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manreet uppal   19 October 2021

138 ni act

Respected,

Can a complaint file if two Times presented the cheque and bounced with account closed

 



 5 Replies

Pradipta Nath (Advocate)     19 October 2021

It is maintainable. See the judgement of the Supreme Court: RAHUL SUDHAKAR ANANTWAR vs  SHIVKUMAR KANHIYALAL SHRIVASTAV.

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Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     20 October 2021

 It was held that second and successive presentation of a cheque is legally permissible as long as such presentation is within the period of 6 months or the validity of the cheque, whichever is earlier.

1 Like

manreet uppal   20 October 2021

Thanks 

minakshi bindhani   20 October 2021

As per your concern
A cheque bounce is an offence under Section 138 of the Negotiable Instruments Act, 1881 (“Act”) punishable with a fine which can extend to twice the amount of the cheque or imprisonment for a term not more than two years or both. When the payee presents a cheque to the bank for payment, and the cheque is returned unpaid by the bank with a memo of insufficient funds, then the cheque is said to have bounced.


If a cheque bounces due to insufficient funds in the drawer’s account, it amounts to an offence under the Act. The bank must reject the cheque presented for payment with a return memo stating the reason as insufficient funds. In such a case, the payee of the cheque can issue a cheque bounce notice to the drawer demanding to pay the cheque amount.




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 CONSEQUENCES OF CHEQUE BOUNCE NOTICE

Consequences of Cheque Bounce Notice

Updated on:  Oct 12, 2021 - 01:42:30 PM
13 min read



A cheque bounce is an offence under Section 138 of the Negotiable Instruments Act, 1881 (“Act”) punishable with a fine which can extend to twice the amount of the cheque or imprisonment for a term not more than two years or both. When the payee presents a cheque to the bank for payment, and the cheque is returned unpaid by the bank with a memo of insufficient funds, then the cheque is said to have bounced.
A cheque bounce can occur due to several reasons, but if a cheque bounces due to insufficient funds in the drawer’s account, it amounts to an offence under the Act. The bank must reject the cheque presented for payment with a return memo stating the reason as insufficient funds. In such a case, the payee of the cheque can issue a cheque bounce notice to the drawer demanding to pay the cheque amount.

Table of contents

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Circumstances of Cheque Bounce

Remedies Against Cheque Bounce

Resubmission of cheque 

Cheque Bounce Notice under Section 138 of the Negotiable Instruments Act

Issuance of Cheque Bounce Notice

Procedure to Follow After Issuance of a Cheque Bounce Notice

Jurisdiction of Magistrate for Filing Cheque Bounce Suit

Process of Cheque Bounce Suit

Circumstances of Cheque Bounce

The various situations that result in cheque bounce are as follows:

Insufficient account balance – If there is not enough balance in the drawer’s account to make the payment of the cheque, the bank will reject and return the cheque to the payee with a memo stating insufficient funds to pay the cheque amount.

Expired validity of cheque – Once the drawer issues the cheque, it must be presented for payment within three months. If it is not presented to the bank within three months, the cheque expires. If the expired cheque is presented to the bank, it bounces.  

Overwriting – If the signature of the drawer or cheque amount or any other statement has been overwritten on the cheque, then the cheque bounces for overwriting.

Damaged cheque – If a cheque is damaged or disfigured and the details are not visible or have marks or stains, the cheque will bounce.

Signature mismatch – If the drawer’s signature is unclear or absent or does not match the one in the bank’s data, then the cheque will bounce.

Mismatch of amounts or digits – If the cheque amount mentioned in words and figures does not match, then the cheque will bounce.

Remedies Against Cheque Bounce

Resubmission of cheque 

When the cheque bounces due to overwriting, mismatch of signature, mismatch of the figures and words of the cheque amount or damaged cheque, the payee can ask the drawer to submit another cheque rectifying the mistake. If the drawer does not agree to submit another cheque, then the payee can initiate civil action against the drawer to pay the cheque amount due to him and not for the cheque bounce.

Cheque Bounce Notice under Section 138 of the Negotiable Instruments Act

A cheque bounce notice is issued under Section 138 of the Negotiable Instruments Act when a cheque bounces due to insufficient funds in the drawers’ account for making the payment of the cheque amount. If the cheque bounces for any other reason other than insufficient funds, the cheque bounce notice cannot be issued, and the payee can demand resubmission of the cheque.
 
Notice:

When the cheque bounces due to an insufficient amount, the first step is to demand the payment of the amount by issuing a cheque bounce notice in writing by post under the Negotiable Instruments Act.

The payee can issue a cheque bounce notice within 30 days of an intimation sent by the bank along with the bounced cheque stating that the bank cannot make the cheque payment due to an insufficient amount. 

After issuance of the cheque bounce notice, the payee must give the drawer 15 days time period from the receipt of the cheque bounce notice to pay the cheque amount.

If the drawer does not pay the cheque amount even after the expiry of 15 days time period, then legal action can be initiated by the payee against the drawer within 30 days of the expiry of 15 days. 

After the expiry of 15 days of issuing the cheque bounce notice, the payee can initiate legal action against the drawer. The payee should register a complaint under Section 138 of the Act. Under Section 138 of the Act, the offence of cheque bounce is a criminal offence for which the payee can initiate a criminal suit. The payee must file the complaint against the cheque bounce before the Magistrate within 30 days of the expiry of 15 days of the issuance of the cheque bounce notice.

A civil suit can also be instituted against the drawer for payment of the cheque amount. In the case of the institution of a civil suit, the payee cannot issue a cheque bounce notice. The payee can only issue legal notice for recovery of the amount.

Under Order 37 of CPC, a summary suit availed of only in recovery matters be its promissory notes, bills of exchange and cheques.

Since a summary suit is a civil proceeding that does not have the force of a criminal charge.

Hope it helps
Regards
Minakshi Bindhani
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Dr J C Vashista (Lawyer)     21 October 2021

You may present the cheque any number of times within its validity i.e., 3 months of drawing the cheque.

Account closed case attracts the provision of section 138 of the Negotiable Instruments Act, 1881. 

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