Check Bounce Cases

Looking for the Best Lawyer for Cheque Bounce Case?

If you are dealing with a cheque bounce case and are looking for legal assistance, it’s important to choose a lawyer who is well-versed in the Negotiable Instruments Act and has a successful track record in handling such cases. At Maha Law Associates (MLA), we have a team of experienced lawyers who specialize in cheque bounce cases and cases related to Section 138 of the NI Act.

Our lawyers will guide you through the entire legal process, right from filing the initial legal notice to the drawer, to representing you in court. We understand that each case is unique, and we provide personalized legal solutions based on the specifics of your case.

If you have issued a bad cheque or received one, contact us and we put all our efforts into getting you the relief. We ensure that all our efforts are directed towards the achievement of our Client’s goal. So, be it a cheque bounce complaint, mediation, 138 case etc we have got you covered. Our team of cheque bounce lawyers will fight your case with dedication, honesty and accountability.

Dealing with a cheque bounce case can be a complex process. However, with the right legal guidance and understanding of the law, you can successfully navigate this process and recover your dues. Whether you are a business owner, a professional, or an individual, it’s important to understand the implications of a cheque bounce and the legal remedies available to you. Remember, ignorance of the law is not an excuse, and being well-informed can save you from potential legal hassles in the future.

At Maha Law Associates (MLA), we maintain 100% confidentiality with respect to all our Clients. Therefore, the entire process will be kept completely confidential. Our client can believe us for sure and we know our credibility is our success.

When the cause of action starts for the cheque bounce?

First, the payee presents the cheque within the validity (6 months) of the cheque. Then, the bank has to reject the cheque with a return memo “Due to insufficient funds“. Next, the payee sends a legal notice (registered post with acknowledgement) demanding for the full payment of the cheque amount within the stipulated time.
Now you have total 45 days (30 days from the date of cheque bounce + the mandatory 15 days expiry of the notice period) to file a private complaint against the accused under Section 138 N.I. Act. In other words, time is of essence.

First Information Report (FIR) for cheating (S.420 IPC).

Approach the local jurisdictional police and submit all the relevant proofs of the case if you have been cheated by the unscrupulous persons and request the police authorities to register an FIR against the accused persons.

Bailable or non-bailable offence?

Bailable offence is a matter of right.
Non-bailable offence means that a police cannot release an accused for certain ‘non-bailable’ offences on bail, but only the Court has the power to release the accused on bail, irrespective of whether it is bailable or non-bailable.

Cheque bounce is a non-cognizable offence and hence, the police does not directly involve with the case since they do not have any jurisdictions. Upon filing the private complaint, the Court issues a summon to the accused to be available during the proceedings.

When police can arrest?

First, the court will issue a bailable warrant in the cheque bounce case.
If the accused is still failed to appear despite serving of summons, then the Non-Bailable Warrants (NBWs) will be issued and the police is directed to arrest the accused and present them before the court.

If NBW is issued against you, then you’ll need to file an application for cancellation of NBW before the Hon’ble Court.

Other legal recourses in Cheque Bounce cases
File a cheating case Indian Penal Code (IPC).

You can file a cheque bounce under both S. 420 of IPC (dheating) as well as under Section 138 of NI Act (dishonour of cheque).

The Hon’ble Karnataka High Court has ruled that proceedings under Section 420 of the Indian Penal Code are maintainable even if a complaint under Section 138 of the Negotiable Instruments Act has been filed.

Cheque bounce: Filing procedure, process and fees.

Presumption of liability or debt:

Section 139 of NI Act provides that it shall be presumed that the holder of a cheque received the cheque of the nature referred to in Section 138 of NI Act for the discharge, in whole or in part, of any debt or other liability.

Five Golden Rules in Cheque Bounce Cases:

In the case of Bhaskaran v. Sarkaran Vaidhyan Balan ((1999) 7 SCC 510), the following five acts are a sine-qua-non for the completion of an offence under Section 138 of NI Act.
1. Drawing of the cheque
2. Presentation of the cheque to the bank,
3. Returning the cheque unpaid by the drawee bank,
4. Giving notice in writing to the drawer of the cheque demanding payment of the cheque amount,
5. Failure of the drawer to make payment within 15 days of the receipt of the notice.

Cheque Rule Change: Pay Extra If you don’t Follow New Rule.

The new set of rules, which took effect on August 1, 2021, states that customers who plan to issue cheques need to ensure that there are sufficient funds in the bank accounts to do so. If this minimum balance is not maintained, the cheque will bounce.

