Cheque Bounce Rule : You must have heard about a cheque. In fact, people who deal with banks are quite familiar with it. They also know that nowadays, money transactions are usually done through online modes such as UPI and other digital platforms. However, using cheques for withdrawing or transferring money has been a long-standing method.
But there’s one thing many people don’t know — if a cheque bounces or gets dishonoured, a penalty has to be paid, and it can even affect your CIBIL history. In more serious cases, it may even lead to legal punishment. The penalty imposed for a bounced cheque depends on the bank and the amount mentioned on the cheque.
What is Cheque Bounce?
When a cheque is deposited in the bank for payment but is rejected due to insufficient funds, signature mismatch, or other reasons, it is called a cheque bounce. The most common reason is the lack of sufficient balance in the account. When a cheque bounces, the bank imposes a fine, and the amount is deducted from the account holder. Cheque bounce can also be considered a legal offence.
In case a cheque bounces, the creditor (the person expecting the payment) must inform the debtor (the person who issued the cheque). The debtor then has 30 days to make the payment. If the payment is not made within this period, a legal notice can be sent. If the person fails to respond within 15 days of receiving the notice, a case can be filed under Section 138 of the Negotiable Instruments Act, 1881.
Legal Punishment for Cheque Bounce – Up to Two Years of Imprisonment
Bouncing a cheque is a punishable offence. When a cheque is dishonoured, a case can be registered under Section 138 of the Negotiable Instruments Act, 1881. If found guilty, the offender may face imprisonment of up to two years, a fine up to twice the cheque amount, or both. Additionally, the debtor may be required to pay the cheque amount along with interest.
The case will be filed in the jurisdiction where the complainant (the payee) resides. The penalty for cheque bounce depends on the bank’s rules. For example:
- ₹350 is charged if one cheque is returned in a month.
- ₹750 is charged if two cheques are returned in the same month for financial reasons.
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₹50 is charged if the cheque is returned for non-financial reasons (such as signature mismatch or technical errors).
Thus, cheque bounce not only causes financial loss but also leads to legal consequences, making it essential to maintain sufficient funds before issuing a cheque.
