What Is Section 138 For Cheque Bouncing

The amount of money standing to the credit of the account of the drawer on which the cheque is drawn is insufficient to honour the cheque or.

What is section 138 for cheque bouncing. Ingredients of cheque bounce notice a cheque bounce notice should contain the following elements firstly it should. Any offence against cheque as specified under section 138 of negotiable instrument act is a criminal offence and thus the proceedings against such cheque is dealt in accordance with the summary trial provisions of code of criminal procedure 1973 crpc. Moreover according to rbi guidelines banks can stop issuing cheque book facilities to any customer booked for a bounced cheque.

The negotiable instruments act 1881 is applicable for the cases of dishonour of cheque. Section 138 of the negotiable instruments act 1881 is the primary law in the context of cheque bounce cases. Section 138 describes the above ground of insufficient funds in the account of the drawer of the cheque in the following words.

This act has been amended many times since 1881. The following is an analysis of the rights and remedies existing in cheque bounce cases resubmission of the cheque. What is section 138 for cheque bouncing.

Section 138 of the act states that any bounced cheque is punishable under the act. Section 138 casts a criminal liability punishable with imprisonment or fine or with both on a person who issues a cheque towards discharge of a debt or liability as a whole or in part and the cheque is dishonoured by the bank on presentation. Section 138 of the negotiable instruments act 1881 specifically deals with the offence of a returning of the cheque by the bank where the cheque is drawn by the person having an account in such bank had drawn the said cheque for the discharge of his legally payable debt or liability.

Section 138 of the negotiable instruments act 1881 lays down that any person found guilty of the offence of dishonour of cheque shall without prejudice to any other provisions of this act be punished with imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of the cheque or with both. Cheque bounce is governed under section 138 of the negotiable instrument act. Introduction in 1988 the negotiable instruments act 1881 was amended and section 138 was inserted making the bouncing of cheques a punishable offence amounting to a punishment of imprisonment of a term extendable to 2 years or with fine extendable to double the amount of the cheque or both.