Check bouncing is a semi-criminal offense under Section 138 of the Negotiable Instruments Act. That is, the matter is about money transaction, but it has been kept in the category of crime so that people maintain discipline in giving cheques. It is very rare to go to jail for bouncing a check. The primary objective of the courts is not to send you to jail, but to give the right to the person to whom the money belongs. If you are a habitual defaulter, deliberately avoiding payment or adopting tactics like stop payment, then the court can be strict. Although there can be a jail term of up to two years and a fine double the amount of the cheque, most cases end with mutual agreement. When you receive a legal notice after a check bounces, the 15-day time limit begins.
Don’t miss: Many people consider this as just a way to scare them and remain silent. According to experts, this is your biggest mistake.
WhatsApp is also a witness: Things said on WhatsApp can also become evidence against you in court. If payment is made within these 15 days, the case will not be filed.
CIBIL will be affected
The first impact of check bounce is on your credit rating. If the bounced check is for a loan EMI, your CIBIL score will immediately drop. Getting a loan in future will be as difficult as climbing a mountain. Banks impose a penalty of Rs 500 to Rs 1,000 on every bounce and if this happens repeatedly, your check book facility can also be taken away.
Tie the knot with these three things
Stop harboring the misconception that a check given in the name of ‘security’ is not legal. If you become liable, a case can be filed even if the security check bounces.
On arrival of the date, the legal status of a post-dated check becomes the same as that of a normal cheque.
Communicate with the other person as soon as you receive the notice. A written agreement is always cheaper and better than court cases.
Disclaimer: The views, opinions and investment suggestions published in Apna Paisa are those of individual experts, broker firms or research institutions. These do not require the consent of the newspaper or its management. Please consult your registered financial advisor before taking any investment decision. The newspaper or its management will not be responsible for any loss arising on the basis of this information.
