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Stages in Cheque Return Case under Section 138 of Negotiable Instruments Act.

Legal Notice |  Filing Complaint |Sworn in Statement of Complainant | Appearance of Accused | Examination in Chief | Cross Examination | Defence Evidence | Arguments | Judgment


The following are the stages in case of bouncing of a cheque:

Stage 1

Demand / Legal Notice

If the cheque presented before the bank is bounced for insufficient fund or some other reasons, the demand notice to be send for payment within 30 days from the date of cheque bounce. If the other party failed to comply the notice (usually in 15 days) then a complaint under section 138 of negotiable Instrument should be filed in the concerned magistrate court within the jurisdiction.


Stage 2

File Complaint in the Court

Filing of complaints u/s 138 with M.M./A.M.M.
The complaint should be filed before the Trial Court with supporting documents such as Returned Cheque whit bank slip, Legal Notice with Acknowledgment for the receipt or delivery, Reply notice and proof for liability such as invoices, promissory note and etc., If the courts finds prima-facie a case is made out, then the complainant will be called to make sworn statement before the court.

Stage 3

Sworn Statement of Complainant
The complainant or his authorized agent should appear in the witness box and provide relevant details for filing the case. If the court is satisfied and finds substance in the complainant, then the summon will be issued to the accused to appear before the Court.

Stage 4
Appearance of Accused
The accused shall appear in court in person or through his Counsel. The court will verify whether the summon issued by the court is received by the accused. In spite of the receipt of summon, if the accused failed to appear before the court then the the court will issue an arrest warrant against him. The court will enquire the accused whether he admits the charges made by the complaint. In case of admission of guilty, the court will post the matter for punishment. If the accused, denies the charges then he will be served with the copy of complaint and he will be directed to submit his version of defense.

Stage 5

Examination in Chief
The Complainant shall present his evidence by way of oral or affidavit and produce all documents including the original in support of his complaint. The complainant can also present his witnesses in support of his case.

Stage 6
Cross Examination in Cheque Bounce cases
The complainant will be cross examined by the accused or his counsel. The other witnesses appeared in support of the complainant will also be cross examined in this stage.

Stage 7
Defense Evidence
The accused will be given an opportunity to leave his evidence. The accused will also be afforded an opportunity to submit his documents in support of his case, as well as witnesses in his support. Accused and his witnesses will be cross examined by the complainant. After this, the case is posted for arguments.

Stage 8
The Complainant and the accused or this counsels shall submit their arguments before the Court. During the argument the counsel may submit the precedents of High courts and Supreme Court in support of their case. Usually, a written argument containing a gist of the oral argument is also submitted before the the court.

Stage 9
After the arguments, the case is posted for judgment. if the court finds in favor of the complainant then the accused will be punished with fine or imprisonment. If the court finds in favor of the Accused, then the court will acquit him. If accused is convicted, he will be subjected to arrest or he can move a petition for suspension his sentence for a period of 30 days, so he can file an appeal before the sessions court.


Five Important Elements of Cheque Bounce Case

1. Drawing the cheque.
2. Presentation of the cheque to the Bank.
3. Returning the cheque unpaid by the drawee Bank.
4. Payment demand notice issued to the drawer of the cheque
5. Failure of the drawer to make payment within 15 days of the receipt of notice.

Important Laws on Cheque Bounce Cases

- Negotiable Instrument Act, 1881
- Criminal Procedures Code; 1973
- Indian Evidence Act, 1872,
- The Criminal Rules of Practice and Circular orders, 1990

Other Important Allied Acts in Cheque Bounce case

- Indian Limitation, 1963.
- General Clauses Act 1897.
- Bankers Books Evidence Act, 1891.
- Bills of Exchange Act, 1882.
- Information Technology Act, 2000.[Electronic Cheque]
- Constitution of India [Rights of Accused]


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