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if you have filed a cheque bouncing case against someone, you can apply for interim compensation to be given to you. This compensation would be 20% of the cheque amount.

Cheque Bouncing

Last updated on Jun 1, 2022

One of the ways in which a cheque is said to have been ‘bounced’ or ‘dishonoured‘ is when it is deposited or presented for payment but could not be encashed by the holder of the cheque.

There are several reasons why a cheque would bounce. However, not all of them amount to a crime. It is a crime if the cheque bounced either because of:

  • Insufficient funds in the drawer’s account, or
  • The payment for the cheque was stopped by the bank on the request of the issuer of the cheque.

Examples: ‘A’ issues a cheque to ‘B’ for Rs. 1,000. When B deposits the cheque in the bank, the bank informs him that ‘A’ does not have Rs. 1,000 in her account to pay ‘B’ with. The cheque has been dishonoured. ‘A’ issues a cheque to ‘B’ for Rs. 1,000. Before B can deposit the cheque, ‘A’ issues instructions to her bank to stop payment of the cheque without the knowledge and consent of ‘B’. When ‘B’ tries to encash the cheque, he cannot do so. The cheque has been dishonoured.

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Related Resources

Encash a cheque

Process of encashing a cheque depends on whether it is a bearer cheque or order cheque. There are multiple modes for the same.

Endorsing cheques

By endorsing the payee can use the same order cheque to pay to someone else by writing that person’s name behind the cheque and signing it.

Order Cheque

An order cheque is a cheque where only the person or party in whose name the cheque has been drawn, can withdraw the cash.

Cheque Truncation System

Cheque truncation is a form of cheque clearing system. It digitises a physical paper cheque into a substitute electronic form.

Crossed Cheque

Crossing a cheque means that it cannot be transferred to anyone else. These cheques can only be credited to the payee’s account.

Who can file a case for cheque bouncing?

To file a case for cheque bouncing, certain conditions have to be met. Acivil or criminal complaint can be filed if conditions are fulfilled.