Avoid Getting Your Cheque Dishonoured Or You Will Face These Consequences
Cheque bounce is one of the common financial offences in India is which leads to adverse effects on the issuer. The issue of cheque bounce is handled under the section 138 of the Negotiable Instrument Act and under section 25 of the Payment and Settlement Systems Act, 2007. There are many ways in which the bounced cheque can affect you.
If insufficient funds or any other technical reason like a signature mismatch are the reasons behind the cheque bounce then both the defaulter and the payee have to pay a penalty amount to the respective banks.
If the cheque bounces before the repayment of any loan then the defaulter will be charged with the late payment charges by the bank which can between 200 to 700 rupees along with the penalty fee charges.
Adhil Shetty who is the founder & CEO of BankBazaar.com states that the penalty charges can be 300 rupees for nearly all banks and the charges for the cheque inward return is almost 100 rupees. But the penalty charges may vary as per the different account types. The penalty charges are high for the premium accounts.
Another disastrous consequence the defaulter has to face is the negative effect on your CIBIL score and financial history. A bounced check has such bad effect that a bank may deny giving you a loan in the future. Thus, you should avoid getting your cheques dishonoured and should maintain few more money than the minimum balance in your account even if the cheque has been cleared.
Some of the defaulters get away by giving a small fine to the bank for a bounced cheque. On the other hand, some of them may have to face civil and criminal charges by the payee or the aggrieved party. The payee has the right to file a criminal case if they don’t receive the promised amounts.
The defaulter can be charged with a non-bailable immediate warrant under section 417 and 420. If there are more than one bounced cheques then the aggrieved party can file separate cases for each cheque bounced.
But, the payee cannot file a case for the first bounced cheque and has to represent the returned cheque within 3 months. A second chance to the issuer is given and even then the cheque bounces, the payee can file a case within 30 days of the receipt of Cheque Return Memo.
As per the RBI guidelines, the banks may stop issuing cheque book facilities to a customer who is a defaulter for repeated cheque bounce offence valued at over 1 crore rupees. So, no one should issue a check if he/she have exhausted the money in the account and can inform the payee about it.