CHEQUE BOUNCE SECTION 138 NI ACT

The definition of cheque is an instrument, most commonly used means of making payments in the commercial and business world. It is defined under Section 6 of Negotiable Instruments Act as a bill of exchange, issued by the drawer to the banker. Cheque is issued with the purpose of guiding the banker to pay a certain sum of money when demanded by the specific person. A cheque is a tripartite transaction involving at least 3 parties one of them always being a bank. A cheque can be crossed, open, post-dated, anti-dated, bearer or order cheque. A cheque needs to be duly signed by the drawer and the drawee must be certain to prevent misuse of such cheque.
A situation of cheque bounce is basically a term used to define the unsuccessful processing of a dispensed cheque due to several reasons. Non-sufficient funds (NSF) in the issuer’s account is one of the primary reasons for a bounced cheque. The banks return or dishonour the cheques, also known as rubber checks, in addition to imposing a particular charge. Further, the passing of bad cheques can be illegal, and this crime can be aggravated depending on the amount and whether this action involves crossing state boundaries.