What if cheque bounces

When a cheque bounces, it can lead to serious legal and financial consequences. Under Section 138 of the Negotiable Instruments Act, 1881, it is a criminal offence punishable by:

• Imprisonment for up to two years
• A fine of up to twice the cheque amount
• Negative impact on your credit score and banking relationship

Banks also levy penalty charges on both the drawer and the payee. To resolve this, the payee must send a legal notice within 30 days, giving the drawer 15 days to pay before filing a court case.