Article by: Jagadeesha A., Advocate (94498 47222)

Presently we can find lot of cheque bounce cases in trial courts and these cheque these several lakhs of Cheque bounce cases is pending before trial court taking lot of time to conclude the cases . Previously Cheque bounce is not criminal offence and it is treated as civil offence. The people are taking undue advantage by issuing cheuqes without maintaining sufficient balance in their accounts. Particularly in business and commercial transactions more number of cases were filed and these civil cases run for decade there by business will suffer serious setback in business and commercial transactions. The parliament has taken this aspect it has introduced amendment in the year -1998 where in new chapter is included XVII and made the cheque bounce is Quasi Criminal and proceedings were make it very simple and time bond to complete the trial.

The New provision will deal with the procedure to be followed in cheque bounce case, how to take cognizance, time to be taken for completing trial , presumption to be drawn in cheque bounce cases etc. Mere dishonoring cheque will not amount to any offence and it will not attract any punishment. The following elements to be satisfied to be considered as offence under Negotiable Instrument Act 1881

1. Cheque should be properly drawn-

2 .Presentation of cheque within the validity period

3. Returning by cheque by bank with reasons for dishonor.

4. Issue of Legal Notice within the prescribed period

5. -'Failure' of the 'drawer' to make payment within 15 days of time

6. Filing of case within specified period - the offence of cheque has been made cognizable only on a written compliant by the payee or holder in due course.

The following are the important points to be considered while filing cheque bounce case

1.Validity of Cheque

As per Section 138 of the Negotiable Instrumet Act 1881 the Cheque to be presented by the drawee or holder of the cheque with in the period specified in the Act. The cheque to be presented with a period of 3 months from the date of issuing cheque or validity period whichever is earlier.

Even though the prescribed period is 3 months period should be considered for the validity of cheque to be presented in 90 days from the date of issuing of cheque or validity period whichever is earlier.


If a customer issues a cheque bearing date 14.03.2020 . The customer holded the cheque and presented the cheque on 12.06.2020 through his banker for collection. 13.06.2020 is the Second Saturday and 14.06.2020 is Sunday. The banker has accepted the cheque on 12.06.2020 by affixing seal. The cheque sent for collection 15. 06.2020 and got returned by the banker with a reason instrument is postdated/outdated/undated/without proper date and state that cheque is outdated and refused to make payment.

We will Annalise legally whether banker is right in quoting the reason of dishonor cheque is outdated.

1. Cheque date is 14.03.2020 and presented to the bank on 12.06.2020 well within the period of 3 months but actually banker will take 90 days from the date of issue of cheque.

Banker has calculated as follows :

14.March 2020 18 days

April 2020 30 days

May 2020 31 days

June 12, 2020 12 days

Total ---------91 days----------

Hence the statutory period of 3 months is over and banker is right is dishonoring cheque and quoting the reason cheque is outdated

2.The Second Point in this illustration cheque is presented on 12. 06.2020 and banker has accepted cheque for collection by affixing seal on the cheque CTS Clearing . Next day 13.06.2020 is the second Saturday and 14.06.2020 is Sunday banks were not functioning.

The bank has sent the cheuqe for collection 14.06.2020 and came back with the reason cheque is outdated. Here bank is having the time to credit to the customer with in 3 to 7 working days.

In this illustration the Complainant filed compliant with RBI Ombudsman but the compliant is rejected by ombudsman by giving decision in Bank Favor. 

Validity period is utmost important in cheque bounce case even a day in delay will cause lot of harm to the complainant and he will looses the right to file case under NI Act.

2.Legally Enforceable Debt/ other Liability

In order to file case under NI Act debt should be legally enforceable debt. At the time of issuing cheque by the accused the debt should be existed . cheque issued before determination of debt, before adjudication of debt if cheques are obtained compliant is not maintainable.

Whether time barred debt is legally enforceable debt this point was discussed in the recent Judgment of Karnataka High Court in the case of K.R.Sudhir Vs Suresh Raju in criminal petition 243 oe 2021 decided on 7th December 2021 stated that time barred debt is permissible when cheque was ussued under a subsequent written agreement between the parties.

Once the Accused admitted his signature on the cheque during the trial will constitute the legally enforceable debt.

In case of Cheque issued by the accused to the complainant as security cheque and accused accepted during the trial cheque issued by him it constitutes legal enforceable debt.

In case the accused lost the cheque and he intimate to the police by giving compliant and issues stop payment order to the bank will not constitute legally enforceable debt. Since there is no debt existing it can not be considered legally enforceable debt.

In case the accused has issued a cheque before the loan taken by him will not be considered as legally enforceable debt. For example if the issued in the year 1999 for the loan taken in the year 2021 will not constitute legally enforceable debt.

An award of lok adalath is deemed to be "decree of civil court" and executable as a legally enforceable debt.

Article by: Jagadeesha A., Advocate (94498 47222)

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