What Happens if the Check Bounces in India? Know the Answer Here!

If you've ever had a check bounce in India, you know it can be a frustrating experience. The number of cheque bounce incidents has increased relatively fast in recent years. Usually, these are criminal offenses. If their cheques bounce, the payers are made criminals. People often are unaware of the legal parameters involved in cheque bounce cases. To safeguard their interests, bank customers can keep in touch with knowledgeable banking lawyers near me.

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But what happens if the cheque bounces in India? Knowing the answer to this question is important! This post can help you a lot in getting the answer. Let's take a look:

What does the term ‘Bounced Check’ stand for?

The term ‘bounced check’ stands for a dishonored cheque. Usually, the banks return this cheque to the payee if the payer does not have enough balance. They cannot process them because the account holder has insufficient funds. However, the experts consider a few more issues with the account.

Notification Issued by the Bank: When a pay cheque bounces, the bank notifies the issuer (the person who wrote it) and the recipient (who was supposed to receive the money). However, their roles and impacts vary in the reverse manner, and their responsibilities also vary in the reciprocal manner.

Monetary Penalties for the Issuer: The issuer of the bounced cheque may face financial penalties, which can vary. Usually, the bank charges a fee or initiates legal action if the payer does not complete the required legal parameters. The recipient can even start a legal procedure against the payer. The consequence can be bad for the payer.

Legal Initiatives: In India, issuing a check that bounces is a criminal offense under the Negotiable Instruments Act of 1881. The recipient of the bounced check can file a complaint with the police, which may result in the issuer facing fines or imprisonment.

Cheque Bounce Case: If the recipient decides to pursue legal action, they can file a cheque bounce case in court. The court will then issue a summons to the issuer, who must appear in court to defend themselves.

Resolution: To avoid any legal action for a cheque bounce case, you must contact the best banking lawyers near me. The issuer can try to resolve the issue by paying the recipient the amount owed plus any additional fees or penalties.

Worsening Impact on Credit Score: Bouncing a check can damage the cheque-payer's credit score. The incident has a negative impact on the issuer's credit score, making it harder for them to access credit in the future. Every cheque user must know the impact to avoid impacting their credit score.

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The Bottom Line:

This post defines what happens if a check bounces in India. If you use cheques to pay your clients, you must be aware of the consequences. You must always ensure that you have sufficient funds in your account before issuing a check to avoid the inconvenience and potential legal consequences of a bounced check.

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