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Cheque Bounce Case – Meaning, Section 138, Legal Process & Punishment (Complete Guide)

Introduction

In today’s financial transactions, cheques are widely used. However, many people face serious legal trouble due to cheque bounce, check bounce case, or bounced cheque issues.
If a cheque is dishonoured, it may lead to criminal liability under Section 138 of the Negotiable Instruments Act, 1881.

This article explains cheque bounce meaning, check bounce case process, legal notice, time limits, punishment, and cheque bounce charges in simple language.

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What is Cheque Bounce? (Cheque Bounce Meaning)

A cheque bounce occurs when a bank refuses to honour a cheque and returns it unpaid. This situation is commonly referred to as:

• Cheque Bounce
• Check Bounce
• Bounced Cheque
• Bouncing of Cheque

Common Reasons for Cheque Bounce

• Insufficient funds in the bank account
• Signature mismatch
• Account closed
• Expired or post-dated cheque
• Overwriting or damaged cheque

When this happens, the bank issues a Cheque Return Memo stating the reason for dishonour.

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Is Cheque Bounce a Criminal Offence?

Yes. A cheque bounce case is a criminal offence under Section 138 of the Negotiable Instruments Act, 1881, provided certain legal conditions are fulfilled.

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Conditions for Section 138 Cheque Bounce Case

For a check bounce case to be valid under Section 138:

1. The cheque must be issued for a legally enforceable debt or liability
2. The cheque must be presented to the bank within 3 months
3. The cheque must be returned unpaid
4. A legal notice must be sent within 30 days of cheque bounce
5. The drawer must fail to pay the cheque amount within 15 days of receiving notice

If all conditions are satisfied, a cheque bounce case can be filed in court.

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Cheque Bounce Case Legal Process (Step-by-Step)

Step 1: Cheque Dishonour

The bank returns the cheque with a return memo.

Step 2: Legal Notice

The payee sends a legal demand notice within 30 days.

Step 3: Waiting Period

The drawer gets 15 days to make payment.

Step 4: Filing the Case

If payment is not made, a cheque bounce case is filed before the Judicial Magistrate First Class (JMFC).

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Punishment Under Section 138 (Cheque Bounce Case)

If found guilty, the court may impose:

• Imprisonment up to 2 years, or
• Fine up to twice the cheque amount, or
• Both imprisonment and fine

In many cases, courts prefer compensation and settlement over imprisonment.

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Cheque Bounce Charges (Bank Charges)

Banks also impose cheque bounce charges, which vary depending on the bank:

• ₹150 to ₹750 per bounced cheque
• Charges are deducted from the account holder
• Negative impact on credit score

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Defences Available in a Cheque Bounce Case

An accused can defend a check bounce case on grounds such as:

• Cheque was given as security
• No legally enforceable debt existed
• Improper or invalid legal notice
• Forged signature
• Case filed beyond limitation period

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Cheque Bounce Case Time Limits

Legal Stage	Time Limit
Cheque presentation	3 months
Legal notice	Within 30 days
Payment after notice	15 days
Filing complaint	Within 30 days

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Frequently Asked Questions (FAQs)

What is cheque bounce?

Cheque bounce means dishonour of a cheque due to insufficient funds or other technical reasons.

How long does a cheque bounce case take?

Usually 6 months to 2 years, depending on court workload and evidence.

Can a cheque bounce case be settled?

Yes, cheque bounce cases can be settled through compromise or mediation.

Can arrest warrant be issued in cheque bounce cases?

Yes, if the accused fails to appear before the court.

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Conclusion

A Cheque Bounce Case is a serious legal matter that can lead to criminal consequences under Section 138. Both cheque issuers and recipients must act carefully and follow legal timelines strictly. Early legal advice can help avoid severe punishment and financial loss.

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