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Dishonour of Cheque
In India, the law on dishonored checks is governed by Section 138 of the Negotiable Instruments Act of 1881. The payee or holder of a dishonored check can file a complaint against the drawer under this section. Here are some things to know about the process:
Notice: The bank must immediately give a "cheque return memo" to the drawer if the check is dishonored.
Demand notice: The payee must send a demand notice to the drawer within 30 days of receiving the memo
Payment: The drawer must make payment within 15 days of receiving the demand notice.
Filing a complaint: The payee can file a complaint within 30 days of the 15-day period ending. The court may condone a delay in filing the complaint if sufficient cause is shown.
Liability: Only the drawer of the dishonoured check is liable and can be prosecuted.
Offence: Dishonour of a check is a non-cognizable and bailable offense. This means that a police officer cannot arrest the accused without an arrest warrant.
Punishment: The punishment for dishonouring a check can include imprisonment for up to one year, a fine that is double the amount of the check, or both.
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