The check bounce notice informs the issuer that the check beneficiary will take legal action if the check amount is not paid on the spot. Bounced checks occur when the account balance is insufficient to cover the payment of the amount. Prompt action is required to recover the money. Firstly, a letter is sent to the drawer requesting payment, otherwise, proceedings will be initiated. Occasionally, the letter is resolved quickly.

According to the Negotiable Instruments Act, a Check bounce is punishable by imprisonment and a fine. It is the drawer of the check who must present the check within 30 days from the date of dishonoring of the check in order to protect his rights under the Negotiable Instruments Act. As per Section 138 of the Negotiable Instruments Act, bouncing a check or failing to pay a check is a serious offense punishable by fine or imprisonment.

If a cheque bounces, when can it be notified?

• Upon issuance of the check, the check must be presented within 6 months of the date on which it was issued.
  As a result of insufficient funds, the check was dishonored due to insufficient funds.
• Despite being given a notice, the maker of the check has not been able to pay the amount within 15 days of receiving notification that the check had bounced.
• Within 30 days of the date on which the check bounced, the beneficiary notified the maker of the check that the check had bounced.
• Checks have been issued to settle any outstanding liabilities.

Procedure to handle of Cheque Bouncing issues

• Within a period of 30 days, a demand notice is sent to the customer. Upon receiving a demand notice, the drawer has 15 days to pay the amount owed to the drawer.
• A check bounce notice is sent by registered mail in order to create a record of the fact that the notice has been sent.
• If the payment is not received within 15 days, then the payee can file a complaint before a magistrate within 30 days regarding the non-receipt of payment.
• When a complaint has to be filed, it must be filed in the state where the bank is located.

Punishment and Penalty

The court will issue a summons and begin hearing the matter upon receiving the complaint along with an affidavit and the relevant paper trail. The defaulter can be punished with a monetary penalty that may be twice the amount of the check or can be imprisoned for two years or both. The bank also has the right to stop the cheque book facility and close the account for repeat offences of bouIn the event that the defaulter is found guilty, he or she can be punished with a monetary penalty, which may be twice the amount of the check, or imprisonment for a term of up to two years,

If the drawer makes payment of the cheque amount within 15 days from the date of receipt of the notice, then drawer does not commit any offenceIn the event that the defaulter is found guilty, he or she can be punished with a monetary penalty, which may be twice the amount of the check, or imprisonment for a term of up to two years,ice.