The notice should state that the cheque amount must be paid to the payee within 15 days of receiving the notice. Dishonour of cheque is a criminal offence which is punished with fine or imprisonment or both. Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid. Jan 21, 2016 a cheque is said to be honoured, if the banks give the amount to the payee. The trial court held that the complainant had no source of income to lend a sum of rs. It enables the beneficiary to send a notice to the cheque issuer under section 8 of the negotiable instruments act, within 30 days of cheque returnnonpayment. Section 8 notice can be used when a cheque has bounced or payment wasnt received. The negotiable instruments act, 1881 is applicable for the cases of dishonor or bouncing of cheque. If the cheque issuer fails to make a fresh payment within 30 days of receiving the notice, the payee has the right to file a criminal complaint under section 8 of the negotiable instruments act. Because if your signature not matching with your bank record and cheque got dishonoured then it will be a offence under the section 8 of negotiable instrument act. Section 8 of the act states that any bounced cheque is punishable. The parliament in its wisdom had chosen to bring section 8 on the statute book in order to introduce financial discipline in business dealings.
As per the rbi guidelines, banks can stop issuing cheque book facilities. Section 8 cheque dishonor notice what is section 8 notice. Cheque dishonour archives supreme court of india judgements. Unless there is delivery of cheque, no liability could be fastened on the drawer read the order. Section 8 of nia provides that the dishonour of the cheques for the reasons. Cheque dishonour dishonour of chequeoffence by companycompany not arraigned as an accusedhigh court was wrong in observing that the company can now be proceeded againsthigh court. Section 8 b of the negotiable instruments act, 1881 provides for the notice of dishonour. We put up a notice 5 months back in hyderabad court against one of our clients in bangalore for non payment of one of our bill against pdc. But at the same time with the arrival of cheque system the problem of its dishonoring was also started. According to section 8 of the negotiable instruments act. Definition the negotiable instruments act, 1881 makes the dishonour of cheques a criminal offence. Dishonour of a negotiable instrument legal steps to take.
The negotiable instruments act, 1881 require that the payee should follow a certain procedure to claim relief under section 8 the steps to be taken by the payee for recovery of the cheque amount are as under. Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to. Cheque is the most common mode of making the payment. The remedy available in civil court is a long drawn matter and an unscrupulous. Apr 24, 20 this article on dishonour of cheque section 8 of the negotiable instruments act gives a comprehensive overview about all aspects of cheque bouncing and cheque dishonour as per laws in india. Also, the bank has the right to stop the cheque book facility and close the. Negotiable instruments act, 1881 on dishonour of security. The dishonour of a cheque due to stopped payment is also covered under. Source of income of complainant has to be proved in 8 ni. Sep 27, 20 liability of dishonour of cheque 10 14 3. Section 8 of negotiable instruments act legal helpline. Section 6 of negotiable instruments act defines cheque as. Jun, 2017 the petitioner had instituted two complaint cases they having been registered as complaint case nos. May 06, 20 20052 dishonour of cheque reporter dcr 0169.
Section 8 is a provision which rules the cases of dishonour of cheques, wherein the criminal as well as monetary liability is imposed on the drawer of such dishonoured cheque. The bank also has the right to stop the cheque book facility and close the. The cheque was presented by y to his bank in kolkata. In addition to this, the bank has right to stop the cheque book facility and close the account for repeat offences of bounced cheques. Dec 06, 2019 section 8 allows for the prosecution of the drawer in case of cheque bouncing and the offence is punishable with a maximum of 2 years imprisonment and is liable for the imposition of fine. If the check is dishonored yet again, you dont need to give an additional. May 18, 2019 section 8 of negotiable instruments act has been introduced in the statute book to bring stringent provisions pertaining to financial discipline in business dealings.
Cheque bounce dishonour us 8 of negotiable instruments act, 1881. Signature on the cheque does not match that in the bank records. In other words, dishonour of cheque is a condition in which bank refuses to pay the amount of cheque to the payee. Quashing the proceedings against the petitioners, the high court of madras held that a complaint under section 8 of the negotiable instruments act, 1881 the act, cannot be. Prior to insertion of section 8 of the negotiable instruments act, a dishonored cheque left the person aggrieved with the only remedy of filing a claim. Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank. Section 8 has converted civil liability into criminal offence. As per section 8 of the ni act, where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for. That the complainant company had sent a registered legal notice to the accused no. Act respecting two different cheques they being cheque nos. Moreover, according to rbi guidelines, banks can stop issuing cheque book facilities to any customer booked for a bounced cheque.
