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Cheque clearing

S.Gupta c/o KPS (NA) (187 Points)

27 March 2019

please clarify me the latest regulation regarding bouncing of cheque(for any reason).

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3 Replies

Radhey Shyam Jha (Student) (1567 Points)
Replied 27 March 2019

According to Section 138 of the Act, the dishonour of cheque is a criminal offence and is punishable by imprisonment up to two years or with monetary penalty or with both.

Aman Kumar (Accounts Executive) (744 Points)
Replied 27 March 2019

It will be accepted for not more than 90 days from the date that appears on the cheque leaf.

You cannot change ,edit , amend the amount in words or numbers but can edit date provided it is duly signed by the maker of the cheque. Banker may accept this edit.

Spelling Mistek or Amount Decline ( excess amount write on cheque)

Aman Kumar (Accounts Executive) (744 Points)
Replied 27 March 2019

Here is all you need to know about the proposed changes in the Negotiable Instruments Act on cheque bouncing.

1. The Negotiable Instruments (Amendment) Bill, 2017, aims to amend the Negotiable Instruments Act, 1881, asking the drawer of a cheque that has been dishonoured to pay interim compensation to the complainant.

2. The interim compensation will, however, not exceed 20% of the amount of the cheque that was dishonoured.

3. The interim compensation is to be paid by the drawer of the dishonoured cheque in a summary trial or a summons case. It is applicable even if he pleads not guilty to the charge made in the complaint.

4. The drawer of the cheque has to pay interim compensation within 60 days from the date of the order. If the court is satisfied, it can grant an extension of a further 30 days but not beyond that.

5. In case the drawer of the cheque is acquitted in the case, the complainant has to repay the drawer the interim compensation with interest. The repayment has to be made within 60 days from the date of the court order.

6. Aiming to reduce delays in resolution of cheque bouncing cases, the Negotiable Instruments (Amendment) Bill, 2017, will not become an Act till it is passed by both Houses. Clearance from Rajya Sabha is now awaited.