Filing a cheque bounce complaint in court involves a structured legal process under the provisions of the Negotiable Instruments Act, 1881, particularly Section 138. This section deals with the dishonor of cheques due to reasons such as insufficient funds, closure of the account, or other specified reasons. Here’s a detailed guide on the procedure, jurisdiction, and penalization aspects involved in filing a cheque bounce complaint:
1. Legal Provisions Regarding Jurisdiction
Jurisdiction in cheque bounce cases is determined by several factors, primarily guided by Section 142(2) of the Negotiable Instruments Act, 1881, as amended by the Negotiable Instruments (Amendment) Act, 2015. The jurisdiction can be understood as follows:
- Place of Presentation: The complaint can be filed in the court where the cheque was presented for encashment, i.e., the location of the bank branch where the payee or holder maintains an account.
- Place of Dishonor: The complaint can also be filed where the cheque was dishonored, which is usually the location of the drawee bank (the bank where the drawer holds the account).
- Place of Issuance of Notice: In some cases, courts have also considered the place where the statutory notice was issued as relevant for jurisdiction.
- Supreme Court Guidelines: The Supreme Court of India has clarified that the complaint can be filed where the complainant’s bank (where the cheque was presented) is located. This ensures that the complainant does not have to travel to the location of the drawer’s bank.
2. Procedure for Filing a Cheque Bounce Complaint
The procedure for filing a cheque bounce complaint is systematic and involves the following steps:
Step 1: Issue a Legal Notice
- Timeline: Upon receiving the information about cheque dishonor, the payee must issue a legal notice to the drawer within 30 days.
- Content: The notice must demand the payment of the cheque amount within 15 days of the receipt of the notice. The notice should clearly state the details of the cheque, the reason for dishonor, and the consequence of non-payment.
- Mode of Delivery: The notice should preferably be sent via registered post with acknowledgment due or through a reliable courier service, ensuring proof of delivery.
Step 2: Filing the Complaint in Court
If the drawer fails to make the payment within 15 days of receiving the notice, the payee can file a complaint in the court. The steps involved are:
- Drafting the Complaint: The complaint should include the following details:
- Information about the cheque (number, date, amount).
- The date when the cheque was presented and dishonored.
- The date when the legal notice was issued and served.
- The failure of the drawer to make the payment within the stipulated time.
- Documents Required:
- Original cheque.
- Bank’s cheque return memo.
- A copy of the legal notice issued.
- Proof of service of the notice.
- Filing Timeline: The complaint must be filed within one month from the expiry of the 15-day notice period. If the complaint is not filed within this period, the right to prosecute may be forfeited, although courts may condone delays in certain circumstances.
Step 3: Court Proceedings
- Summons Issuance: Upon receiving the complaint, the court will issue summons to the accused (drawer). The accused must appear before the court on the specified date.
- Trial Process:
- Both parties (complainant and accused) will present their evidence and arguments.
- The complainant must prove that the cheque was issued for a legally enforceable debt or liability.
- The accused has the opportunity to defend themselves by questioning the validity of the cheque, the debt, or the compliance with procedural requirements.
Step 4: Judgment and Penalization
- Conviction: If the court finds the accused guilty, it can impose the following penalties under Section 138:
- Imprisonment: The accused can be sentenced to imprisonment for a term which may extend up to two years.
- Fine: A fine that may extend to twice the amount of the cheque can be imposed.
- Compensation: The court may order the payment of compensation to the complainant, usually equivalent to the cheque amount, if not more.
- Acquittal: If the accused is acquitted, the case is dismissed, and no penalties are imposed.
3. Penalization in Cheque Bounce Cases
Penalization for cheque bounce under Section 138 is intended to deter the misuse of cheques and ensure that the drawer is held accountable for dishonoring a cheque. The penalties include:
- Imprisonment: A jail term of up to two years can be imposed on the accused. The duration depends on the gravity of the offense and whether it is a repeat offense.
- Monetary Fine: The fine imposed can be up to twice the cheque amount. This is intended to compensate the complainant for the inconvenience and financial distress caused.
- Compensation: The court may also order the accused to pay compensation to the complainant. This compensation is often the cheque amount and may include additional costs as deemed appropriate by the court.
Conclusion
Filing a cheque bounce complaint is a legal process governed by strict procedural rules under the Negotiable Instruments Act, 1881. Understanding the jurisdiction, following the correct procedure, and being aware of the potential penalization can ensure that the complainant effectively pursues the case. Proper legal guidance and timely action are crucial in such cases to secure a favorable outcome.
Disclaimer: This information is intended for general guidance only and does not constitute legal advice. Please consult with a qualified lawyer for personalized advice specific to your situation.
Adcocate J.S. Rohilla (Civil & Criminal Lawyer in Indore)
Contact: 88271 22304