Cheque bounce has been a familiar financial offence - it can bring civil as
well as criminal charges against you. An incident of cheque bounce shall fall
under criminal or civil matter, which is a tricky question, that a lawyer can
help you through.
Under what condition, a civil suit and a criminal suit are filed for cheque
Civil Suit: Usually, a civil suit when filed in the case of dishonour of cheque
is for the recovery of the money, without dragging the defaulter towards
If the drawer is found guilty as a wilful defaulter, he will be charged with
a jail term of two years or a fine which is twice the cheque amount, or both.
The defaulter is also given a chance to appeal to the sessions court within a
month of the date of the judgment of the lower court.
What is the difference between Cheque Bounce and Cheque dishonour?
Cheque bounce and cheque dishonour are almost the same concepts.
The terms Cheque Bounce or Dishonoured Cheque are used when a bank denies
honouring the cheque which was used for payment.
Cheque bounce means the cheque submitted to the bank to draw a certain sum of
money mentioned on the cheque is rejected due to a distinctive signature.
Dishonouring of the cheque is the concept when a cheque is drawn by a person for
an account which is maintained by a bank with the banker for paying a certain
sum of money rejected by the bank due to an insufficient balance in the account
or exceeds the amount there in the account
What are the penalty and punishments for cheque bounces?
When the bank returns the cheque unpaid it is considered a case of cheque bounce
or cheque dishonour then that person can be shall be deemed to have committed an
offence and that person may be asked to pay a fine which is extended to twice
the amount mentioned on the cheque or can be punished with the imprisonment for
a term which may be extended to two years or both.
The conditions shall unless:
- Within six months the cheque has to be presented to the bank from the
date when the cheque was drawn or the validity period of the cheque
whichever is earlier.
- In the due course of the cheque demands the payment of the amount
mentioned on the cheque by providing written notice to the drawer of the
cheque within thirty days of the receipt of the information concerning the
return of the cheque as unpaid from the bank.
- The payee does not get the said amount due to the failure of the cheque
by the drawer within fifteen days of the receipt of the said notice.
In August 2021, The Reserve Bank of India issued a notice related to new rules
of cheque bounce. The customers who are involved in financial activities via
cheque make sure that they have a minimum balance. Failure to maintain the
minimum balance would lead to a situation of cheque bounce.
The new rule will be applied to all the private and national banks. The main aim
to bring this rule was to faster clearing of cheques and to decrease the
pendency of cheque clearance.
Grounds for Cheque Bounce:
Insufficient account balance If the minimum account balance is not maintained in that case the cheque may
Expired validity The cheque must be submitted before the expiry date, in case it is submitted
after the expiry date it may bounce.
Overwriting If the amount written or any details written are overwritten in that case
also the cheque may bounce.
Damaged cheque In case the cheque is damaged or disfigured due to some reason then the
cheque may bounce.
- Mismatching of signature
In case the signatures are mismatched the cheque may get bounced due to such
Mismatch of Amount or digits When the amount mentioned on the cheque does not match it might result in a
The wrong date mentioned The cheque can also bounce in case the wrong date is mentioned on the cheque.
Remedies in case the cheque bounces:
When there is a case of cheque bounce because of reasons like insufficient
balance, overwriting, mismatching signature or damaged cheque etc. the drawer of
the cheque can submit another cheque by rectifying the mistakes to avoid any
civil action against the drawer.
- In case there is an act of recurring cheque bounce it can lead to affect
the financial credit history.
- According to the new rules of the Reserve Bank of India, a bank can
restrict the issuance of cheques book to the costumes in case of a repeated
cheque bounce issue
Ways to avoid the dishonour of cheque:
- Use a signature which is similar to the signature registered with the
- Make sure there is a minimum balance maintained
- Filing the details on the cheque correctly so that the cheque does not