Cheque bounce is a quasi-criminal proceeding. As per the presumption laid down in the Negotiable Instrument Act, it is the accused who needs to disprove the alleged transaction, and the complainant doesn’t have the liability to prove the same beyond a reasonable doubt.
The following are the important stages in a cheque bounce case:-
1. Dishonoring of the Cheque: The cheque is presented to the bank and is returned unpaid due to insufficient funds or other technical reasons.
2. Issuance of Legal Notice: Upon receiving the dishonor notice from the bank, the payee must send a legal notice to the drawer within 30 days from the receipt of the bank's notice. The notice informs the drawer of the dishonor and demands payment within 15 days.
3. Filing of Complaint: If the drawer fails to make the payment within the 15-day period after receiving the notice, the payee can file a criminal complaint under Section 138 in a magistrate court. This must be done within 30 days of the expiry of the 15-day period.
4. Court Proceedings: The court will hear both parties, and if the drawer is found guilty, they may face criminal charges, including imprisonment for up to two years or a fine that may extend to double the cheque amount.