In today’s world we do payment in different modes in lieu of a liability that includes online transfers such as NEFT, IMPS, WALLETS. Similarly, there is one another common way to pay and that is issuing CHEQUES.

NOW, imagine a scenario that “The Payee” deposits the cheque in his/ her bank and after few days gets the message that cheque cannot be processed due to “payment stopped by drawer”. In other words, the cheque can not be honored and that’s when we call the cheque is bounced.

Therefore, a situation where the payee presents the cheque to the bank and it is returned unpaid by the bank with a memo of “insufficient Funds” or “Payment stopped by Drawer” , then The Cheque is said to be Bounced.

Consequences of bouncing of Cheque?

Cheque Bounce is an offence under Section 138 of Negotiable instruments Ac, 1881, (The Act), punishable with a Fine which can extend to twice the amount of the cheque or Imprisonment for a term not more than two years or both.

Therefore “The Payee” can initiate a criminal proceedings under The Act against the drawer in case of non payment of the cheque amount.

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