Section 138 Cheque Bounce

The term negotiable instrument usually refers to a piece of paper which entitles the holder to claim money and sometimes even goods.

Section 138 cheque bounce. Section 138 describes the above ground of insufficient funds in the account of the drawer of the cheque in the following words. Section 138 of the negotiable instruments act 1881 lays down that any person found guilty of the offence of dishonour of cheque shall without prejudice to any other provisions of this act be punished with imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of the cheque or with both. This notice format under section 138 is specially drafted for india.

Any offence against cheque as specified under section 138 of negotiable instrument act is a criminal offenceand thus the proceedings against such cheque is dealt in accordance with the summary trial provisions of code of criminal procedure 1973 crpc. It was noticed that cheques used to be issued as a device inter alia for defrauding the creditors and stalling the payments. This section 138 notice format is drafted by our legal and law experts.

If the creditor will not get any reply from the debtor then within 15 days. Cheque bounce dishonor of cheque also known as a rejection of cheque or check bounce comes under the ambit of section 138 of the negotiable instruments act 1881. The object of section 138 is to induce faith in efficacy of banking operation and credibility in transacting business.

Notice format under section 138 with pdf this is a suggested notice format under section 138 also called check bounce notice format. The amount of money standing to the credit of the account of the drawer on which the cheque is drawn is insufficient to honour the cheque or. Cheque bounce is governed under section 138 of the negotiable instrument act.

Under section 138 of the negotiable instruments act 1881 a person who commits the offence of cheque bounce is liable for the punishment of imprisonment for a term which may be extended to two years or with fine penalty which may extend to twice the amount of the cheque or with both imprisonment and fine penalty. In 1988 the negotiable instruments act 1881 was amended and section 138 was inserted making the bouncing of cheques a punishable offence amounting to a punishment of imprisonment of a term extendable to 2 years or with fine extendable to double the amount of the cheque or both. It is available for free download in pdf and docs format.