A cheque bounce, also known as dishonour of cheque, occurs when a bank refuses to honour a cheque due to insufficient funds, signature mismatch, overwriting, or closed account. In India, cheque bounce is treated as a serious financial offence under Section 138 of the Negotiable Instruments Act, 1881.
When a cheque is dishonoured, the payee has the right to issue a legal notice to the drawer within 30 days of receiving the return memo from the bank. If the drawer fails to make the payment within 15 days of the notice, the payee can initiate criminal proceedings.
Punishment for cheque bounce may include imprisonment up to two years, monetary penalty, or both. It is crucial for businesses and individuals to maintain financial discipline and avoid cheque misuse, as these cases can affect both credibility and financial stability.
Professional legal assistance ensures proper handling of notice drafting, filing of complaint, and representation in court.
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