Here is everything you need to know about the penalty for check bounce and why you will need to hire a cheque bounce lawyer in Mumbai.
In the current digital world, liquid cash has become one way of money transaction. One of the most preferred and sought-after options for withdrawing or depositing money is through cheque. But with all the perks comes the common complication, too, regarding the cheque to bounce.
The cheque bouncing problems are becoming a common scenario, regardless of whether you are a businessman or a salaried person.
One can easily find themselves struggling in a case like this, which can be due to many things, including a signature mismatch, insufficient funds and more. Here is when a cheque bounce lawyer in Mumbai comes into the picture with their expertise and skills.
Not many people know that, but a case like this can have serious repercussions. For those needing legal advice, you need a professional with profound knowledge who can fight for your case.
A cheque is a bill of exchange drawn upon a specified banker, and the amount is payable based on the demands. When the bank returns the cheque without being paid, it is a situation of a “dishonoured or bounced” cheque. The bank will issue a “cheque return memo” if it bounced for the first time. With that, they will also specify the reason for non-payment.
What is a cheque-bounce law?
In India, a person issuing a cheque will be said to commit a criminal offence if the cheque is dishonoured (cheque bounce) for insufficient funds. A cheque bounce offence is punishable with imprisonment for up to two years or a fine twice the amount mentioned in the check. Therefore, small and medium-sized businesses need to understand their rights and responsibilities of a cheque bounce and keep the financial discipline to avoid such instances.
A cheque bounce is an offence covered in Section 138 of the Negotiable Instruments Act, 1881 (“Act”). It is a punishable offence with a fine that can exceed twice the amount of the cheque. Here is when you will need a cheque bounce lawyer in Mumbai who can help you through this mess. The consequences can be imprisonment too for a term not more than two years or both.
The notice issued by RBI defines those customers whose financial activities heavily revolve around cheques and need to have a decent bank balance. If the customer is unable to obtain a minimum balance, they will have to deal with the penalty laid by the law.
Reason for cheque bounce
What are the possible reasons which can result in the cheque bouncing? The reason can be endless, and it can lead to dishonouring of your cheque after you’ve submitted it to the bank. Here is a list that can help you understand the possibilities.
Signature
One of the most common reasons for a cheque to bounce is the signature. If the signature of the drawer is missing, the cheque will get rejected. Even if the signature is different with the original one recorded in the bank, it will be rejected.
Validity of the cheque
There is an expiry on the cheque, usually three months. And, if you present the cheque after its expiry or the validity period, it will bounce.
Insufficient balance
There are chances where the drawer has stated a hefty amount in the cheque. And the possibility is that the amount in the cheque is way more than what is in your bank. If you are running short of money in the bank, the cheque will get bounced, and this is because you don”t have sufficient funds to draw the money.
Modifications or alterations
If, without the consent of the drawer, there are modifications or alternations in the cheque. There can be complications in the cheque, which can result in bouncing.
Amount
There can be any discrepancies in the amount you”ve written on the cheque. The figures on the cheque and the words written may lead to the cheque getting bounced.
Account number
There may be situations where the cheque does not represent the account number of the drawer property. The account number could be missing, blurred, or not legible. It has to be one of the most common problems resulting from the bounce.
Name
Suppose the drawer or the stated account payee”s name doesn”t match with the name of the payee”s bank account. There are high and definite chances of the bounce occurring!
Overwritten
It is often the most common error since humans make errors. It can happen when you have written the wrong number in the amount, and you cancel the amount or overwrite it. It will automatically get bounced if you”ve scribbled or overwritten something on the cheque. You have to get a new cheque and write everything fresh and clear. The bank does not access cheques which have confusing elements in them.
How a cheque bounce lawyer can help
You may be wondering whether you need a cheque bounce lawyer in Mumbai or not for a situation like this. Often, people don’t realise that a case like this is a criminal offence. Even though you may or may not be at fault, a criminal tag against your name can ruin your life. But, with the help of advocates, you are in a safer and better position.
To recover the amount
If anyone has paid you through a cheque, it has been dishonoured/bounced. It is essential first to ask the lawyer why this incident happened, which can be due to many reasons. Once you understand the drawer is not cooperative, you can contact a lawyer. A cheque bounce lawyer will help you recover the amount, and the lawyer will take necessary action and legal measures by aligning to section 138 of the Negotiable Instruments Act.
Notice
Notifying the drawer if their cheque has bounced or dishonoured is essential. With that, before appealing to the court and taking legal action, you must seek views from the drawer. The lawyer will help you in issuing a statutory notice to the drawer. Before you move further with any steps, they will send a notice to the drawer to ask their opinion. The cheque bounce lawyer in Mumbai will act like a pleader for you when they file the petition.
Penalty Negotiation
Lawyers are crucial case breakers who get involved in the case a little deep. A case like this may include the payee and receiver being sued. So, these professionals guide you in using an overdraft account to get you out of this situation. They also help and settle the case by adequately following the legal procedure. They negotiate a fair deal, so you don”t have to pay hefty fines.
Protects you from legal trouble
Don”t forget, cheque bounce and dishonour entail criminal charges in India. If you”ve issued a cheque for someone and it has bounced, you may be worried about legal consequences. You will get a court summons under section 138 of the Negotiable Instruments Act.
You’ll be in a legal mess if you don’t take action seriously. And without legal knowledge, there are high chances you require an expert. Hiring a cheque bounce lawyer is the best decision to protect yourself from the huge liability.
Warding off criminal charges from the bank
The financial institution often presses criminal charges whenever there is a cheque bounce case. And, once the criminal charges are against your name, you can expect problems throughout your life.
The last thing you want is living with the charges under section 138. And, in a situation like this, lawyers can ward off the charges against your name. The lawyer will help you readily eliminate the situation by clearly looking at your case and verifying everything related to the transaction, amount, date, and name. They will help you get out of the legal mess and clear off your name.
Filing a countercase
There are many cases in which someone has charged or filed a false cheque bounce case against the payee. In a situation like this, the cheque bounce lawyer in Mumbai is the one who understands and removes you from the mess. If you are blamed for a false case like this, it is essential to know that you can file a case against the bank. You have the right to seek compensation and expenses for dealing with a false accusation.
Advocates are the ones that will help in filing a defamation case, and they will verify the situation and accordingly file a counter case.
Conclusion:
Cheque bouncing has been a common occurrence for years in India. And regardless of any circumstances, it is crucial not to take this matter lightly. If there”s a cheque that has bounced or, in some cases, got summoned to court.
There is no better option than to seek help from a cheque bounce lawyer in Mumbai who can help you. The last thing you want is a criminal tag against your name.
Imagine, criminal charges regarding finances can bring a lot of trouble in your life. In the future, banks won”t offer you a loan; you will have difficulty finding a job or even using credit cards. All this can happen if you fail to get in touch with a lawyer since they are known to get you out of the legal mess.
