Legal Question in Banking Law in India

cheque bounce

what happens when a person with bounced cheque redeposites it in the same bank and after files a suit under section 138 of Negotiable INstruments Act, 1881?


Asked on 9/03/07, 7:03 am

1 Answer from Attorneys

Vijay Chandavale Advocate Vijay Chandavale & Associates

Re: cheque bounce

when the cheque is bounced and notice of demand is issued within a period of 30 days the drawer has to make payment of such demanded cheque within 15 days thereof . If such drawer fails the payee or holder in due course can file complaint u/s 138 of NI Act. However if no notice of bouncing and demand is made cheque is deposited on several occassions till it is not stale the payment can be sought of such cheque . once notice is issued for demand of bounced cheque limitation as stated above starts. In case a person filed complaint u/s 138 and after filing the case he deposit the cheque he can seek the payment however in such case for subsequent bouncing no fresh case can't be there u/s 138 moreover the payee can well take stand of payment subsequent to filing of case . Under Section 138 as a matter of right the payee can't claim payment of cheque in the case . It is fine and punishment which gives fear in the mind of drawer which forces him to make payment . The payee can simulateausly proceed under 138 as well as under Civil Suit for recovery of cheque and other defaulted amount

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Answered on 9/03/07, 11:49 pm


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