This blog is for you if you have been involved in a false cheque bounce case or merely want to be aware of such events in the real world. Everything from a basic definition of a cheque and a cheque bounce to what you can do if you ever find yourself in such a situation (other than panic and stress). To comprehend a false cheque bounce, you must first fully understand what a cheque is, how it bounces, and why it bounces.
What does the term “check” mean?
Section 2 of the 2034 Negotiable Instruments Act (h) A “cheque” is a bill of exchange drawn on a particular bank and payable on demand. In the sixth edition of the Delex Black Law Dictionary, a cheque is defined as “an instrument in writing containing an unconditional order signed by the maker directing a certain banker to pay the sum of money on demand to the order of a certain person.” The cheque refers to a -Unconditional order), which requires cash to be provided to the cheque holder without any conditions. The case of UK Whistler vs Forster (1863) 14 CB 248 is a well-known and internationally recognized case in the case of the cheque.
It is stated in the aforementioned case that the general rule is undeniable that no one can transfer a better title than he himself possesses, implying that the Nemo Dat Quid non Habet principle does not apply in cheque. It is similar to money in that the principle of possession and ownership is applied without the possession and ownership being visible.
The account holder is held to a lower standard of accountability than the cheque issuer. The cheque is money, and whoever holds it has possession of it.
In civil cases, individuals can transfer possession of objects that are not theirs. It refers to the Nemo Dat Quid Non Habet principle. The preceding principle does not apply to checks.
A cheque is an important part of the financial system in many countries around the world.
A cheque is regarded as an important document that can be used for a variety of monetary transactions by an individual, company, or government. A cheque is a negotiable document used to physically transport money or to perform inter-account transfers.
When a cheque bounces
When a cheque bounces, it means that the depositing process in the bank was unsuccessful.
Cheque Bounce recognizes two types of jurisdiction. The case is filed in two ways, and the hearing is held in one of them. In the event that a check bounces, we have two options.
1. Banking Offense and Punishment Case
Section 3 C of Banking Offence and Punishment Act, 2064 (2008) states that a cheque should not be issued to anyone if the account is empty. If this type of check is issued after check bounces and 6 months have passed, a FIR can be filed.
In such a case, the Nepali government is a party to the litigation. In such a case, the accused is taken into custody and an investigation is carried out. The case is reported to the Police and a FIR is lodged.
2. Dishonoring a Check
After locating the violator’s property under section 107-a) of the Negotiable Instruments Act 2034(1977), you may freeze the property with the district court if the time period for a cheque bounce has passed.
In Nepal, under what conditions is it common practice to issue a cheque without cash to an individual?
1. Coercion / Threatening
It is now possible to detain someone by charging them with a check bounce case. There have been reports of groups receiving funds from others using coercion and intimidation to obtain cheques.
2. Dhukuti Business (similar to banking transactions within a group)
Dhukuti is a Nepali term for a transaction similar to a banking system, such as depositing money and lending within its network.
The Dhukuti business is popular among Nepali women. Dhukuti refers to the process of forming groups of people and collecting funds, and then mobilizing those funds to lend money within that network. The cheque is deposited as a guarantee in the Dhukuti business instead of cash.
We have handled cases involving women who were or are involved in the Dhukuti business.
3. Mortgage or Collateral Check
To conduct business in Nepal, it is customary to deposit a check as collateral.
We have dealt with many cases of cheque bounce where the cheques are kept as a guarantee and where the cheques are not returned after receiving money.These are carried out to extort money or harm and tarnish someone’s reputation However, some of these cheque bounce cases are false and are not genuine cases that target innocent people who end up facing legal issues because they do not know what to do.
3. How would you handle a False Cheque Bounce Case?
In such cases, the victim need not be concerned because it is a false accusation that is easily proven with valid documents that there was sufficient balance or fund in the issuer’s bank account to ensure that the cheque did not bounce.
Some important things to do if a forged check bounces
a. Collecting all relevant documents:
When a person is falsely accused, the wisest and smartest course of action is to gather evidence proving that he is guilty of the charge leveled against him.
Similarly, in this case, I’m gathering the evidence I’ll need to prove my innocence. You must keep a record of the voucher and collect the voucher of the money deposited in the bank if you issued a cheque instead of the money that was supposed to be given, and the amount issued in the cheque has already been given to the appropriate individual.
• To learn more about the cheque dishonour, contact the bank:
• If your check bounces, the bank will notify you of the problem.
• You must then contact them to confirm whether or not it happened and, if so, under what circumstances.
• Engage the services of an attorney and respond to the bank’s legal notice:
• In a cheque bounce case, the individual may be arrested, which is a disgrace for you; therefore, you must hire an experienced attorney as soon as possible.
• You should speak with a lawyer who specializes in check bounce cases.
b. Submission of a counter-case:
You have the legal right to file a counter-civil case against the individual who filed a false cheque bounce against you. You have the right to seek restitution for the false accusation. You may file a complaint in court under Criminal Code Act 2074 for extortion/coercion for unjustified profits. You can also seek compensation for any damages or expenses incurred as a result of dealing with the bank’s fraud case. You can also sue the false accuser for defamation.
c. Documents required to file a counter-claim include:
Bills for payment
- A bill was generated when the payment was made.
- a copy of the issued cheque and a statement of bank accounts
- a bank-drawn check
- Keep 2-3 copies of each document because you may be required to submit the copies to the authorities handling the case at some point.
- The process becomes more efficient and painless when the documents are readily available.
Section 107 of the Negotiable Instruments Act of 2034
Section 107 of the Negotiable Instruments Act 2034 provides legal recourse in the event of a cheque bounce or dishonour.
False cheque bounce cases, as well as other types of fraud, are on the rise.
It is critical to be aware of the various types of fraud, particularly fraud involving monetary aspects such as cheques, because money is obviously involved in any job and work.
According to the old maxim “precaution is better than cure,” it is always a good idea to be aware of these scams so that you can easily prevent them from occurring, or in some cases, when it is not within the person’s control to prevent them, you at least know how to treat them. Knowing something allows you to help someone who is in a similar situation.
For more information, Please connect with us at +977-9745374671 or by email: firstname.lastname@example.org
Alpana Bhandari is a founding partner and CEO of Prime Legal Consultants and Research Center. She graduated from American University Washington College of Law. She specializes in corporate/arbitration and family law.