Cheque Bounce

8/8/2019 Cheque Bounce

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CHEQUE

BOUNCE M. Shiva Rama Krishna10HM28


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W HAT IS A CHEQUE

A Cheque is a bill of exchange drawn upon a

specified banker & not to be expressed to be payable otherwise then on demand .


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CHARACTERISTICS

I n WritingUnconditional order

Specified banker Payment to a specified personPayable on demand

Specified sum of moneySignature


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BOUNCING OR DISHONOR OF

CHEQUE When a Cheque is presented to a bank for payment & if

it is not paid, it is said to be dishonored or "bounced".

Cheque is a negotiable instrument and bouncing of a

cheque is a Criminal Offence, which is governed by

NEGOT IABL E I NSTRUMENT A CT, 1881. I t is

punishable by up to 2 yrs of imprisonment.


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REASONS OF DISHONOUR

Signature not matchedOverwriting in chequePresented in bank after completion of six

monthA ccount closedI nsufficient funds

Payment stop by account holder

Opening balance insufficientA mount differs in words & figures


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I n case of company without seal of companyA ccount number not matched

I n case of joint accounts only one account

holder sign but both signature are required.On the death of customer On the insolvency of customer On the insanity of a customer

On Garnishee order I n case of crossed cheques


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When cheque is issued against the rules of trust.A lteration

DoubtfulOther branch chequeOD limit crossed


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SECTIONS REGARDING

DISHONOR OF CHEQUESections 138 to 142 incorporated by the

Amendment Act in 1988 provide for criminal penalties in the event of dishonor of cheques for in suffciency of funds.The drawer under the section 138, may

be punished with imprisonment up to 2years or with a fine up to twice theamount of the cheque or with both.


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IMPORTANCE OF LIMITATION PERIOD

The case must be filed within 30 days after completion of the

notice period of 15 days. For example

Notice received by defaulter on 5 November, now one needs

to wait for 15 days i.e. up to 20 November.

I f the payment is not received in these 15 days, a case can be

filed within the next 30 days i.e. before 20th Dec. I f the case is

filed on 21st Dec, it will be dismissed by the court.


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STEPS FOR GIVING NOTICE & FOR FILING A SUIT IN THE COURT:

Notice should given with in 1 month of cheque bounce Notice should be sent by Registered post with acknowledgementreceiptIt is advisable to send one copy of notice by mode of U.P.C. aswell.

A fter waiting for 15 days after the payer receives the notice, acase can be filled in court with in one monthThe following documents will be required in filing the suit:a. Complaint,

b. oath letter c. photocopy of all the documents such as cheque, memo, noticecopy, and acknowledgment receipts,


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Court Fee For a check up to 50000/- the fee is Rs 200. For acheck up to 200000/- the fees is 500/-. A bove 200000/- the fees is

1000/-.

Memo of A dvocate is essential at the time of filing a suit along

with signatures of complainant. A fter case is file by complainant in

court, all documents are cross checked by Judicial Magistrate First

Class, so original documents such as original cheque (bounced),

original memo, copy of notice, receipt of post office, receipt of

U.P.C., acknowledgement receipt, are required at the time of cross

checking. The period of limitation is also verified at this stage.

COURT PROCESS FOR FILING A CASE


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COURT PROCESS FOR FILING A CASE

Now B hatta (Process Form) is filed by the complainant or

lawyer, along with addresss of accused, and the court will

then issue a summons to accused for appearance in court on

specific date.

I f A ccused does not appear in court on the date of hearing, the

court issues a bailable warrant on the request of the

complainant

I t the accused still does not appear before the court, the court

may issue a nonbailable warrant of arrest


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MA N A SKED TO P AY RS 4.70 LA KH COMPENS A TI ON .

Taking a note of the rise in the cases of dishonor of

cheques, Delhi court has sentenced a man to one year

imprisonment and asked him to pay a compensation of Rs 4.70

lakh to his friend for failing to repay a loan. The court refused to

take a lenient view against Vijender Kumar whose post-dated

cheque to his friend in lieu of loan had bounced due to

insufficiency of funds.

CASES


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2 MEN SENTENCED I N CHEQUE B OUNCE

CA SES

Judicial Magistrate Charanjit A rora has sentenced

B albir Singh, the proprietor of Titan Knitwears here, for

one and half year imprisonment in a cheque bounce

case. The court has also directed B albir Singh to pay Rs

5 lakh, which was the cheque amount, as compensation

to the aggrieved complainant.


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I n another cheque bounce case, A dditional Chief

Judicial Magistrate K S Cheema has sentenced one year

imprisonment to Sukhdev Singh, a resident of Partap Nagar, in a cheque bounce case. A fine of Rs 1,000 has

been imposed upon him. The court has also directed

Sukhdev Singh to pay the compensation of Rs 40,000 to

the complainant.


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Cheque Bounce

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