Theme: Cheques

Each bank will have their own policy on cheque collection. You can ask your bank or check their website for their policy.

Yes, this is cheque bouncing. If the account of the person who issued you the cheque is closed, then it is an act of cheque bouncing.

If “Account Payee” is written between the crossed lines on the corner of the cheque, it means that when the cheque is presented to the bank by you, the cheque amount will be transferred to your bank account only. You cannot get the cheque amount in cash over the counter.

When a cheque has no name written in the payee section and the “or bearer” has not been crossed out, it is called a bearer cheque. To know more about bearer cheques, please refer to this.

The RBI (Reserve Bank of India) allows each bank to decide the consequences of repeated cheque bounces. So please check with your bank with regards to specific consequences for repeated cheque bounces.

It is possible for the bank to misplace your cheque either during the clearing process or at the paying bank’s branch. In such situations the bank should do the following:

• The bank should immediately inform the customer who presented the cheque.
• The customer is entitled to be reimbursed by banks for related expenses for obtaining duplicate instruments and also interest for reasonable delays in obtaining the same.

As soon as the bank informs the customer that the cheque has been lost, then the customer can take precautions and inform the drawer of the cheque to stop the payment of the cheque.

It may however be noted that the probability of losing the physical instrument in the hands of paying bank is remote, in the locations covered by CTS as clearing is undertaken on the basis of images.

There are two types of facilities that banks provide for cheques:

• They provide a drop-box facility where you can drop-off your cheque. You will not get an acknowledgement for a cheque dropped at the drop-box.
• They also have collection counters where you can get an acknowledgement when you give the cheque for collection at the bank branch’s counter.

Yes, you can be held liable for cheque bouncing. Typically a cheque is valid for 3 months from the date on which it is issued. When you make a promise to your landlord to pay your rent through a cheque, it is understood your promise is good for 3 months. Even if your intention was to pay your rent when you wrote the cheque, but a few days later, your account balance went below the amount required to pay the rent cheque on the day your landlord presented the cheque for payment, you have still committed an illegal act. The relevant factor is not your intention to pay when you wrote the cheque, but whether your promise can be honoured on the day your landlord presents the cheque at his bank.

Write to your bank requesting another cheque return memo. Your bank will give you another copy of the cheque return memo which will be in duplicate.

Yes, 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 percent of the amount of cheque that was bounced. Once the court passes the order for the compensation, you should be paid within 60 days by the accused person. In exceptional cases they can even pay you in 90 days.

If the final court order in the case is in your favour, the award amount that you will receive will be after deducting the compensation amount paid in the beginning of the case. But in case the final order is not in your favour, you must return the initial compensation amount with interest.