Cheque Bounce Rules: Let us tell you that if there is less money in your account than the amount deposited on the cheque, then your check will bounce and if this happens, then there is a provision of strict punishment in the law. In such a situation, let us know all the information related to check bounce in this news below.
Bouncing a Cheque is a kind of crime and before cutting the cheque, definitely check your bank account. If there is less money in your account than the amount deposited on the cheque, then your Cheque will bounce and if this happens, there is a provision of strict punishment in the law.
Let us know what are the other reasons due to which a Cheque bounces? If someone has given you a bounced cheque, what legal action can be taken against it? If your given Cheque is dishonored then how will you avoid punishment?
These are the reasons for Cheque bounce-
According to the information given on the website of HDFC Bank about dishonored cheque, a check can be dishonored or bounced due to many reasons.
The Cheque may bounce if the issuer of the check did not have sufficient funds in his/her account or the signature on the check does not match exactly.
Many times checks get dishonored if the account numbers do not match. Mutilated checks can also be dishonored by the bank.
If a check has expired or there is a problem with the date of issue, the check may bounce.
Sometimes, a check is also considered dishonored because the drawer of the check stops payment.
What will happen if the Cheque bounces –
In case of dishonor or bounce, the person issuing the check faces a penalty. It depends on the reason for the check bouncing. If the check bounces due to insufficient funds in the account of the payee, it is an offense under Section 138 of the Negotiable Instruments Act, 1881. The payee may be prosecuted for issuing a check for an account with insufficient funds. Apart from this, banks also charge a fine if the Cheque bounces. This varies from bank to bank. Banks may have different penalty slabs for issuing dishonored checks for different amounts.
How long is the punishment?
The person to whom the check has been issued may choose to prosecute the issuer of the check or allow the payee to re-issue the check within three months. For issuing dishonored cheques, the payee can face jail up to two years. However, generally the court sentences up to 6 months or up to 1 year of imprisonment. Besides, the accused is also directed to give compensation to the complainant under section 357 of the Code of Criminal Procedure. This amount of compensation can be double the check amount.
