What Are The Legal Steps For Cheque Bounce?

What are the legal steps if cheque is dishonoured ?

Cases of cheque bounce are common these days. The Negotiable Instruments Act, 1881 is applicable for the cases of dishonour of cheque. According to Section 138 of the Act, the dishonour of cheque is a criminal offence and is punishable by imprisonment up to two years or with monetary penalty or with both.

If you received payment for some work you did, and the cheque got bounced, what are your rights?
Time is an essence in a cheque bouncing case. The moment a cheque bounces with the endorsement “Insufficient Funds”, go to a lawyer and send the person a legal notice demanding your money. This has to be done within 30 days of bouncing of the cheque.

Once that person receives your notice, he is required by law to pay you your money within the next 15 days. His failure to do so, gives you a right to file a criminal case against him for cheque bouncing.

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