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CHEQUE
BOUNCE M. Shiva Rama Krishna10HM28
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W HAT IS A CHEQUE
A Cheque is a bill of exchange drawn upon a
specified banker & not to be expressed to be payable otherwise then on demand .
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CHARACTERISTICS
I n WritingUnconditional order
Specified banker Payment to a specified personPayable on demand
Specified sum of moneySignature
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BOUNCING OR DISHONOR OF
CHEQUE When a Cheque is presented to a bank for payment & if
it is not paid, it is said to be dishonored or "bounced".
Cheque is a negotiable instrument and bouncing of a
cheque is a Criminal Offence, which is governed by
NEGOT IABL E I NSTRUMENT A CT, 1881. I t is
punishable by up to 2 yrs of imprisonment.
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REASONS OF DISHONOUR
Signature not matchedOverwriting in chequePresented in bank after completion of six
monthA ccount closedI nsufficient funds
Payment stop by account holder
Opening balance insufficientA mount differs in words & figures
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REASONS OF DISHONOUR
I n case of company without seal of companyA ccount number not matched
I n case of joint accounts only one account
holder sign but both signature are required.On the death of customer On the insolvency of customer On the insanity of a customer
On Garnishee order I n case of crossed cheques
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REASONS OF DISHONOUR
When cheque is issued against the rules of trust.A lteration
DoubtfulOther branch chequeOD limit crossed
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SECTIONS REGARDING
DISHONOR OF CHEQUESections 138 to 142 incorporated by the
Amendment Act in 1988 provide for criminal penalties in the event of dishonor of cheques for in suffciency of funds.The drawer under the section 138, may
be punished with imprisonment up to 2years or with a fine up to twice theamount of the cheque or with both.
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IMPORTANCE OF LIMITATION PERIOD
The case must be filed within 30 days after completion of the
notice period of 15 days. For example
Notice received by defaulter on 5 November, now one needs
to wait for 15 days i.e. up to 20 November.
I f the payment is not received in these 15 days, a case can be
filed within the next 30 days i.e. before 20th Dec. I f the case is
filed on 21st Dec, it will be dismissed by the court.
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STEPS FOR GIVING NOTICE & FOR FILING A SUIT IN THE COURT:
Notice should given with in 1 month of cheque bounce Notice should be sent by Registered post with acknowledgementreceiptIt is advisable to send one copy of notice by mode of U.P.C. aswell.
A fter waiting for 15 days after the payer receives the notice, acase can be filled in court with in one monthThe following documents will be required in filing the suit:a. Complaint,
b. oath letter c. photocopy of all the documents such as cheque, memo, noticecopy, and acknowledgment receipts,
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Court Fee For a check up to 50000/- the fee is Rs 200. For acheck up to 200000/- the fees is 500/-. A bove 200000/- the fees is
1000/-.
Memo of A dvocate is essential at the time of filing a suit along
with signatures of complainant. A fter case is file by complainant in
court, all documents are cross checked by Judicial Magistrate First
Class, so original documents such as original cheque (bounced),
original memo, copy of notice, receipt of post office, receipt of
U.P.C., acknowledgement receipt, are required at the time of cross
checking. The period of limitation is also verified at this stage.
COURT PROCESS FOR FILING A CASE
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COURT PROCESS FOR FILING A CASE
Now B hatta (Process Form) is filed by the complainant or
lawyer, along with addresss of accused, and the court will
then issue a summons to accused for appearance in court on
specific date.
I f A ccused does not appear in court on the date of hearing, the
court issues a bailable warrant on the request of the
complainant
I t the accused still does not appear before the court, the court
may issue a nonbailable warrant of arrest
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MA N A SKED TO P AY RS 4.70 LA KH COMPENS A TI ON .
Taking a note of the rise in the cases of dishonor of
cheques, Delhi court has sentenced a man to one year
imprisonment and asked him to pay a compensation of Rs 4.70
lakh to his friend for failing to repay a loan. The court refused to
take a lenient view against Vijender Kumar whose post-dated
cheque to his friend in lieu of loan had bounced due to
insufficiency of funds.
CASES
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2 MEN SENTENCED I N CHEQUE B OUNCE
CA SES
Judicial Magistrate Charanjit A rora has sentenced
B albir Singh, the proprietor of Titan Knitwears here, for
one and half year imprisonment in a cheque bounce
case. The court has also directed B albir Singh to pay Rs
5 lakh, which was the cheque amount, as compensation
to the aggrieved complainant.
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I n another cheque bounce case, A dditional Chief
Judicial Magistrate K S Cheema has sentenced one year
imprisonment to Sukhdev Singh, a resident of Partap Nagar, in a cheque bounce case. A fine of Rs 1,000 has
been imposed upon him. The court has also directed
Sukhdev Singh to pay the compensation of Rs 40,000 to
the complainant.
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