But a bill may also be despoiled by nonacceptance because bill of disagreement is the only negotiable instrument which supplies its presentment for acceptance and nonacceptance thereof. Section 8 makes dishonour of cheque in certain cases an offence. The drawer pays off his lability to the payee through cheque and when bank returns the cheque unpaid due to insufficient balance on the account held by the drawer, the liabilitydebt remains due to the drawer and the amount remains unpaid. Format of complaint in section 8 cheque dishonour case. Effect of lost stolen cheque on cheque bouncing 8 ni act case. Dishonour of cheques section 8 of negotiable instruments. Section 8 of negotiable instrument act deals with cheque bounce punishment. Sep 15, 2016 if your cheque is dishonoured due to any reason you are in trouble at the outset, i wish to make it clear that i wont go into the details pertaining to section 8 of the negotiable instruments act ni act which comes into play whenever is a cheque is dishonoured. Supreme court has held time and again that a cause of action for filing a complaint under section 8 accrues to the drawee of a cheque only after a notice is issued to the drawer within the prescribed period after receipt of information by him regarding the dishonour of cheque and the subsequent failure of the drawer to make the cheque payment within the prescribed time, i. If the cheque issuer discontents to make a new sum within 30 days of receiving the sign, the payee has the exact to file a banned grievance under section 8 of the negotiable instruments act. Sep 16, 2019 cheque bounce dishonour us 8 of negotiable instruments act, 1881.
According to section 8 of the act, the dishonour of cheque is a criminal offence and is punishable by imprisonment up to two years or with monetary penalty or with both. On dishonour of cheque, collect the dishonoured cheque and cheque return memo from the bank immediately. The remedy available in civil court is a long drawn matter and an unscrupulous drawer normally takes various pleas to defeat the genuine claim of the payee6. Section 8 deals with the procedure and preconditions before filing a criminal complaint before the judicial magistrate. If your cheque is dishonoured due to any reason you are. The section just following section 8 that is section 9 contains the words. When you have informed the person about the dishonour of the cheque, in case the information is given within 30 days from the dishonour of the cheque, you can file a complaint under section 8 of negotiable instrument act within one month after the expiry of notice period of 30 days. Cheque bounce is a criminal matter and is tried under section 8 of negotiable instruments act, 1881. Under section 8, the aggrieved party may send you a legal notice first. The petitioner had instituted two complaint cases they having been registered as complaint case nos. Section 8 of negotiable instruments act has been introduced in the statute book to bring stringent provisions pertaining to financial discipline in business dealings. As per section 8 of the negotiable instruments act, the drawer could be jailed for up. A cheque is a bill of exchange drawn on a specified banker. Though, the grievance should be listed in a judges court within a month of the termination of the notice period.
The cheque should have been issued for the discharge, in whole or part, of any debt or. If imprisonment is pronounced to the drawer, it may extend to two years. If its a company the managing director can be personally prosecuted under section 141. Whenever the cheque is dishonoured, the drawee bank.
A fine which may extend to twice the amount of the cheque, or with both. We presented the pdc cheque twice here which got dishonored. According to the provisions of section 8 of the act, you must send a legal notice to the defaulter upon cheque bounce. Dishonour of cheque section 8 of the negotiable instruments act. If you are also the one who submitted the cheque to the bank and the issued cheque becomes a bounced cheque just follow the guidelines given below and take the right action under section 8. Cheque bounce charges punishment and penalty related to. Negotiable instruments act, 1881, section 8 dishonour of cheque appeal was pending and matter settled in lok adalat in acknowledgment of liability of. Within 30 days from the date of dishonour of the cheque, send. A cheque is said to be honoured, if the banks give the amount to the payee. Section 8 allows for the prosecution of the drawer in case of cheque bouncing and the offence is punishable with a maximum of 2 years imprisonment and is liable for the imposition of fine. In order to duly protect the interest of its payee, holder in due course, there is an attempt to discourage dishonour of a cheque by making it an offence. It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 8 for the discharge, in whole or in part, of any debt or other liability.
Mar 10, 2018 cheque bounce is a criminal matter and is tried under section 8 of negotiable instruments act, 1881. Once the cheque is bounced, the bank returns the cheque to the drawer with a return memo which mentions the reason for a bounced cheque. Because if your signature not matching with your bank record and cheque got dishonoured then it will be a offence under the. The monetary penalty for dishonour of cheque may be twice the amount of the cheque. In india for cases related to cheque bounce, provisions are given under section 8 of negotiable instrument act, 1881. The complaint for cheating is not maintainable legally. Your free access to live law has expired to read the. In place of bundle of notes a piece of cheque is much easier to carry. A person who commits an offence under section 8 may be punished as under. Mar 01, 20 the offence under section 8 of the negotiable instruments act will be attracted only if the cheque is returned by the bank unpaid either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid for from the account by an agreement made with the bank. Cheque dishonor notice section 8 sample format document. If the drawer still fails to pay money to the payee within 30 days of receiving the notice, the payee has full right to file a criminal report against the drawer as per the section 8 of the negotiable instruments act, 1881.
