know about Check bounce Punishment and Penalties

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Check Bounce: A Step-by-Step Guide to Legal Assistance Check Bounce
The insult of a check is a criminal offense and can be punished with imprisonment for two years or a monetary fine or both

Checks are used in all transactions, such as loan repayment, salary payments, bills, and fees. Most checks are processed and cleared by banks on a daily basis. A check is issued for the purpose of obtaining proof of payment. Nonetheless, the check remains a reliable method of payment for many people. On the other hand, it is always advisable to issue crossed “account pays only” checks to avoid its misuse.

Check a bounced Check is a negotiable tool. Crossed and account payer’s checks are not negotiable by any person other than the payer. Checks should be deposited into the payer’s bank account.

Legally, the author of the check is called the draw drawer, for whom the check is drawn, the payee is called the number and the bank directed to pay the amount is called the draw drawer.

However, check bounce cases are common these days. Sometimes checks with large sums will remain unpaid and they will be returned to the pulling bank.

The following article provides information on what you can do if your check is insulted? Here is a step-by-step guide to the legal process available to you.

If the check is Bounced

When the check is insulted, enter a non-payment reason Dravi Bank immediately returns the payer’s banker’s check return memo. The payer’s banker then gives the payer a defaulted check and memo. The holder or payer may reschedule the check within three months of the date if they feel it will be honored a second time. However, if the check issuer fails to pay, the payer has the right to legally prosecute the drawer.

The payer can only sue the defaulter/drawer for defamation of the check only if the amount referred to in the check has any defaulter liability towards the discharge of the loan or the payer.

If the check is gifted, the drawer cannot be prosecuted in such cases for the purpose of lending or for unlawful purposes.

Check bounce prosecution

The Negotiable Instruments Act, 1881 applies to cases of check defamation. This act has been amended several times since 1881.

Under Section 138 of the Act, insulting a check is a criminal offense and can result in imprisonment for up to two years or a monetary fine or both.

If the payer decides to proceed legally, then the drawer must be given an immediate refund of the check amount. Such change shall only be provided in written form.

The payee must send a notice to the drawer within 30 days from the date of receipt of the “check return memo” by the bank. The notice must be given to the payee of the check amount within 15 days from the date of receipt of the notice. If the check issuer fails to make a new payment within 30 days of receipt of the notice, the payer has the right to file a criminal complaint under section 138 of the negotiable instruments act.

However, the complaint must be registered with the Magistrate’s Court within one month after the notice expires. It is essential in this case to contact a lawyer who is well-versed and experienced in this area of practice to go further.

Check bounce Good points: conditions for legal action

Legally, certain conditions need to be met to use the provisions of Section 138.

The check must be returned or insulted as there is not enough money in the drawer account.

The drawer must pull the check in the account he has managed.

A check is issued for the discharge of a debt or legal liability.

Upon receipt of the notice, if the drawer does not pay within 15 days from the date of receipt of the notice, he commits a punishable offense under section 138 of the negotiable instruments act.

Check bounce Punishment and Penalties

Upon receipt of the complaint, along with the affidavit and associated paper passage, the court summons and listens to the matter. If found guilty, the defaulter can be punished with monetary penalties, which can be double the amount of a check or imprisonment for a period of two years or two. The Bank reserves the right to terminate and close the checkbook facility for repeated offenses of bounced checks.

If the drawer pays the check amount within 15 days from the date of receipt of the notice, the drawer will not commit any offense. Otherwise, the payee may proceed to file a complaint with the jurisdictional magistrate’s court within one month from the expiry of the 15-day period specified in the notice.

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