Cheque Bounce Lawyers In Delhi

Understanding Cheque Bounce Implications Under the Negotiable Instruments Act

A bounced cheque triggers legal consequences under Section 138 of the Negotiable Instruments Act. This section is activated when there’s a

  • Stopped payments
  • Closed account
  • insufficient balance in the account of the cheque issuer
  • Signature discrepancy
  • if the cheque amount surpasses the agreed limit with the bank.

Key Legal Provisions:

  • Section 138: It addresses cheque dishonor due to inadequate funds or when the amount exceeds the prearranged limit with the bank2. The issuer faces criminal charges, with penalties including up to two years of imprisonment, a fine up to twice the cheque amount, or both.
  • Section 139: Presumption of innocence is the norm unless proven otherwise. The accused can escape conviction under Section 138 by presenting a credible defense that casts doubt on the debt’s legal enforceability.

Conditions Essential for a Bounced Cheque

  • The cheque bounces due to insufficient balance or all of the above reasons combined.
  • A 30-day legal notice is delivered.
  • The required payment is not completed within 15 days’ time
  • The payment is required to be made in order to satisfy a legally binding debt.

Common Defenses in Cheque Bounce Cases:

  • Security Cheque: If the cheque was issued as a security rather than for debt repayment, it doesn’t fall under Section 138.
  • Unaccounted Money: Loans involving unaccounted cash are not legally recoverable, hence not covered by Section 138.
  • Signature Discrepancy: If the signature on the cheque is disputed, the bank can verify the mismatch.
  • Stop Payment Instructions: If sufficient funds exist but payment was stopped for other reasons, Section 138 does not apply.

Dealing with False Cheque Bounce Cases: False accusations can be countered legally. The accused can seek legal counsel to file a countersuit, including criminal and defamation charges, and seek compensation for the wrongful accusation.

Legal Assistance: For those facing cheque bounce cases in Delhi, specialized lawyers can provide robust defense strategies. Lead India Law offers free online legal advice, allowing individuals to consult with experts and navigate through legal challenges effectively.

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