{"id":24524,"date":"2021-01-20T11:50:19","date_gmt":"2021-01-20T06:20:19","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=24524"},"modified":"2021-08-25T11:36:09","modified_gmt":"2021-08-25T06:06:09","slug":"what-means-cheque-dishonour-or-cheque-bounce-to-a-payee","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/what-means-cheque-dishonour-or-cheque-bounce-to-a-payee\/","title":{"rendered":"What Payee Should Do under the Circumstances of   Cheque Dishonour or Cheque Bounce?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">A cheque is a way to transfer the money and promotes the transactions of the economy in cashless. With time the usage of the cheque has been increased. People have started to do cashless transaction instead of giving currencies.When the payee gets the mentioned amount by submitting the cheque before the bank, the bank has honoured it. If the bank returned the cheque unpaid it means the cheque dishonour by the bank.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/what-means-cheque-dishonour-or-cheque-bounce-to-a-payee\/#Difference_between_Cheque_Bounce_Cheque_Dishonour\" >Difference between Cheque Bounce\n&amp; Cheque Dishonour<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/what-means-cheque-dishonour-or-cheque-bounce-to-a-payee\/#Prerequisites_if_the_Cheque_is_Dishonoured_or_Bounced\" >Prerequisites\nif the Cheque is Dishonoured or Bounced<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/what-means-cheque-dishonour-or-cheque-bounce-to-a-payee\/#Grounds_on_which_Cheque_may_be_Dishonoured_or_Bounced\" >Grounds on\nwhich Cheque may be Dishonoured or Bounced<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/what-means-cheque-dishonour-or-cheque-bounce-to-a-payee\/#Consequences_of_Cheque_Dishonour_or_Cheque_Bounce\" >Consequences of\nCheque Dishonour or Cheque Bounce<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/what-means-cheque-dishonour-or-cheque-bounce-to-a-payee\/#Conditions_to_Take_Legal_Action\" >Conditions to\nTake Legal Action<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/what-means-cheque-dishonour-or-cheque-bounce-to-a-payee\/#Punishment_under_Cheque_Dishonour_or_Cheque_Bounce_Case\" >Punishment\nunder Cheque Dishonour or Cheque Bounce Case<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/what-means-cheque-dishonour-or-cheque-bounce-to-a-payee\/#Concluding_Remark\" >Concluding\nRemark<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Difference_between_Cheque_Bounce_Cheque_Dishonour\"><\/span>Difference between Cheque Bounce\n&amp; Cheque Dishonour<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The concept of cheque Dishonour and <a href=\"https:\/\/corpbiz.io\/cheque-bounce-notice\"><strong>cheque bounce<\/strong><\/a> is almost the same, but the only difference is that cheque Dishonour occurred due to distinctive signature, wrong date etc. But the cheque bounce occurred only due to insufficient funds in drawer\u2019s account.<\/p>\n\n\n\n<p>Although cheque bounce cases are common these days, cheque remains unpaid. If the drawer fails to make a new payment within 30 days of receiving the legal notice, the payee has the right to file a criminal complaint under section 138 of the Negotiable Instruments Act. However, the complaint must be lodged in the first-class magistrate&#8217;s court within the 30 days of the legal notice period<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Prerequisites_if_the_Cheque_is_Dishonoured_or_Bounced\"><\/span>Prerequisites\nif the Cheque is Dishonoured or Bounced<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>When a cheque is Dishonoured or bounced, the drawee bank immediately issues a \u2018Cheque Return Memo\u2019 to the payee&#8217;s banker mentioning the reason for non-payment. When a cheque is Dishonoured or bounced, the drawee bank immediately issues the \u2018Check Return Memo\u2019 to the payee bank by mentioning the reason for non-payment.<\/li><li>After this, the payee bank will return the Dishonoured or bounced cheque along with the \u2018Cheque Return Memo\u2019 to the payee.<\/li><li>The payee can resubmit the cheque on it within three months of the date if payee believes that it will be honoured in a second time.<\/li><li>If the drawer fails to pay, the payee can initiate legal proceedings against the drawer.<\/li><li>The payee can legally sue the drawer for cheque Dishonour or bounce only if the amount mentioned in the cheque is against the payment of a loan or any other liability of the defaulter.