A very reputed businessman, who had established various branches of his brand in
different cities across India was accused of false cheque bounce case by a bank.
The amount charged on him was huge as well. But he took the right decisions
quickly without wasting time thinking about how his reputation is now harmed. He
collected all the apposite documents and files and contacted a lawyer to file a
legal notice within the timespan of 30 days. And since it was a false allegation
on him, it was not much of a task for the bank to be proven guilty.
If he would not have taken the said actions quickly and did not submit the
notice on time ,i.e, within 30 days of receiving the notice from the bank, a
warrant might have been issued against him and he would also have had to
actually pay the amount for the false cheque bounce imputation. These
accusations are generally to affect the reputation of a person and bring him
down or go to jail. Although it might end up being a mistake on the banks side
or the depositor of the cheque in some cases but mostly it is to bring down the
prestige and position of the recipient of the cheque in the market.
If you also are incriminated by a false cheque bounce case or just want to be
aware about such happenings in the real world, this blog is for you. Everything
starting from a basic definition of what is a cheque and cheque bounce to what
you can do (other than panicking and stressing out ) if ever you are stuck in
such a situation. To under false cheque bounce, first you must know what is a
cheque, cheque bounce and the reasons for cheque bounce.
A Cheque is an important part of the financial system in various
countries across the world. A cheque is regarded as an important document which
can be used by an individual, company or government for transactions of various
amounts. A Cheque is also termed as a negotiable document to transport money in
a physical form or even to perform inter-account transfer.
The situation of cheque bounce means that the process of
depositing cheque in the bank has been unsuccessful.
It might be due to several
- When there are insufficient funds in the account of the issuer. It is
therefore advised to be aware and careful while issuing a cheque to ensure
that there is sufficient balance in the account of the issuer
- When the date mentioned on the cheque is disfigured or when the numbers
are scribbled or even if the date on the cheque is 3 months old from the present
date, then the bank can bounce the cheque.
- When the signature does not match with the bank’s records.
- When there is a difference in the amounts mentioned in numbers and
- When the cheque has too many stains or marks.
- When there is overwriting, scribbling or correction on a cheque.
False Cheque Bounce:
Many people still prefer making their payments through cheques because of various reasons like cheques allow to make payment to people
who do not have a bank account or few are not yet comfortable with net banking.
But cheque bounce cases are rising in today’s time and the Indians courts are
filled with these cases which are filed under Section 138 of the Negotiable
These cases are usually to extract money from someone or to harm and spoil his/
her reputation. However, some cheque bounce cases amongst these cases are false
cases and are not genuine cases which targets some innocent people who then end
up facing legal issues because they lack the knowledge on what should be done.
How would you deal with a False Cheque Bounce Case?
The victim in such cases need not worry much about it as it is a false
accusation and generally easily proved with the valid documents that there was
enough balance or fund in the bank account of the issuer which would ensure
there was no cheque bounce.
Some important measures to take when a situation of false cheque bounce
- Collecting all the important documents:
The most wise and smart thing to do when there is any false accusation to a
person is to collect proof which will show him guilty of the charge put on
him. Similarly, this case is no different and collecting the relevant
documents which would prove me innocent and the bank guilty
- Contact the bank and collect information regarding the dishonour of
If your cheque bounces, the bank would send you notice informing you of
the same. You have to then contact them and confirm if it has really happened
and if it did what are the reasons.
- Hire a lawyer and reply to the legal notice of the bank:
It is not easy
to draft a legal notice and you should not take it lightly because once the
notice is drafted and sent, you would not be able to change its content and have
to stick to it. You would not be able to go against the statement written by you
in your notice. So you must consult with a lawyer who deals with cheque bounce
cases and reply to the notice about the cheque bounce case which you would have
got from the check receiver. The reply should be sent within 30 days of
receiving the notice. In many such cases of fraud and false accusation, the case
is withdrawn once a legal notice is sent.
- File a counter case:
You are legally allowed to file a counter civil case
against the person who has filed a false cheque bounce against you. You can
claim compensation for the false accusation. You can also claim the compensation
for all the damages and expenses which you might have incurred for dealing with
the fraud case with the bank. You can also file a defamation case against the
Documents required for filing a counter case:
- Payment invoices
- Bill generated when the payment was made
- The bank account statement
- Copy of the cheque issued
- Bank draft cheque
It is always a good idea to keep 2-3 copies of each document because
sometimes you might have to submit the copies to the authorities dealing with
the case. The process becomes quicker and hassle free when the documents are
Section 138 in The Negotiable Instruments Act, 1881:
Section 138 of the
Negotiable Instruments Act 1881 provides the legal recourse to handle the
situation of cheque bounce or dishonour of cheque.
This section has been very recently decriminalised. On 8 June, 2020 the Ministry
of Finance proposed decriminalizing various minor offences “for improving
business sentiment and unclogging court processes
”, which also include Section
138 of Negotiable Instruments Act, 1881. The main purpose for decriminalising
this section is to promote foreign investment in our country. Due to the
Coronavirus Disease, the economy of our India has been affected badly and these
steps would also help in boosting India’s economy.
But every action has its reaction and this step will lead the creditors to lose
their confidence in the credibility of the cheque system.
Punishment for cheque bounce case:
Section 138 of the Negotiable Instruments Act
states the dishonour of cheque or cheque bounce is a criminal offence and the
punishment includes imprisonment up to two years or monetary penalty or with
If the court is convinced that you are guilty and the case of the bank has no
merit then it will provide you all the charges.
False Cheque bounce cases along with other frauds cases are rising
each passing day. It is very important to be aware about the different types of
fraud and especially fraud related to monetary aspects like cheques because
money is obviously involved in any job and work.
Going by the saying ‘Precaution is better than cure
’, it is always good
to have knowledge about these frauds so that you can easily prevent that from
happening or in some cases when it is not really in the hands of the person to
prevent it, you at least know the cure to it. Having knowledge makes you capable
of helping out someone stuck in that situation.
Award Winning Article Is Written By: Mr.Kishan Dutt Kalaskar
Authentication No: MA34058021655-17-0521