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Cheque Bounce Cases

Know About Cheque Bounce Cases & How to Handle Them


Cheque Bounce Case: Causes, Consequences, and Legal Proceedings


Cheque Bounce Cases have become an increasing problem in India and are of great concern to businesses and individuals. When a cheque is returned due to insufficient funds or any other reason by a bank, this is known as cheque bounce and this article will discuss its causes, consequences, and legal proceedings that follow it.

Table of Contents

  1. Understanding Cheque Bounce
  2. Causes of Cheque Bounce
  • Insufficient Funds
  • Signature Mismatch
  • Overwriting or Alteration
  • Frozen Account
  1. Consequences of Cheque Bounce
  • Legal Action
  • Impact on Credit Score
  • Reputational Damage
  • Financial Loss
  1. Legal Proceedings for Cheque Bounce
  • Issuing a Legal Notice
  • Filing a Complaint
  • Summoning the Accused
  • Trial and Conviction
  1. Measures to Avoid Cheque Bounce
  • Proper Fund Management
  • Keeping Track of Transactions
  • Ensuring Proper Documentation
  • Using Electronic Modes of Payment
  1. Conclusion
  2. FAQs



Understanding Cheque Bounce

A cheque is a written document that instructs banks to send funds from an account belonging to one person to another person named on it. If a cheque is dishonoured by the bank and returned unpaid by that individual’s account holder (known as cheque bounce), this occurs. This may happen due to several reasons which we will discuss further on in the section entitled “Causes of Cheque Bounce”.

Causes of Cheque Bounce

Insufficient Funds

A common reason for cheque bounce is not having enough funds in one’s account to cover its amount; when that occurs, banks will typically refuse it as being dishonored.

Signature Mismatch

Any cheque which does not match up with the specimen signature provided to the bank by its account holder will be dishonoured by it being returned back for non-payment by banks and banks will therefore not honor or honor it at all. Any overwriting or alteration to any cheques will render them null and void and therefore non-honored by them and they will no longer be honored by them.

Frozen Account

If the account from which a cheque was written becomes frozen or blocked, its honoring will likely be denied by the bank.


Consequences of Check Bounce

Legal Action

When a cheque bounces, those to whom it was issued can take legal action against those responsible. This may result in civil or criminal proceedings being taken against those suspected.

Impact on Credit Score

Cheque bounce can have an adverse effect on one’s credit score and make it more difficult to obtain loans and credit in the future. Reputational Damage

Cheque bounce can have serious repercussions for those responsible, including business and personal relationships.

Financial Loss

Cheque bounce can result in significant financial loss to those expecting the payment and may incur extra expenses and time wasted by legal proceedings for cheque bounce. In such an instance, legal proceedings against cheque bounce may become necessary and could potentially incur extra legal expenses as a result.

Step One in Pursuing Legal Action

Legal Proceedings for Cheque Bounce

The initial step to taking legal action against those who issued a bounced cheque is issuing them with a legal notice within 30 days of its occurrence.

Filing a Complaint

If the person responsible does not respond to legal notice, the next step should be filing a formal complaint with the appropriate court within 30 days after expiration of notice period.

Summoning of the Accused

Once a complaint has been lodged, the court will convene and conduct a trial against those named in it. They will have an opportunity to defend themselves and present their side. If the court finds them guilty, they could face imprisonment or fines.


Trial and Conviction

In a cheque bounce case, trial proceedings may take an extensive amount of time. The complainant must present evidence proving the cheque was dishonored due to insufficient funds or any other reason; their opponent has an opportunity to present evidence in their defense; should the court find them guilty, they may face imprisonment or fines from jail time or fines from fines authorities.


Measures to Avoid Cheque Bounce

In order to prevent cheque bounce, certain measures can be taken. Some of these include:

Fund Management

Before issuing any cheque, it’s essential to ensure there are sufficient funds in your account. With proper fund management in place, this can help avoid cheque bounce due to insufficient funds.

Tracking Transactions

Monitoring transactions is crucial to avoid mistakes in writing the cheque, such as overwriting or alteration. Furthermore, keeping an eye on transactions may prevent signature mismatch issues and reduce cheque bounce due to signature mismatch.

Documenting Properly

Before issuing any cheque, it is vitally important that it is filled out correctly. Doing this can prevent bounced checks caused by mistakes in its composition or due to incorrect signatures.

Electronic Payment Options

Employing electronic modes of payment like online banking or digital wallets is an ideal way to avoid cheque bounce altogether. They’re faster, safer, and easily trackable.


Cheque bounce can have serious repercussions for both its issuer and recipient. Legal action, reputational harm, and financial losses may result.


Can a cheque bounce due to signature mismatch?

Yes, if the signature on the check does not match that provided to the bank by its account holder as part of an identification document for dishonorance purposes.

What are the consequences of cheque fraud?

Cheque fraud may result in legal action, damage to one’s credit rating and reputational issues as well as financial loss.

What legal proceedings may be taken in a cheque bounce case?

Legal procedures available in such an action include issuing a legal notice, filing a complaint, summoning the accused and trial/conviction proceedings.

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