<\/li><li>In case the cheque was given as a gift, for lending or unlawful purposes, then the payee cannot initiate legal proceedings against the drawer in such cases.<\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important\"><a href=\"https:\/\/corpbiz.io\/learning\/legal-rights-available-for-payee-in-cheque-bounce-cases\/\">What is the Legal Rights Available for Payee in Cheque Bounce Cases?<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Grounds_on_which_Cheque_may_be_Dishonoured_or_Bounced\"><\/span>Grounds on\nwhich Cheque may be Dishonoured or Bounced<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>No scribbling, overwriting,\ncorrection etc. is permitted on the cheque and if a cheque is found that way,\nit will be Dishonoured or bounced.<\/li><li>In case the signature is\nmissing, or the signature in the cheque does not match the with bank&#8217;s sample\nsignature.<\/li><li>In case the name of the payee\nis not mentioned on the cheque or not visible clearly.<\/li><li>In case the amount mentioned in\nwords and figures does not match with each other.<\/li><li>In case the account number is\nnot written clearly or missed.<\/li><li>In case the drawer orders the\nbank to stop payment mentioned on the issued cheque<\/li><li>If Court ordered drawee bank to\nstop payment on the provided cheque,<\/li><li>In case the drawer has closed\nthe account before submitting the cheque by the payee.<\/li><li>In case the fund in the drawer\nbank account is insufficient to complete the payment of the cheque.<\/li><li>In case the drawee bank\nreceives the information regarding the death or lunacy or insolvency of the\ndrawer.<\/li><li>The drawer does not approve any\nalteration made on the cheque by giving his\/her signature.<\/li><li>In case the date is absent or\nmiswritten, or the date is written&nbsp; three\nmonths before.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Consequences_of_Cheque_Dishonour_or_Cheque_Bounce\"><\/span>Consequences of\nCheque Dishonour or Cheque Bounce<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong>Below listed can be the consequences faced by the drawer or payee under the circumstances of cheque Dishonour or bounce<\/strong><\/em><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Consequences-of-Cheque-Dishonour-or-Cheque-Bounce.png\" alt=\"Consequences of Cheque Dishonour or Cheque Bounce\" class=\"wp-image-24535\" width=\"527\" height=\"534\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Consequences-of-Cheque-Dishonour-or-Cheque-Bounce.png 985w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Consequences-of-Cheque-Dishonour-or-Cheque-Bounce-296x300.png 296w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Consequences-of-Cheque-Dishonour-or-Cheque-Bounce-768x777.png 768w\" sizes=\"(max-width: 527px) 100vw, 527px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Penalty<\/h3>\n\n\n\n<p>In case a cheque is Dishonoured or bounced, their\nrespective banks will charge the fine on both the drawer and the payee. If there\nis a Dishonoured cheque against the loan&#8217;s repayment, the person will have to\npay additional payment charges.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Damage to\nCredit Score<\/h3>\n\n\n\n<p>Your credit history is negatively affected if your\ncheque Dishonoured or bounced activities are reported to the credit bureaus by\nfinancial institutions. Moneylenders will trust you to give financial aid if\nyou have a good credit score as it is a good practice to keep your cheque from\ngetting bounced. Your suitable payment activities will help you maintain good\nCIBIL scores and benefit you when you borrow money from any financial\ninstitution.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Legal Action<\/h3>\n\n\n\n<ul><li><strong><em>Negotiable Instruments Act, 1881<\/em><\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Negotiable_Instruments_Act,_1881\"><strong><em>[1]<\/em><\/strong><\/a><\/sup> applies to cases relating to cheque Dishonour or bounce. As per section 138 of the Act, cheque Dishonour or bounce is a criminal offence and punishable with fine or imprisonment up to 2 years or both.<\/li><li>If the payee decides to initiate legal proceedings, the drawer should be provided with the chance to repay the amount to the payee immediately.<\/li><li>To intimate the drawer about another chance, the payee requires sending notice within the 30 days of receiving of \u2018cheque return memo\u2019<\/li><li>It should be mentioned in the notice that the cheque amount has to be paid to the payee within 15 days from the date of receipt of notice by the drawer.