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Harsha Vardhana R (Project Manager)     21 January 2015

Cheque bounce - stop payment notice by account holder

Dear Experts,


I have an hypothetical interesting case of cheque bounce.


Suppose 'Person A' receives a post dated cheque from 'Person B'. If 'Person A' presents it and if it bounces, he/she can file a cheque bounce case.


If the 'Person B' has already issued a prior instruction to his/her bank to stop payment of that particular cheque, what is the legal view? Can 'Person A' still file for a cheque bounce case?


About the fund availability of 'Person B' in that account? Does it add any twist to the case? Sufficient funds but still a prior notice to stop the payment, how do banks act?


How does banking law goes in such tricky cases? Please enlighten me.



Harsha Vardhana R


 11 Replies


If B certainly owes A the amount and Legal Proofs/evidences are there the legal process could be initiated.

1 Like

LAXMINARAYAN - Sr Advocate. ( solve problems in criminal cases. lawproblems@gmail.com)     21 January 2015

Law does now work like machine .


A matured advocate must be able to work on both sides and bring results otherwise there will be no PALKHIWALA, FALI NARIMAN OR JETHMALANI. and so on and on.


If I am the  advocate of the complainant than it is no excuse whether there was money or not in the account  since the cheque bounce it self is offense . There are many clear JUDGMENTS of the higher courts in this matter. There are also  initial traps in the case which most of the advocates of the complainant  fail to use for the benefit of their client.for sure results in the case.


If I am the advocate of the accused  than  I will get him free from the case due to very simple strategies which our group of advocates use and achieve successful results every where.


Starting from cheque, bank slips, notice , its wording, proof of sending notice, proof for its LEGAL receipt  by the accused and farming of the complaint by the complainant  has to be seen word by word very minutely and there will always be mistakes of facts, law, even names , specific details of the case and always of language . A single word here and there changes the meaning of the  whole sentence and so the complaint.


All or any of them can be skilfully used for the benefit of the accused  by passing  the main issues and get results for the accused.

1 Like

Harsha Vardhana R (Project Manager)     22 January 2015

Thank you experts,


You have given an important advise to have evidence of initial payment through a proof (like cheque, online transfer, DD etc) rather than cash. Indian need to realize the importance of these things rather than just cash and blank cheque as a safety!


Yes, the wording of the complaint. I understand that people just copy an old case and file a new one. Each word, comma etc need to revised before the official case is filed.



Harsha Vardhana R


Dear Harsha Vardhana,


There is nothing tricky in your hypothetical case, as against your perception. In fact, hypothetical cases, not being the real problem, like yours suffer with some lacunas. For example, you have not mentioned whether the post dated cheque was presented after the date of the cheque or before the due date, when it was bounced. Further mere receipt of a cheque is not relevant, the purpose of issue of cheque to extinguish any liability is relevant. Still further stop payment instructions if issued after meeting with the liability that may also not have any substantial effect on the incident of dishonout.


In nutshell, everything depends upon the merits of the case or how effective the matter is presented before the court by any party to the case.


So far as your question, "how do banks act" is concerned, the bank has to act strictly according to the instructions of the drawer, irrespective of whether how legally the drawer or the drawee are affected by such stop payment instructions and compliance thereto.

1 Like

Harsha Vardhana R (Project Manager)     02 March 2015

Dear Shri Dhringraji,


 Thank you for the clarifications. It makes the understanding better.


Practically, one needs to have a proof of a dealing (business transaction/loan) + a proof of actual lending. For that a bank transaction helps a lot rather than a cash payment.


Just a bounce doesn't help the affected drawer even if he deserves and presents before the due date.



Harsha Vardhana R


Thanks for your reply, but still my questions about lacunas remained unanswered.

1 Like

Harsha Vardhana R (Project Manager)     02 March 2015

No, fortunately nothing has happened of that sort.


Since I am new to business dealings, I would like to know about the precautions that I need, from my part. I believe an undated cheque may also be a little bit safer, if the drawee agrees!


As you say, there are multiple angles that need scrutiny



Harsha Vardhana R

Adv k . mahesh (advocate)     03 March 2015

what was the reason B has given for stop payment 

what the bank has stated in the memo issued after cheque bounce 

the above two points makes you case more strong or weak to fight in the court because court see those two accepts and will react to your case and after that only comes your lawyer presentation skills or your transactions details with B 

1 Like

Harsha Vardhana R (Project Manager)     03 March 2015

Dear Shri Mahesh,


Generally, in India, a lot of folks give dated cheques (as a surety ) to get some urgent money in cash. The lenders also take it as a absolute safety!


I was wondering if the receiver B has a cunning mind and gives a post-dated cheque (undated also), and just asks the bank to stop payment (may be due to insufficient funds) or even closes the account. What can the giver A do?


I understand that a proof of a reason for lending, proof of actual lending and the presentation of the petition etc matter a lot.



Harsha Vardhana R

Adv k . mahesh (advocate)     04 March 2015

I do agree with you in urgent time only such incident occurs without following documental evidence 

like a receipt, promissory note etc., which shows yours genunuity of lending amount to B 

to consider B may give stop payment saying so and so cheque was lost duly signature on that say in office or any other place and may instruct the bank staff to stop the cheque in case if any one presents in the bank

1 Like


Hypothetical problems have no solution. Discuss only when some proble arises in reality.

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