Cheque Bounce Lawyers / Advocates in Delhi
Cheque Bounce Law in India – Provisions Under BNSS, BNS, CrPC, CPC & FAQs
A cheque bounce occurs when a bank rejects a cheque due to insufficient funds or other reasons. In India, cheque dishonor is governed under the Negotiable Instruments Act, 1881 (Now Under Bharatiya Nyaya Sanhita – BNS 2023), Bharatiya Nagarik Suraksha Sanhita (BNSS 2023), CrPC, and CPC.
1. Legal Provisions Governing Cheque Bounce in India
(A) Bharatiya Nyaya Sanhita (BNS) – Section 320 (Formerly Section 138 of NI Act, 1881)
- Cheque Bounce = Criminal Offense
- If a cheque is dishonored due to insufficient funds, account closure, or stop payment, the drawer can be punished with imprisonment up to 2 years or fine up to twice the cheque amount.
- Civil liability also applies, meaning the payee can claim the cheque amount with interest.
(B) Bharatiya Nagarik Suraksha Sanhita (BNSS) – Procedure for Filing a Case
- BNSS (Formerly CrPC 200 & 204) provides the procedure for filing and prosecuting cheque bounce cases in Magistrate Courts.
- Cognizance is taken by Magistrate Court after a legal notice is issued & payment is not made within 15 days.
(C) Civil Procedure Code (CPC) – Civil Suit for Recovery
- Apart from criminal action, the payee can file a civil suit under CPC to recover the cheque amount with interest and damages.
- A Summary Suit (Order XXXVII of CPC) can be filed for a quick recovery of money.
2. Step-by-Step Procedure to File a Cheque Bounce Case
Step 1: Send a Legal Notice to the Drawer
- Timeframe: Must be sent within 30 days of cheque dishonor.
- Notice Contents:
- Details of the cheque (number, date, amount, bank details).
- Reason for dishonor (insufficient funds, signature mismatch, etc.).
- Demand for payment within 15 days.
Step 2: Wait for 15 Days for Payment
- If the drawer fails to pay within 15 days of receiving the notice, a criminal case can be filed under BNS 320 (formerly NI Act 138).
Step 3: File a Complaint in the Magistrate Court
- Time Limit: The case must be filed within 30 days after the 15-day notice period expires.
- Required Documents:
- Original bounced cheque.
- Bank’s cheque return memo (reason for dishonor).
- Copy of legal notice & proof of delivery.
- Affidavit & supporting documents.
Step 4: Court Issues Summons to the Drawer
- The Magistrate reviews the complaint and, if satisfied, issues summons to the drawer.
- The accused must appear in court and plead guilty or defend the case.
Step 5: Evidence & Trial
- The complainant must prove that the cheque was issued for a legal debt.
- The accused can argue defenses like forgery, no legal liability, post-dated cheque, etc.
Step 6: Court Verdict & Punishment
- If found guilty, the drawer may face:
- Up to 2 years imprisonment.
- Fine up to twice the cheque amount.
- Compensation & civil liability.
- If the accused fails to appear, the court can issue a bailable warrant or even a non-bailable warrant (NBW).
3. Civil Suit for Recovery Under CPC
- If the complainant wants quick financial recovery, they can file a Summary Suit under Order XXXVII of CPC.
- This allows fast recovery without a full trial if the defendant has no strong defense.
4. FAQs on Cheque Bounce Law
1. Is Cheque bounce a criminal offense?
✅ Yes, under BNS 320 (formerly Section 138 NI Act), Cheque bounce is a criminal offense, punishable with 2 years jail or fine up to twice the cheque amount.
2. What if the drawer does not respond to the legal notice?
✅ If the drawer does not pay within 15 days, you can file a criminal case under BNS 320 in the Magistrate Court.
3. Can I file both criminal and civil cases for Cheque bounce?
✅ Yes, you can:
- File a criminal case under BNS 320 for punishment.
- File a civil suit under CPC (Order XXXVII) to recover the amount with interest.
4. What is the time limit to file a Cheque bounce case?
✅ Within 30 days after the 15-day legal notice period expires.
5. What if the drawer has no money?
✅ The court can:
- Order attachment of property.
- Issue an arrest warrant if the drawer deliberately avoids payment.
6. Can a company be prosecuted for Cheque bounce?
✅ Yes, if the Cheque was issued by a company, its Directors & Signatories can be held liable.
7. Can a post-dated cheque be prosecuted if it bounces?
✅ Yes, if issued against a legally enforceable debt.
8. Can a cheque bounce case be settled outside court?
✅ Yes, if the drawer agrees to pay before conviction, the case can be withdrawn or settled under mediation.
9. What is the punishment for cheque bounce in India?
🚨 Punishment under BNS 320 (formerly Section 138 NI Act):
- Up to 2 years jail.
- Fine up to twice the cheque amount.
10. Can a cheque bounce case be appealed?
✅ Yes, appeals can be filed in the Sessions Court & High Court.
5. Conclusion
- Cheque bounce is a serious offense under BNS 320 (formerly NI Act 138).
- Legal action includes both criminal prosecution & civil recovery suits.
- A legal notice must be sent within 30 days, and a case must be filed within the deadline.
Would you like a template for the legal notice or help with drafting a complaint? 🚀