The Role of the Bank in Cheque Bounce Cases

What is Cheque Bounce and Its Implication

That cheque which is tendered at a bank for clearance and is rejected or which the bank declines to honor is referred to as a bounced cheque. This situation is quite demoralizing especially to the drawer of the cheque and the payee of the cheque. Cheque bounce cases do result in legal issues easily filed whenever the payee decides to go legal under section 138 of the Negotiable Instruments Act, 1881 regarding dishonor of cheques.

Role of Bank In Cheque Bounce Cases

• Cheque Processing: A bank’s basic function is to clear the cheque and check whether it is possible to encash it as per the amount provided in the drawer’s account. If the cheques are bouncing, for such reasons as, there are no funds in the account, or there are problems with details on the cheque such as the signature, then the cheque is returned with the reason of the bounce from the payee’s bank.
• Issuing a Memo: When a cheque is dishonoured the bank sends memo or a return memo to the payee’s bank stating the cause of dishonour. This is the initial process in checking the cheque bounce procedure. The payee will receive this information that could be valuable depending on whether to take the matter to the law.
• Providing Evidence: When the case is of cheque bounce, the role of the bank in setting the proof of dishonor becomes crucial. The payee’s bank may need to demand some documents from the drawer’s bank such as the return memo in order to determine the reason of the bounce. This evidence can be tendered in court to support the claim so as to warrant the prosecution to be shown the door.
• Serving Notice: The bank does not send notice but the details given by it can be often useful in legal procedures. The bank can also help confirm whether the details of the cheque such as an account number is authentic or whether the cheque was deposited beyond the right time.
• Depositing the Cheque: News to the fact that when the payee decides to present the bounced cheque for re-presentment, the bank may attempt to process the cheque again if a request for it has been made. But, if the problem continues (say, lack of funds), the bank will recall the cheque and give a memo to that effect. This further strengthens the case of the payee if he or she will decide to engage the defaulter in a court of law.

Steps in the Cheque Bounce Procedure

• Cheque Return: As mentioned, the first step in the cheque bounce procedure is when the cheque is returned due to insufficient funds or incorrect details.
• Legal Notice: Once the cheque is returned, the payee must send a cheque bounce legal notice to the drawer, informing them of the dishonour and demanding payment within 15 days. If the payment is not made, the payee can file a complaint under Section 138 of the Negotiable Instruments Act.
• Filing a Complaint: If the drawer fails to respond to the cheque bounce legal notice, the payee can file a case in court. It is highly recommended to consult with cheque bounce case lawyers Noida or cheque bounce case lawyers Delhi to guide you through this process. These lawyers specialize in handling cheque bounce cases and can help ensure that all the necessary documentation and evidence are in place.

How Lawyers Can Help

Cheque bounce case lawyers Noida and cheque bounce case lawyers Delhi are specialists in handling cheque bounce cases. These legal professionals have experience in navigating the complexities of the cheque bounce procedure and can provide crucial assistance at every stage of the case. Here’s how they can help:

• Guidance on Documentation: Cheque bounce case lawyers will ensure that all documentation, such as the return memo, the original cheque, and other relevant evidence, is properly compiled for the court case.
• Ensuring Timely Action: The lawyer will ensure that the cheque bounce legal notice is sent within the specified time frame and that the entire legal process is carried out efficiently and within the limits of the law.

LawChef provides comprehensive cheque bounce legal services, helping clients navigate the complexities of the legal process efficiently. They offer expert consultation and representation to those facing cheque bounce issues.

Conclusion

Therefore, the function of the bank in cases of cheque bounce is important in the management by holding and processing the cheque and assisting in presenting evidence and the reason for the bouncing of the cheque. But it does not end here. If you want to get justice in the cheque bounce case it is imperative that you consult the cheque bounce case lawyers Noida or cheque bounce case lawyers Delhi. These lawyers are experienced and professional lawyers in cheque bounce procedures and they can advise and also defend in court to recover the bounced cheque amount and to dodge further problems. In fact, it is essential to understand the operation of the bank and get legal advice from practising lawyers so that payees know how best to approach cheque bounce cases and get a positive outcome.