<\/li><li>In case the drawer fails to make a new payment within 30 days of receipt of the notice, the payee has the right to file a criminal complaint under section 138 of the Negotiable Instruments Act.<\/li><li>The complaint should be registered in a first-class magistrate\u2019s court before the notice period&#8217;s expiry, i.e. within 30 days.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conditions_to_Take_Legal_Action\"><\/span>Conditions to\nTake Legal Action<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The case should be fall under\nthe terms of section 138 of N.I Act, 1881<\/li><li>The cheque should have been\nissued by the drawer on an account maintained by him.<\/li><li>In case of cheque bounce,\ncheque should have been returned unpaid by the bank because of insufficient\nfunds in the drawer&#8217;s account.<\/li><li>The cheque must be provided\ntowards discharge of a debt or legal liability.<\/li><li>In case the drawer does not\nclear the payment to payee within 15 days from the day of receiving the notice,\nthen he commits a criminal offence which is punishable u\/s 138 of the N.I Act, 1881<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Punishment_under_Cheque_Dishonour_or_Cheque_Bounce_Case\"><\/span>Punishment\nunder Cheque Dishonour or Cheque Bounce Case<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>On the complaint&#8217;s receipt,\nalong with an affidavit and the relevant paper mark, the court will issue\nsummons to accused and hear the case accordingly.<\/li><li>The accused may be punished by\nfines, which may double the amount mentioned on cheque or imprisonment for a\nterm that may extend to two years or both.<\/li><li>The drawee also has the right\nto stop the cheque book facility and close the account for repeat offences\nrelating to cheque Dishonour or bounce.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concluding_Remark\"><\/span>Concluding\nRemark<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Today in growing Speedy and fast world, we all keep our\ntransactions through online and offline mode. Generally, we issue a cheque to\nanother person in the form of order to pay or take the amount from the bank. Sometimes\nwe are unpaid, and the issued cheque gets bounced. <\/p>\n\n\n\n<p>Payee sends notice to the drawer to meet or release the cheque amount within a specified period. In case we find no affirmative response from their end, we could proceed legally and penalize the wrongdoer for such acts. Kindly associate with the <a href=\"https:\/\/corpbiz.io\/\"><strong>Corpbiz<\/strong><\/a> expert to know more about the What Payee Should Do under the Circumstances of&nbsp;&nbsp; Cheque Dishonour or Bounce.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important\"><a href=\"https:\/\/corpbiz.io\/learning\/procedure-of-sending-a-legal-notice-for-cheque-bounce-online\/\">How to Send a Legal Notice for Cheque Bounce?<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A cheque is a way to transfer the money and promotes the transactions of the economy in cashless. With time the usage of the cheque has been increased. People have started to do cashless transaction instead of giving currencies.When the payee gets the mentioned amount by submitting the cheque before the bank, the bank has [&hellip;]<\/p>\n","protected":false},"author":32,"featured_media":24534,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1931],"tags":[1447],"acf":{"service_id":"283"},"authorName":"Komal Singh","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/processed.jpeg","authorDescription":"Komal Singh is a Legal scholar, having diverse experience in scripting research papers, articles &amp; dissertations, which serves her main interest &amp; competent in drafting legal documents. She has polished her skills in dealing with the matter related to consumer affairs and now building intelligible Legal Content for Corpbiz.","postViews":22530,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/24524"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/32"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=24524"}],"version-history":[{"count":8,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/24524\/revisions"}],"predecessor-version":[{"id":24538,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/24524\/revisions\/24538"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/24534"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=24524"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=24524"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=24524"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}