What is Cheque Bounce?
A Cheque bounce occurs when a cheque is returned by a bank due to various reasons such as a lack of funds or a signature mismatch. Besides the monetary trouble it creates, it has very severe legal implications under the Negotiable Instruments Act, of 1881, Section 138.
A cheque is said to have bounced when the bank declined to honor it because of several other reasons such as:
- There were not enough funds in the account of the drawer.
- Signature differences or inaccuracy of the cheque details.
- Cheques are valid for three months and crossed over that period.
- Drawer's bank account had been closed.
In case your cheque gets dishonoured, the bank will return it along with a 'cheque return memo'. Such a memo will mention for what reason the cheque has not been allowed to be cleared. Various kinds of financial and legal losses accompany cheque bounce against the cheque drawer. Hence, it is important to address the situation effectively within time.
Reasons behind Cheque Bounce
- Signature mismatch between the drawer's records and the cheque.
- Cheque alteration: Overwriting or corrections done on the cheque can make it get bounced.
- Account closure: The account from which the cheque is issued has already been closed
- Expired cheques: Issuing a cheque after its validity period of 3 months.
- How to prevent Cheque bounce
Here are a few steps you can take to avoid the cheque bounce.
- Sufficient balance in the account must be ensured before issuing a cheque
- Issued cheques shall be maintained up-to-date to ascertain the same
- As an alternative, digital payment gateways such as bank transfers, or UPI can be chosen
- Before making the delivery, ensure that cheque details are checked for nil corrections or overwriting
- Always issue and present cheques within their date of validity
How Can YKG Global Help You
At YKG Global, we know that cheque bounce cases can be way too stressful and cumbersome, especially when matters take a legal turn. We have various services that help you solve such issues:
Drafting and Sending Legal Notice: We draft the legal notice to the drawer professionally and make sure that the same is posted before the expiry of the statutory period for the activation of the case.
Filing of Cheque Bounce Case: In case the drawer fails to clear the cheque, we would counsel you to file a case in the court under Section 138, thereby making sure that all the documents are proper.
Legal Representation: Our top-notch lawyers appear for you in court, through preliminary hearings all the way to final judgments. We zealously tell your case clearly, giving you an aim for swift resolution.
Negotiation and Settlement: Often, an out-of-court settlement would be an option. We can help you navigate the negotiation process of both parties to come up with a fair deal that will save you time and reduce litigation costs.
Support in Counterclaims: If you are falsely implicated in a cheque bounce case, our team would draft a strong defense to ensure that the case is explained accordingly in the light of the circumstances surrounding the case.
End-to-end Legal Solutions: From sending notices to the verdict from the final court, our law firm provides end-to-end legal assistance. The process will be taken care of by them, so you don't need to think about anything else except your business or personal issues.
