I will not pay a penny, do what you want to do……… I will sue you… I will see you in court… I will make sure to put you behind bars. Harsh words, but very common in money disputes. Giving and receiving payments through cheques is very common in Indian businesses. But since it is not a direct currency, but another negotiable instrument, a document that in some way promises payment at a later time, things often lack a sense of confirmation. In order to give a sense of security to persons receiving monetary transactions through cheques, section 138 of the Negotiable Instruments Act was brought in. It provides a way to make payments through check sticks in the middle. What happens when a check bounces in India? More importantly, can I file a police complaint for the cheque? Learn right here on this page.
How to complain to the police if the check bounced?
If a person receives a check which has been returned by the bank due to insufficient funds, a legal notice should be sent to the drawer of the check within the time limit of the check bounce case. If the payment is not made within the time limit given by way of that notice, then the cause of action commences. Such aggrieved person in whose favor the said check was dishonored, may proceed legally, provided that the fact of check bounce is not covered by the Negotiable Instruments Act,
It is to be noted that though the new check bounce rules in India are criminal in nature, however, a person does not file a check bounce police complaint. A complaint u/s 138 NI Act, 1881 should be lodged with the Magistrate of proper jurisdiction. Even if a person approaches with the sample police complaint letter for check bounce, the officials can record their diary entry and send it to the concerned magistrate. In such a situation, if people feel that if the check bounces, they will be sent behind bars overnight, then it is not right. Even if the payee (in whose favor the check is drawn) or the officers are harassing the arrester, a police complaint for dishonored check cannot arrest anyone unless there is some other serious allegation. If the case regarding default in payment through cheque is proved before the court and the person is not paying the amount, Imprisonment cannot be avoided in such a case.
Section 420 in check bounce
The check bounce provision under section 138 of the NI Act specifically deals with dishonor of a check due to insufficiency of funds and even courts favor repayment over imprisonment. But if the complainant is the victim of fraud due to the fraudulent action of the drawer, then in such cases the process may take a turn. Cheating (under section 420 of the Indian Penal Code, 1860), Criminal breach of trust (Section 406 of IPC) can be invoked with confirmation from check bounce lawyers. This can be understood with an example. If a person issues a post-dated cheque, one never knows what may happen in the future and some financial stress may ensue. However, there is another scenario in which a person is making a check which should go for immediate encashment, along the same lines some valuables are taken, and the same is dishonored. Initially the drawer’s bad intention to cheat the other person can be inferred. Here someone who could have established a trustworthy business relationship has been cheated. In such cases, a cheque bounce police complaint is registered under section 420 and 406 along with section 138 NI Act.
Check Bounced – Fraud and Double Jeopardy
The concept of double jeopardy is that a person should not undergo legal trial/prosecution twice for a particular act/offense. Article 20(2) of the Constitution of India prohibits this practice and a person has a fundamental right against it. Here the question arises whether section 420 creates double jeopardy in case of check bounce u/s 138 of NI Act?
The answer has recently been provided by the Karnataka High Court in the case of Rashmi Tandon  and even the Gujarat High Court in the Sangeeta Ben Patel case . Hon’ble High Courts have clarified that registration of criminal cases under sections 406, 420 of the Indian Penal Code, 1860 is not barred in the name of double jeopardy. The gist is that a guilty mind is not necessary under section 138 of the Negotiable Instruments Act, 1881. Even if a person has by mistake drawn a check which has been dishonored and is currently unable to pay the amount, legal action can be taken. However, if all this is done is to deceive another person into believing that there is a sufficient amount in the account and profit has been received on that note, then it becomes a punishable offense. Thus, In such cases a police complaint of check bounce will not in any way amount to a case of double jeopardy.
Check Bounce Police Complaint Related FAQs
Q- Can an FIR be lodged if a check bounces?
A- Under Section 154 of the Code of Criminal Procedure, 1973, an FIR or First Information Report can be registered for offenses which are of a serious nature and allow the police to arrest without warrant. Normally in check bounce cases, FIR is not registered when the facts come to the fore. Due to which the police may need to register it under section 154 of CrPC 1973.
Q- Can the police take action if the check bounces?
A- If it is only a case of dishonor of check u/s 138, the police may not even file a complaint or refer the matter to a magistrate for criminal complaint. In check bounce cases, the police usually come into play when the defendant (the payee of the check paid to the complainant) is absconding from the court and a non-bailable warrant has been issued. In such a case the police officers are required to ensure the presence of the defendant during the proceedings.
Q- What is the time limit for filing a check bounce case?
A- Common people are often confused about how to complain about check bounce. If I have received a bounced check in a particular jurisdiction, I need to contact my nearest banking lawyers to send a legal notice in this regard to the payee of the check within 30 days of dishonor. Further time of 15 days is given to respond to the notice through notice and pay the requisite amount. Within 30 days from the end of the 15 day notice period, a police complaint can be filed to initiate court proceedings.
Q- How do you take legal action on bounced cheques?
A- The process of check bounce cases in India begins with a bounced check due to insufficient funds in the drawer’s account, which was drawn in furtherance of a legal obligation. The person should give a legal notice in this regard to the payee giving the deadline to repay the amount. At the end of such a period, a police complaint for a dishonored check can be lodged. If the facts of the case permit, additional provisions like section 420 for cheating in check bounce may be invoked, for more infromation you can contact legaltax here are solution for all of you queries