What happens if cheque bounces in india

In India, a bounced cheque is a criminal offence under Section 138 of the Negotiable Instruments Act, 1881. If a cheque is dishonoured due to insufficient funds or other discrepancies, the issuer may face:

• Legal Action: The payee can file a criminal complaint after serving a 15-day demand notice.
• Penalties: Courts can impose a fine of up to twice the cheque amount.
• Imprisonment: The issuer may face a jail term of up to two years.
• Bank Charges: Both the issuer and recipient are typically charged penalty fees by their respective banks.
• Credit Score Impact: It can negatively affect your creditworthiness and reputation.