Untitled Document
Law on bouncing of cheque by Vinod Kumar
Added on 2008-07-02 01:13:28
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CRIMINAL LAW ON BOUNCING OF CHEQUES
The law of this land is very strict in punishing the bouncer of the cheques. The person who dishonours the cheques cannot escape from the clutches of Criminal Liability. The reason behind the same is that the law says, once a person issues a cheque to another the presumption is that he has issued the cheque in discharge of the whole or in part of the legally enforceable debt and liability.
This particular principle of law has been enacted with the object to inculcate faith in efficacy of banking operations and credibility in transacting business on cheques. The law here is strict with regard to punishing the bouncer of the cheque because, if it were otherwise then trade and commerce activities are likely to be adversely affected and obstructed as it will not be practicable for trading community to have faith in transaction with cheque and they can not carry on with the bulk of currency. Hence people can transact through cheques without any fear or doubt because the people are aware that, defaulter will be punished and people are entitled for compensation also. Hence, in view of the same no body will easily dishonour the cheque because if any body dishonours the cheque it will be at his risk cost and consequences.
A person issues a cheque to another and the same gets bounced. Under such circumstances, what the Drawee (receiver)of the cheques has to do?
The Drawee of the cheque has to issue a Notice to the Drawer calling upon him to make good the payment. The said notice should be given within 30 days of the knowledge of bouncing of cheques. The above said notice can be sent either by the Drawee himself or through his advocate. Better course of action is to get a legal notice issued through an advocate to avoid technical defaults. In spite of the receipt of the Notice if the Drawer fails to pay the amount within 15 days, such act of the Drawer of non payment of the amounts due, becomes a Criminal offence and he is liable to be prosecuted before the criminal courts. Under such circumstances the Drawee is entitled to file a Complaint against the Drawer before the Criminal Court (Magistrate’s Court) for initiating criminal proceedings. Here the Drawer of the cheques will be the Accused and Drawee of the cheques will be the Complainant.
If the Court after scrutinizing the documents and evidence on record finds an accused guilty (Drawer of the cheque, the defaulter) then the Court is empowered to impose fine of double the amount of the cheque bounced and also can sentence the guilty to undergo imprisonment for a period up to two years.
The procedure in the Court stands thus, when the Complainant files a criminal case for bouncing of cheque against the Drawee the Court will issue summons or warrant to the bouncer. The bouncer has to enlarge himself on bail by furnishing surety for his appearance before the Court. There after on all the dates of hearing he has to be present before the court. Even for a single date if the bouncer fails to appear, the court is empowered to issue a non-bailable warrant (arrest warrant) against him. The next stage will be recording of Plea, at this stage the Court will ask the Accused whether he admits the contents of the case filed against him or not. If he admits the allegations, he will be sentenced for punishment. In case he denies the allegation the court has to ascertain the grievance of the complainant (Drawee) by allowing both the parties to adduce their evidence.
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