What is Cheque Bounce ?

If the bank refuse to give payment written in Cheque, Cheque bounce may occur. Bank may refuse to make transaction on the basic of signature mismatches, insufficient fund and expired cheque or When cheque is related to the barrier in transaction of the bank refuse to give payment order of the cheque.  At that time cheque bounce may occurs. It’s also called dishonored of the cheque. If the cheque has bounced you have legal remedies to get money mention in cheque according to the Negotiable instrument Act 2034.

Simply, Nepali cheque bounce law declared, cheque dishonored is the criminal case. Moreover, Article 4 of Banking offence and Punishment Act, 2064 declared that dishonored of the cheque is banking offence. If the offence is declared the person shall be punished up to five years and may fine up to ten thousand.

In the cheque bounce case court may adopt speedy process. Normally, within three-to-six-month case may decide.

Procedural remedies and step

1. Engage the lawyer experienced in Banking offence and punishment Act, 2064 and Negotiable instrument Act, 2034
2. If the cheque is bounced recently, lawyer file the first information report to the police and proceed for promptly arrest
3. Follow up to the police office and court
4. Another way is to file the case in court is Lenden (transaction) case.

Conditions for cheque bounce in Nepal

1. Insufficient funds: if the cheque is returned because of insufficient fund cheque bounce may occurs
2. Signature mismatch: if the cheque is returned by the bank in the reason for mismatch of signature and other writing error of the drawer cheque bounce may occurs
3. Cheque Stopped: if the drawer issues the cheque, then stop the account bank may return the cheque by reasoning various issues at that time also cheque bounce may occur

Penalties and punishment for drawers

If the anyone commits the offence under the banking offence and punishment act 2008 AD such person shall be punished with a fine up to ten thousand and imprisonment accordingly.

S.N.	Suit amount	Imprisonment
1.	Up to 1 million rupees	Up to one year
2.	Above 1 million to 5 million rupees	One year to two years
3.	Above 5 million to 10 million rupees	Two years to three years
4.	Above 10 million to whatever amount	Three to five years

 

So, if you are suffering from the issues and need legal assistance for escape from cheque bounce case we the best lawyer for cheque bounce in Nepal, legal zoom Nepal has the experts in particular cheque bounce case in Nepal.

Frequently Asked question in Cheque Bounce cases in Nepal

1. What is a cheque bounce case?

Answer:   A cheque bounce case occurs when a cheque issued by a person is returned unpaid by the bank due to reasons such as insufficient funds, mismatched signature, or account closure. In Nepal, this is considered a criminal offence under the Negotiable Instruments Act, 2034 (1977)

2. Which law governs cheque bounce case in Nepal?

Answer:     Cheque Bounce cases are governed by the Negotiable Instrument Act, 2034 (B.S.) and it follows the criminal procedure.

3. What are the common reasons for cheque bounce?

Answer:    Common Reason includes –

• Insufficient balance in the account
• Signature mismatch
• Post-dated or stale cheque
• Account Closed or frozen
• Payment Stopped by the drawer

4. What is the punishment for cheque bounce in Nepal?

Answer:   According to Negotiable Instrument Act, 2034 and Banking offence and Punishment Act, 2064 – it’s up to 1 year and fine up to ten thousand, or both.

5. What is the time limit to file a cheque bounce case in Nepal?

Answer:     Presentment of the cheque to the bank within 6 months of its issuance. Moreover, to file the FIR (First Information Report) in police within 1 year from the date of first-time cheque dishonored from the bank and 5 years from the date of cheque dishonored.

6. Where should a cheque bounce cases be filed?

Answer:     A cheque bounce case should be filed in the related District Court where the cheque was dishonored or where the bank branch of the cheque issuer is located. Likewise, FIR can file District Police Office where the bank branch is located.

7. What documents are required to file cheque bounce case in Nepal?

Answer:   The following documents are needed –

• The original bounced cheque
• The banks dishonor memo (cheque return slip)
• Evidence of bank notice (if sent to the issuer)
• Citizenship certificate of the individual or firm registration documents in company case and power of attorney/authority

8. Can cheque bounce cases can be settled outside the court?

Answer:     Yes. If the drawer deposits the full amount written in the cheque in his account, then it can settle outside. Or on the basis of the compromise between issuer and payer.

9. What happen if the accused does not appear in court?

Answer:     if the accused ignores, the court issues the summon notice and issues an arrest warrant. If the drawer ignores the notice of police station, arrest warrant may issue.

10. How can cheque bounce be prevented?

Answer:     To avoid the cheque bounce case you have to do

• Ensure sufficient funds before issuing a cheque
• Avoid post-dated cheques without the guarantee of the funds
• Verify signature and account detail before issues the cheque
• Use written agreements when giving cheques as security or payment

11. Can cheque bounce case withdrawn? If yes how long time it takes?

Answer:     Yes, if the plaintiff agreed or both parties settle the issues at that time case can withdraw.

12. Can a bounce cheque be presented to the bank again?

Answer:     Yes, if the drawer deposits the funds in his account and send the confirmation to the parties.