If you use cheques to make payments, it’s time to be extra cautious. The Indian government has tightened the rules related to Cheque Bounce? Get Ready for Double Penalty and Legal Action, introducing stricter penalties and legal consequences.
As per the new regulations, if a Cheque Bounce? Get Ready for Double Penalty and Legal Action, the issuer could face a penalty of up to double the cheque amount. Moreover, their bank account may be frozen, and in severe cases, imprisonment is also a possibility.
A cheque is considered “bounced” when there are insufficient funds in the issuer’s bank account to honor the payment. This is not just a financial irregularity but now also a legal offence.
Under the revised provisions of Section 138 of the Negotiable Instruments (NI) Act, a person whose cheque bounces can be punished with imprisonment for up to two years, a fine, or both. The government has also implemented a digital tracking system to ensure quicker resolution of such cases. These matters are now being fast-tracked through dedicated courts to speed up the judgment process, as cheque bounce cases have seen a significant rise in recent years.
Strict Measures Under New Rules
The government now considers cheque bounce a serious offence and has introduced double penalties. For example, if a cheque of Rs 50,000 is dishonored, the penalty could go up to Rs 1 lakh. In cases of repeat offences, the defaulter’s bank account may be frozen, thereby blocking all transactions.
Additionally, banks are allowed to levy their own charges ranging from Rs 100 to Rs 750 for each bounced cheque.
These new measures are aimed at improving accountability and deterring people from issuing cheques without sufficient funds.
