Wednesday , July 24 2024

Check Bounce Rules: Bank rules regarding check bounce, know how much fine and punishment is there?

check bounce rules

Rajkumar Santoshi Check Bounce Case: Filmmaker Rajkumar Santoshi, famous for films like Ghayal, Damini, Lajja, Khaki, The Legends of Bhagat Singh, has been sentenced to two years in jail by the Jamnagar Court of Gujarat. Apart from this, he may also have to pay a fine of Rs 2 crore. The court has given this punishment to Santoshi in the check bounce case.

What is the matter?

Ashok Lal, a prominent industrialist and shipping giant from Jamnagar, has claimed that he had invested Rs 1 crore in Rajkumar Santoshi's film, in return for which Santoshi gave 10 checks of Rs 10 lakh each. All these checks later bounced. Ashok alleged that he tried to talk to the film producer about this, but could not talk to him. After this he filed a case under the Negotiable Instruments Act.

How can a check bounce?

  • No or low account balance
  • signature mismatch
  • spelling mistake
  • mistake in account number
  • over writing
  • check expiration
  • Closing the Check Issuer's Account
  • suspicion of forged check
  • Absence of company seal on check

What is the penalty for bounced cheque?

Banks charge a penalty if a check bounces. The fine will have to be paid by the person who has issued the cheque. This fine may vary depending on the reasons. Generally the fine ranges from Rs 150 to Rs 750 or 800.

Can be jailed up to 2 years

Check Bounced According to the Negotiable Instruments Act, 1881, a person can be prosecuted in case of check bounce. He can be punished with imprisonment up to 2 years or a fine up to double the amount of the cheque, or both. However, this happens only when the check drawer does not have sufficient balance in his account and the bank dishonors the cheque.

What happens after a check bounces?

Otherwise, as soon as the check bounces, a case is registered against the payee. When a check bounces, the bank first gives a receipt to the creditor, in which the reason for the check bounce is mentioned. After this the lender has to send a notice to the debtor within 30 days. If no response is received from the debtor within 15 days of the notice, the creditor may file a complaint in the magistrate's court within one month from the date of expiry of 15 days of the notice.

If even after this the amount is not paid to you, a case can be filed against the debtor. According to Section 138 of the Negotiable Instruments Act 1881, check bouncing is a punishable offense punishable with imprisonment of up to two years or fine or both.