Section 138 of the Negotiable Instruments Act 1881 Cheque Bounce in Indore
Section 138 of the Negotiable Instruments Act, 1881: Cheque Bounce in Indore
Greetings! As a lawyer practicing in Indore, I can shed light on Section 138 of the Negotiable Instruments Act, 1881, and its implications for cheque bounce cases.
What is Section 138?
Section 138 makes the drawing of a cheque on an account knowing there are insufficient funds a criminal offense. This means issuing a cheque that bounces due to lack of funds can land the issuer in legal trouble.
Elements of the Offense:
To successfully invoke Section 138, the following elements must be established:
- Drawing of a cheque: The accused must have drawn a cheque on a bank account.
- For discharge of debt or liability: The cheque must be issued to settle a debt or financial obligation, either wholly or partially.
- Presented within three months: The payee must present the cheque for encashment within three months from the date of issue.
- Dishonor due to insufficient funds: The bank must dishonor the cheque due to insufficient funds in the drawer’s account.
- Knowledge of insufficiency: The drawer must have known, at the time of issuing the cheque, that there were insufficient funds to cover it.
Consequences of Cheque Bounce:
If convicted under Section 138, the drawer faces:
- Imprisonment: Up to two years.
- Fine: Up to twice the amount of the cheque.
- Both imprisonment and fine: At the court’s discretion.
Procedure for Cheque Bounce Cases in Indore:
The payee can initiate legal proceedings by:
- Sending a Demand Notice: A legal notice demanding payment within 15 days of receiving the dishonored cheque.
- Filing a Complaint: If the payment is not received within the stipulated period, a complaint can be filed in the Magistrates’ Court under Section 138.
- Trial and Evidence: The court will hear both sides and consider evidence like the dishonored cheque, bank statement, and demand notice.
- Judgment and Conviction: If convicted, the drawer faces the aforementioned penalties.
Important Points to Remember:
- Cheque bounce is a serious offense with potentially significant consequences.
- Consulting a lawyer experienced in NI Act cases is crucial for navigating the legal process effectively.
- The onus of proving knowledge of insufficient funds lies with the prosecution.
- The drawer can avoid legal action by paying the cheque amount and bank charges within the notice period.
Additional Considerations in Indore:
- Local courts in Indore may have specific procedures or precedents regarding cheque bounce cases.
- Seeking legal advice from a lawyer familiar with the local legal landscape is highly recommended.
I hope this comprehensive overview of Section 138 and its application in cheque bounce cases in Indore proves helpful. Remember, this information is for general awareness and does not constitute legal advice. For specific legal guidance, seeking the counsel of a qualified lawyer is always advisable.
Feel free to ask if you have any further questions about Section 138 or cheque bounce cases in Indore.
Adcocate J.S. Rohilla (Civil & Criminal Lawyer in Indore)
Contact: 88271 22304