As the number of cheque transactions has increased, so has the number of cheque-related crimes or dishonesty. A cheque bounce or dishonour of cheque occurs when there is no money or insufficient funds in an account and someone writes a cheque that the bank does not pay. Even if the cheque is bounced intentionally or unintentionally, it is still a crime in the eyes of the law. A law has been enacted to control and manage check-related crimes. The check must bounce three times. If you come across a cheque bounce case, you should be aware of the procedure for filing a complaint.
The Most Common Causes of a Cheque Bounce
There can be a variety of reasons for a cheque to be dishonored or a cheque to bounce. Let us take a look at a few of them:
Insufficient Balance in the Account
One of the most common causes of cheque bounces is a lack of funds in the drawer’s account. For example, if you receive a cheque from someone whose account balance is less than the amount stated on the cheque, the Bank will not initiate the transaction. It will now obstruct payment and dishonour the cheque.
A problem with the cheque’s date
The cheque’s date is extremely important. Any inaccuracy or illegibility in the date can result in a bounced cheque.
Each drawer must ensure that his signature on the cheque matches the signature in the bank records, or he will face serious consequences.
Amount Difference in Numbers and Words
If the payable amount in numbers and words differs, the bank will return the cheque. Furthermore, the same action is taken if the amount in the words section contains some numbers or vice versa.
Resetting or Scrawling on the Cheque
What is the legal process for filing a lawsuit?
Is it necessary to file a FIR with the police?
If a cheque is issued when there is no money in the account, the cheque must be bounced three times, and the bounce letter must be attached to the written FIR application and filed as soon as possible at the nearest police station.
The Government Attorney launches an investigation
When a petition or complaint is filed with the nearest police station, the case is assigned to a government attorney. The government’s attorney will draft a charge sheet and present it to the Supreme Court.
The court then issues the procedure: After you file a cheque bounce case, the government attorney registers the case with the high court. Before granting bail, the high court hears the complainant’s arguments.
What is the Penalty?
A FIR for criminal charges may be filed under the Banking Offence and Punishment Act 2064 (2008). Section 15(1) of the Banking Offence and Punishment Act of 2064(2008) mentions a fine and attaches penalties with a fine and three months in prison.
A lawsuit must be filed with the court under civil law.
Under the Negotiable Instruments Act 2034 (1977), a cheque bounce case must be filed with the relevant district court under civil case within 5 years if a cheque is bounced.
A person who writes a cheque faces three months in prison or a NPR 3,000 fine, or both.
If the cheque is dishonoured when presented to the bank, she or he is obligated to pay the amount stated in the cheque as well as interest. The bank does not pay a cheque that is intentionally issued or provided to a person who knows there are no deposits in the account.
The Supreme Court provides important clarification and establishes a principle in cases of cheque bounce. If the cheque bounce case is civil in nature, it is filed as a civil case.
Nepal Government Vs. Gita Stapit N.K. P Part 59 Number 11 Decision Number 9899.
The defendant Gita Stapit, a Jyoti Bikash Bank account holder, issued a cheque for an amount greater than what she had in the bank, and the cheque was dishonored. The facts are undeniably true.
According to Section 107(a) of the Negotiable Instruments Act of 2034 (1977), whoever issues such cheque is entitled to pay the amount stated in the cheque plus interest, and the individual who issues the cheque is penalized, and the individual who is the victim of such actions is entitled to payment plus interest from such individual.
Section 107(a) of the Negotiable Instruments Act 2034 (1977) governs the defendant’s action. No relief is provided to victims of banking-related offence under the Banking Offence and Punishment Act of 2064 (2008).
The Civil Code’s fraud provisions apply to similar types of cheque dishonor cases. If the defendant is punished for the same wrongful act in another case in the name of providing relief to the victim, the principle of double jeopardy is violated.
Please do not hesitate to contact us if you require assistance with a cheque bounce case.
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.