Cheque can be bounced for number of reason and the said thing is upto bank when to honor or dishonor the cheque that is produced before the bank some of those reason could be the signature on the cheque is different, insufficient funds, crossed cheque, mistake on the cheque and for various other reason.
Section 138 of the Negotiable instruments acts 1881 deals with the issue of the cheque bouncing. The said act describes as to what is the procedure which is to be followed when the check is bounced and the person in whose favor the check was issued wants to file a case in the court of law. Initially what use to happen, it was on the person who is filling the case to file the case where the person who has issued the check is residing or here is he is operating his day to day activity. As per amendment which was passed on 15thJune 2015, now the aggrieved person can file a case in the court having jurisdiction over the bank branch where the said cheque was bounced.
Generally when a check is bounced a person fears that it will insure huge cost in recovering the said money and often hires a advocate who usual charge huge sum, which often crosses the amount in issue and few years back this was known as ‘boom of 138’, but things are quite different yet as now the client usually agrees to pay a lump sum amount at the end of the case.
Laws related to the cheque bouncing case are negotiable instruments act 1881, contract act 1872 and specific relief act which are governed in accordance with code of civil procedure 1908. The procedure that is too followed in cheque bouncing case is as follows:-
- The aggrieved party serves a notice on the drawer.
- Demand notice should be sent within 30 days from the date when the cheque was bounced.
- Demand notice should give 15 days’ time to the drawer to return the due.
- If no reply is received form the drawers end. Civil suit under s.138 of N.I. Act 1881 should be filled.
Generally people file a simple civil suit under Section 138 of N.I. Act 1881 which often takes time. In the opinion of the author they should file an accompanying application under Order XXXIX which talks about summary proceeding. This application would help the aggrieved party to get the said amount back within a reasonable period as now their would be an obligation on the court to dispose of the case within a certain time frame.
Punishment prescribed for such an offence is fine which may extend to twice the amount of the cheque or imprisonment for a term which may be up to two years or both.
Court fee or the stamp duty that is to be paid while filling the case under the negotiable instruments act 1881 id subjected to quantum of amount that is due. The following tabulation shows the same:-
|Amount on cheque||Court fee|
|Rs. 0 to Rs. 50,000/-||Rs. 200|
|Rs. 50,000/- to Rs. 2,00,000/-||Rs. 500|
|Above Rs. 2,00,000/-||Rs. 1000|
While filing the case mere submission of the plaint is not enough you have to submit various other documents to support your claim and those documents should include the complaint, affidavit, Copy of the demand notice, copy of the check that was returned and copy of the post receipts.
India is a developing country, but majority of the laws that are used by our country were incorporated post-independence and we still tend to use the same and even the laws that we tend to say that we created after post-independence era are nothing but improvisation of the laws that are functioning like a well-oiled gear in other countries. That being said India is still making amends as an when necessary and the traces of the same could be seen in the amendment that wa brought in the year 2015 in the Negotiable Instruments Act 1881.
Author: This blog is written by Mr. Devashish Jain, student of College of Legal Studies, UPES, a passionate blogger & intern at Aapka Consultant.