Stages of Cheque Bounce Case of N.I Act:

1. Mandatory Demand Notice
2. Filing complaint u/s 138 of N.I Act
3. Sworn Statement of Complainant
4. Appearance of Accused
5. Recording of Plea
6. Examination in Chief
7. Cross Examination
8. Defence Evidence
9. Arguments
10. Judgment

Documents required to file/defend a 138 cheque bounce cases:

For Complainants:

• Any agreement/contract between complainant & accused including order(s) placed (if any)
• Invoice / Bill against which dishonoured cheque was issued
• Any other document that is evidence of the creation of debt or liability
• Correspondence Exchanges between the parties.
• Original Dishonoured Cheque
• Bank Memo stating the reason for dishonour of cheque
• Copy of the legal notice sent to the accused
• Proof of dispatch of the above legal notice (RPAD cover, receipt)
• Postal Acknowledgment received from the accused

For Accused:

• Communication exchanged between the parties
• Documents evidencing that the accused has no liability.
• Reply to Demand Notice.

Bail provisions in Cheque Bounce Cases (S.138 NI Act)

Bail is a temporary release of an accused person awaiting trial, on surety bond.

There are three types of bail prevailing in India which are:-

• Regular Bail (u/s 437 & 438 of CrPC): Granted to a person who has been arrested or is in police custody.

• Interim bail: Granted for a short period of time, usually before the hearing for the grant of regular bail or anticipatory bail.

• Anticipatory bail (Pre-arrest bail): Granted under section 438 of the Cr.PC either by Sessions Court or by High Court.

Bank Charges, Penalties, and Compensations
(Negotiable Instruments (Amendment) Act 1881)

Interim Compensation u/s 148 of N.I. (Amendment) ACT 2018:

The parliament passed the Negotiable Instruments (Amendment) Act which inserted/introduced Section- 148 where in case of an Appeal filed by the accused against the conviction under section 138, the Appellate Court may order the Appellant to deposit a minimum of twenty percent of the fine or the total compensation awarded by the trial Court.
The Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant, not exceeding 20% of the amount of the cheque.
Dispute Resolution and Settlement in cheque bounce cases

Scope of Mediation in Cheque Bounce cases:

If you find that you are able to make the payment, initiate a mediation and dialogue with the opposing side and try to settle the case. If both the parties agree on the terms of payment, then draft a MOU and submit before the court for the settlement. Then, the complainant can file an application to withdraw the case if the dispute is settled.

In the case of Mayawati v. Yogesh Kumar Gosain (2017), the Hon’ble Delhi High Court provided a new approach to deal with the cheque bounce cases u/s 138 of NT Act by way of Alternate Dispute Resolution (ADR) mechanism as the offences are criminally compoundable by nature.

Defence strategies in cheque bounce cases

File a counter case:

If you’ve been wrongly subjected to a false cheque bounce case, then file a counter case. Talk to your lawyer for specific legal advice and assistance to prove your innocence in the false case.

It is important to understand that the complainant has to prove ‘legally enforceable debt’, while the accused can prove that the cheque was given merely as a security deposit. If the accused is successful in proving the same, then they have better chances of acquittal.

Send a reply to legal notice u/s 138 N.I.Act:

If you’ve received a cheque bounce lawyer notice regarding a cheque bounce case, and if you believe the same thing to be false and with a malafide intention, then take the help from a lawyer to draft a reply to the original notice by countering each and every relevant point.

You cannot underestimate the power of reply notice in a S.138 case. It’s a golden opportunity to deny and refute all the allegations made by the opposite party. And demand them to withdraw the notice which has no basis under Section 138 of Negotiable Instruments Act.

Cross-Examination Questions in 138 Cheque Bounce Matter:

1. What is your job/salary/qualifications (complainant’s background)
2. What was the mode of payment of loan?
3. If cash, can you (complainant) show the withdrawal from the bank?
4. What is the source of the funds?
5. Have you filed ITR for the financial years [x]?
6. Have you filed a balance sheet along with the ITR?
7. Is this amount reflecting in the balance sheet?
8. Have you subjected the balance sheet to the audit?
Do you want to talk to an expert lawyer to defend a false cheque bounce case?
Punishment & penalty for Cheque Bounce Cases

A criminal offence:

According to Section 138 of the Act, the dishonour of cheque is punishable by imprisonment up to two years or with monetary penalty or with both. After the amendment of 2002 the imprisonment that may be imposed may extend to two years, while fine may extend to twice the amount of cheque.

If the cheque bounce case is a summary trial, then the Magistrate can pass a sentence of imprisonment not exceeding one year and amount of fine exceeding Rs. 5,000.