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A cheque bounce case frequently commences with an account holder writing a cheque to the payee, which is subsequently sent to the bank for approval. However, there can be a number of reasons why the cheque bounces, notably insufficient funds, resulting in problems for both the payer and the recipient of the cheque. After the bank’s notification of the account’s low balance, the account holder could become subject to legal penalties.
Cheque Bounce: Reasons
A cheque may bounce for a number of reasons, as stated in section 138 of the Negotiable Instruments Act. Let’s quickly examine it:
Cheque Bounce Penalty
The offender will be penalized for a cheque bounce case section 138 of the NI Act. Depending on what caused the bounce.
The Negotiable Instruments Act of 1881 makes it illegal to dishonoured a cheque due to insufficient money in the payer’s account. If a cheque is written on a bank account that is not adequately funded, the payer may be punished. The payee may either allow the person who made the payment to reissue a cheque or decide to take legal action against the payer within a period of three months after the first payment was made.
If the payer issues a cheque that is returned unpaid, they could spend a maximum of two years in jail.
In addition, banks impose penalties for cheque dishonouring. Bank to bank variations exist in the penalty. Various banks may impose various penalty rates depending on the amount for which a cheque is returned unpaid.
Cheque Bounce Case: Procedure to be Followed
By pursuing the appropriate legal actions in accordance with Section 138 of the Negotiable Instruments Act, a lawyer for cheque bounces can assist you in recouping the money plus interest. Before taking any further action, an experienced cheque bounce lawyer can assist you by serving the drawer with a statutory notice. When they file the petition, they may represent you as the pleader under a Power of Attorney (POA).
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