What Happens To A Dishonored Cheque?
A dishonoured cheque attracts penalty on the issuer of the cheque. ... If a cheque is dishonoured because funds in the payer's account were insufficient, it is a criminal offence under the Negotiable Instruments Act of 1881. The payer may be prosecuted for issuing a cheque against an account with insufficient funds.
What happens to a returned cheque?
A returned cheque is a cheque that the bank does not honour. The cheque will be returned to the bank that submitted the cheque for payment (typically the recipients or payee's bank). ... If you received the cheque, a returned cheque is a cheque that you won't get paid on (at least not right away).
What you need to do with returned cheques - Punch Newspapers
What will happen if a cheque gets dishonored?
According to Section 138 of the Act, the dishonour of cheque is a criminal offence and is punishable by imprisonment up to two years or with monetary penalty or with both. ... The payee has to sent the notice to the drawer with 30 days from the date of receiving “Cheque Return Memo” from the bank.
Cheque dishonoured: A step-by-step guide for legal recourse - IndiaInfoline