Cheques are every common in almost all transaction such as payment of bills, fees, salary etc. a large number of cheques are processed in the bank on daily basis. Cheques are usually issued inorder to secure the proof of payment. Generally, it is recommended to issue only crossed “Account Payee Only” cheques to avoid its misuse. The only payee can negotiate crossed and account payee cheque. In order to draw payment cheques are deposited in payee’s bank account. The drawer is the author of the cheque and the person who favors the cheque is called payee. Nowadays cheque bounce is common and is considered as the criminal offence. Cheque bounce is occurred when the amount is not paid because of some reason.
The payee has to send the notice within 30 days from the date of receiving a memo from the bank. The notice should contain the amount on the cheque to be paid to the payee. If the issuer fails to make payment the payee has right to file a criminal case under section 138. However, cheque dishonor complaint should be registered in a magistrate’s court within a month of the expiry of the notice period.
Requirement needed to move legally against cheques dishonor. The cheque should have been drawn by the drawer on an account kept by him. The cheque should have been bounced because of insufficient funds in the drawer's account. The cheque is issued for discharge of a debt or legal liability. Punishment & penalty for cheque dishonor.
The punishment prescribed for such an offense is either fine which may extend to twice the amount of the cheque or imprisonment for a term which may be extended to two years or both. For other information you can seek the help of lawyers in India.
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