What happens when a cheque bounces? There are both civil and criminal implications. The issuer of a bouncing cheque may be subject to civil liability. In India, the law allows the aggrieved party to bring a case under section 138 of the Negotiable Instruments Act, 1881, or section 420 of the Indian Penal Code, 1960. The penalties for a bounced cheque may vary depending on the circumstances and where the occurrence took place.


Defaulters have several options if their cheques bounce due to insufficient funds. However, they must act quickly if they want to avoid legal consequences. In many states, issuing a cheque without sufficient funds is punishable by law. The lender may try to collect the debt by cashing the check, but this will not be effective if the person has not paid the lender. In this case, the lender may try to prosecute the defaulter in absentia, or extradite the person who failed to pay.

A cheque bounce complaint can be filed with the court if the drawer fails to pay. The drawer has thirty days from the date of the complaint to pay the amount, or face civil and criminal penalties. The drawer has the option of settling the complaint in civil court, or filing a criminal case in the city where the cheque was deposited. The beneficiary of the cheque has the right to sue the drawer for failing to pay.


Depending on the circumstances, writing a bad cheque can have both criminal and civil consequences. The most common consequences of a cheque bounce are criminal charges, but there are civil consequences as well. Whether a cheque bounces accidentally or on a regular basis will depend on the circumstances surrounding the incident. In some cases, bad cheques are a sign of a bigger problem. Read on to find out more about the consequences of bad cheques.

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If the payee doesn’t receive the money due to the drawer, he can file a civil suit. This lawsuit is known as a summary suit, and it’s different from an ordinary lawsuit. Under the Civil Procedure Code, the payee can sue the drawer of the cheque for the amount due, plus the costs of litigation. The drawer has no right to defend himself. Here are some of the most common civil consequences of a cheque bounce.


What happens when a cheque bounces? Bounced checks are returned to the merchant or the person who attempted to cash them. These checks bounce due to insufficient funds in the account of the person trying to make the purchase. The next step is to determine whether the check payer is responsible for the merchant fee and returned-check charge. In some cases, a merchant may try to resolve the matter informally with the customer.

Many banks require customers to check the authenticity of a check before depositing it. However, sometimes people don’t do this and may simply lie about their funds. The American Banker’s Association incurs costs processing bad checks. Often, the bank will collect this money from the customer who deposited the check. So, how can merchants protect themselves from this problem? Below are three common scenarios where merchants may be responsible for a cheque chargeback.

Bank penalties

A cheque becomes a “bounced cheque” when it is presented to the bank and does not clear. A cheque may bounce for several reasons, such as insufficient funds, a defect in the cheque, or because the amount mentioned in the check exceeds the account balance or a prearranged limit. The penalties imposed by banks for a cheque that bounces are varied, but can be as high as Rs 700.

One of the most common reasons a cheque bounces is that the information on the cheque isn’t legible or illegible. The cheque may have been tampered with, or have marks or stains that prevent it from being read properly. The drawer’s name or account number is also a problem, as the company’s seed is not on the cheque. Another reason the cheque might bounce is because the drawer died or was insane, or the cheque lacked the necessary information to be processed.

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Legal ramifications

What are the legal ramifications of a cheque bounce? Bounced cheques are an unfortunate but common occurrence. If a cheque is not paid on time, the bank can charge a heavy penalty. It may also affect the borrower’s CIBIL score, which is used by banks and non-banking financial companies to determine whether a borrower is a risk for future credit. As a result, a cheque bounce can have serious consequences for the borrower, making it difficult to obtain loans in the future. Fortunately, the Reserve Bank of India (RBI) has issued guidelines to prevent banks from extending chequebooks to defaulters.

A bounced cheque has several ramifications, including a civil suit against the drawer. A payee may also issue a legal notice seeking the recovery of the amount. In contrast to a criminal cheque bounce under Section 138 of the Act, a civil suit seeks recovery of the amount, not the drawer. In most cases, the payee will be held liable only if there is a debt involved, so it is important to monitor the available balance on your account. Also, keep a buffer of extra cash in your account so that you can use it if the cheque bounces. A stop payment or letter written to the payee should also help.

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