Scribd
Upload
39 views1 page

Cheque Dishonour Penalties Guide

The Negotiable Instruments Act 1881 deals with penalties for dishonored cheques due to insufficient funds. If a cheque is deposited within 6 months but returned unpaid, the drawer is deemed to have committed an offense punishable by up to 2 years in prison or twice the cheque amount in fines or both. The payee must demand payment within 30 days of learning of the returned cheque and if the drawer does not pay within 15 days of the notice, the payee can file a criminal complaint in the relevant court.

Uploaded by

swastikmalusare
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
39 views1 page

Cheque Dishonour Penalties Guide

The Negotiable Instruments Act 1881 deals with penalties for dishonored cheques due to insufficient funds. If a cheque is deposited within 6 months but returned unpaid, the drawer is deemed to have committed an offense punishable by up to 2 years in prison or twice the cheque amount in fines or both. The payee must demand payment within 30 days of learning of the returned cheque and if the drawer does not pay within 15 days of the notice, the payee can file a criminal complaint in the relevant court.

Uploaded by

swastikmalusare
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 1

Negotiable Instruments Act 1881

Negotiable Instruments Act 1881 Provisions of S. 138 to S. 142 under The Negotiable Instruments Act 1881 deal with Penalties in case of dishonour of cheques for insufficiency of funds in the accounts. A summary of these provisions is given below:

Magistrate/Judicial Magistrate, as the case may be, having jurisdiction, within one month on the expiry of notice period and can also file a suit for recovery of the cheque amount along with the cost & interest under order XXXVII of Code of Civil Procedure 1908.

When a cheque deposited by the payee for payment within the validity period of six months, is returned by the banker unpaid on account of insufficient funds, the drawer is deemed to have committed an offence.

The offence is punishable 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.

The payee is required to demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.

An offence is committed if the drawer of such cheque fails to make the payment of the said amount of money to the payee withinfifteen days of the receipt of the said notice.

On failure of the drawer to make payment within 15 days notice period, the payee can file a criminal complaint under Section 138 of the Negotiable Instruments Act in the relevant court of Metropolitan

You might also like