued with signature only and other contents were blank.
- Importantly accused has to check the transaction or agreement between the accused and the complainant is legal in the eyes of law.
- Whether the complainant is capable to provide any hand loan if the transaction is for a hand loan.
- The accused has to check the complainant has shown the transaction in his income tax return.
- It is also important and needs to check that Complainant has the proper authority to file a complaint.
- Is there any documentary evidence to prove the transaction or agreement?
- If money is given by way of a loan, then it is necessary to check whether the complainant is having a proper money lending license.
Amendment in Negotiable Instrument Act (cheque bounce)
The Negotiable Instrument Act has recently amended and it is called The Negotiable Instrument (Amendment) Act 2018. Section 143A has inserted by the new amendment. And as per this section, after framing of charge accused shall pay an interim compensation of not more than 20% of the cheque amount to the complainant. And section 148 has inserted. As per section 148, in an appeal filed against conviction by the Accused, the appellate court may direct the accused to deposit a minimum of 20% of the fine or compensation filed appeal against the conviction. (cheque bounce)
So, here I have explained some important aspects of the negotiable instrument act.
Here is the full act of the negotiable instrument act https://indiankanoon.org/doc/1132672/