Types of Cheque Bounce
- When a party doesn’t fulfill their duties on time.
- Example: A vendor fails to deliver goods on the agreed date.
- When a party fails to deliver a significant part of what was promised.
- Example: Buying a smartphone online and not receiving all the promised accessories.
- When most of the contract is fulfilled, but a small part is left incomplete.
- Example: An architect designs a house but misses a minor detail.
- When a party indicates they won’t be able to fulfill the contract before the deadline.
- Example: A service promised for Tuesday morning is now delayed by several days.
Frequently Asked Questions
What is a cheque bounce?
A cheque bounce occurs when a bank refuses to honor a cheque due to insufficient funds, expired validity, or other reasons.
Why does a cheque bounce?
Common reasons include insufficient funds, expired validity, stop payment instructions, damaged cheque, signature mismatch, and amount mismatch.
What is the first step after a cheque bounces?
Send a demand notice to the cheque issuer within 30 days of receiving the cheque return memo.
How long does the issuer have to settle the payment after receiving the notice?
The issuer has 15 days to settle the payment.
What happens if the issuer does not settle the payment within 15 days?
You can file a criminal complaint in court within 30 days of the 15-day period’s expiry.
What documents are needed to file a cheque bounce case?
Legal notice copy, original bounced cheque, cheque return memo, and proof of notice delivery.
What are the bank charges for cheque bounce?
Charges vary by bank. For example, SBI charges ₹150-₹500 + GST depending on the amount and reason.
What are the penalties under the Negotiable Instruments Act, 1881 for cheque bounce?
Offenders can face imprisonment for up to two years, a fine up to twice the cheque amount, or both.
Can a court ignore delays in filing a cheque bounce case?
Yes, courts may ignore delays if sufficient cause is shown.
Can I file a civil suit for cheque bounce?
Yes, you can file a civil suit for recovery of the cheque amount, including costs and lost interest.