Theme: Money & Property

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.

Any demand made after the dishonour of cheque will constitute a notice. It is not necessary that the notice should be sent by Registered Post alone, it could be sent even by fax. It is not necessary that the notice should be in any particular form or style. What is essential is that there should be a demand to pay the dishonoured cheque amount.