Cheque, section 8 of negotiable instrument act, 1881, banking system, dishonor i. If your cheque is dishonoured due to any reason you are in. Sep 16, 2017 the apex court in a recent judgement held that any failure to include the company as an accused in the complaint, filed for dishonor of cheque section 8 of the negotiable instruments act, 1881 of dishonour of a cheque issued by a company, would be fatal to the prosecution of such company even if the complaint filed against the signatory of. The petitioner has filed the present petition seeking leave to appeal against the judgment dated 21. In the absence of any such provision a dishonour whether based on a second or any successive presentation of a cheque for encashment would be a dishonour within the meaning of section 8 and clause a to proviso thereof. Cheque dishonour section 8 complaint not maintainable if. According to section 8 of the act, the dishonor of cheque is a criminal offense and is punishable by imprisonment up to two years or with monetary penalty up to twice the amount of the check or with both. There is no dispute that the dishonoured cheques bear the signature of respondent no. Negotiable instruments act, 1881 on dishonour of security cheques. Section 8 of negotiable instruments act legal helpline india. The legal notice must be sent through the registered post within 15 days of the cheque bounce and the receipt of the same must be retained by you for the purpose of proof. Dishonoured means returned normally when the cheque deposited by anybody for collection or presented for payment at the teller counter, the banker makes payment of the cheque subject to several conditions.
A cheque is a bill of exchange drawn on a specified banker and not expressed to be. And in cheque transaction many times we hear that a cheque becomes a bounced cheque or dishonoured. If after the receipt of cheque bounce legal notice, the cheque is again presented as requested by the drawer and if the cheque gets dishonored again it does not extend the timeline of. Apr 18, 2019 notice issued under section 8 of the ni act has to be only for the cheque amount and not for any other amount more than the cheque amount. The cheque was drawn on a bank of 2 the customers may obtain a new cheque book when the old one is finished mumbai. The drawers bank may also stop the check book facility to him and close the. Dishonor by nonacceptance section 91 a little kind of negotiable tools, i.
A complaint under section 8 can be made not only when the cheque is dishonoured for reason of funds being insufficient to honour the cheque or if the amount of the cheque exceeds the amount in the account, but also where the drawer of the cheque instructs its bank to stop payment. Prior to insertion of 8 of ni, a dishonored cheque left the person aggrieved with the only remedy of filing a claim. It states that the payee or holder in due course of the cheque as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of cheque, within thirty days of the receipt of information by. Cheque bounce dishonour us 8 of negotiable instruments. Notice issued under section 8 of the ni act has to be only for the cheque amount and not for any other amount more than the cheque amount. The cheque on presentment was dishonoured on the ground of want of sufficient funds. The offence under section 8 of the negotiable instruments act will be attracted only if the cheque is returned by the bank unpaid either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid for from the account by an agreement made with the bank. The payee then has to intimate the drawer about the legal proceedings within a 30 day period of receiving the cheque return memo wherein should be stated. Section 8 of the negotiable instruments act is a penal provision wherein if a person draws a cheque on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part of any debt or other liability, is returned by the bank unpaid, on the ground. Dishonor of cheque section 8 covers the provision for dishonour of cheques for insufficiency etc. If your cheque is dishonoured due to any reason you are in trouble at the outset, i wish to make it clear that i wont go into the details pertaining to section 8 of the negotiable instruments act ni act which comes into play whenever is a cheque is dishonoured. Cheque dishonored practical guide to fight cheque bounce. Section 8 of the act states that any bounced cheque is punishable under the act.
And it can lead to up to two years of imprisonment, a monetary refund or both. According to section 8, cheque dishonour is a criminal offence and is punishable with imprisonment up to two years or with monetary penalty or with both. This article on dishonour of cheque section 8 of the negotiable instruments act gives a comprehensive overview about all aspects of cheque bouncing and cheque dishonour as per laws in india what is a cheque. In accordance with section 8 of this act, dishonour of cheque is a criminal. Time limit of filing case against cheque bouncing lawrato. The approach adopted by the best advocates for cheque bounce dishonor cases. The high court clearly held that if a cheque is issued for a time barred debt and it is dishonoured the accused cannot be convicted under section 8 of the n.
505 1429 913 1075 919 1541 607 1367 729 945 546 414 1379 1177 960 555 696 130 1248 1289 109 1382 1099 1156 698 1075 625 611 455 113 367 429 292 128 613 1331 572 258 764 186 796 1307 783 702 1075 483 326