Thursday, 25 April 2013

What is the rule for Cheque Bounce case..

Stages of Cheque Bounce CaseCheque Bounce case are not taken as a serious beach of the section 138,because the time taken by the courts is too much and hence the  cheque issuing parties are least bothered, and particularly those who issue cheque with inferior intense, there should be some remedy for this. There should be some ready made solution for these violation, with riders like if any of the party turns bogus, than the punishment for the defaulter should be a greater than monetary fine. some jail terms should be mandatory. This can reduce the case of cheque bounce to a notable nos.

Those writing cheques without adequate funds in their account risk having their account blocked a measure that will further tighten the regime around bounced cheques.

India’s largest lenders( Bankers) has decided to close the accounts of those customers who default on their cheques too frequently, a lead other banks are sure to follow.
An internal circular of the bank has asked officials to close the accounts of those customers whose cheques have bounced four times or more in a financial year.

The new norm will be applicable for those who do not maintain enough balances to meet their standing instructions for electronic clearing services where the bank is authorized to debit regular 
payments directly to their accounts.

Other banks, both public and private, may soon follow as the issue has been informally discussed amongst public sector banks, said a senior person in the Indian Banking Association (IBA).
“Banks are expected to enforce financial discipline amongst its customers,” he said, adding that a month’s notice will be issued, giving customers ample time.

The IBA directive reinforces the central bank’s attempts to penalize the deliberate default by the cheque issuer. An email sent to the bank remained unanswered until the time of filing this story.

If the information on such closed accounts is shared among banks, or with the institutions that maintain credit scores of individuals, defaulters would find it difficult to access financial services or the costs of such services will go up for them sharply.
The bouncing of cheque entitles the holder of cheque to take criminal action against the drawer of cheque but only if a strict procedure is followed in this respect, which is as follows:
1. In case a cheque is bounced, a notice has to be issued to the drawer of the cheque (Oppsoite Paty) within 30 days from the date of memo accompanying the bounced cheque is received from the Bank.

2. The notice by the holder of the cheque should demand the amount for which the cheque has been bounced, providing 15 days to settle the matter.

3. The Opposite Party has 15 days from the receipt of the notice to settle the matter and no cause of action arises till the expiry of these 15 days or if paid within this specified period.

4. After the completion of said 15 days, if the opposite party does not settle the matter or ignores the notice, then the holder of the cheque may file a criminal complaint before the appropriate court within 30 days of the expiry of said 15 days.

5. In case, it is beyond the said period of 30 days, the delay can be condoned by the court on sufficient cause being shown.

Stage Of Cheque Bounce..
                                                             A Cheque bounce case normally takes an average of one year to complete the proceedings before trial court. The following are the important stages in a cheque bounce case.

1) Filing of complaint:
The complaint need to be filed before the jurisdictional magistrate within 30 days from the accrual of the cause of action. The complainant need to be present before the magistrate at the time of filing. The original documents need to be shown to the magistrate. If prima-facie a case is made out, the magistrate will post the matter for sworn statement.

2) Sworn Statement: At this stage, the complainant needs to enter the witness box and give further details regarding the case. If the magistrate is satisfied that there is some substance in the case of the complainant, then he will issue a summons to the accused.

3) Appearance of Accused:
On receipt of summons, the accused need to appear in the court. If he does not appear in the court, the court will issue an arrest warrant against him. After appearance, the accused is supposed to take a bail from the court with or without sureties. If the accused is unable to furnish a surety then he can deposit a cash security, instead of surety. This cash security is refundable to the accused after the conclusion of the case.

4) Recording of Plea:
In the next stage, the court will ask the accused as to whether he has committed the offence or not. If the accused admits the guilt, the court will immediately give him punishment. If he pleads innocence, the court will post the matter for evidence.

5) Evidence: The Complainant has to furnish his evidence, normally by way of affidavit; this is known as examination-in-chief. He needs to produce all documents in support of his case like bounced cheque, dishonor memo, copy of notice etc. Later complainant will be cross examined by the accused. If there are other witnesses in support of the complainant, then their evidence also has to be recorded.

6) Statement of the Accused: After the Complainant side evidence is over, the court will put some questions to the accused regarding his guilt. An accused needs to give his version to the same.

7) Defense Evidence: After the Accused statement the court will give an opportunity to the accused to leave his evidence. The accused can also produce documents in support of his case, as well as witnesses in his support. Accused and his witnesses will be cross examined by the complainant. After this, the case is posted for arguments.

8) Arguments: Both the Complainant and the accused will submit their arguments before the court. They can also furnish judgments of high courts and Supreme Court in support of their case. Normally a written argument containing a gist of the oral argument is also furnished to the court.
9) Judgment: After the arguments, case is posted for judgment. If the court finds that the accused has committed offence, he will be punished with fine or imprisonment. If he is innocent, the court will acquit him. If accused is convicted, then he needs to suspend his sentence, for a period of 30 days with in which time, he can file an appeal before the sessions court.

Collection & Written By M.Ajmal Khan.

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