Cheque Bounce Law
Cheque Bounce (Dishonour)
The refusal of a bank to honour a cheque, commonly due to insufficient funds, which can amount to a criminal offence under the Negotiable Instruments Act.
When a cheque issued to discharge a legally enforceable debt is returned unpaid, typically for insufficient funds, the payee can send a legal demand notice within a specified time, and if payment isn't made within the notice period, file a criminal complaint under Section 138 of the Negotiable Instruments Act.
Such cases are treated as criminal offences precisely to give cheques greater credibility as a mode of payment, though the underlying remedy is still fundamentally about recovering the money owed.
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