LAW ON DISHONOUR OF CHEQUES
Section 138 of Negotiable Instruments Act ,1881 makes a complete code on dishoner of cheques .section 138 states -Dishoner of cheques for insufficiency,etc of funds in the account
Ingredients of section 138 as under follows.
1.If any cheque, is drawn by a person on an account which is maintained by him, for payment of discharge of any amount of money to another person either wholly or partly from or any debt or liability but such cheque is returned or unpaid from the bank due to insufficiency of fund to honour the cheque or it exceeds the amount arranged to be paid from that account by an agreement made with that bank,such person shall be deemed to have committed an offence and be punished with imprisonment for a term which may be extended to two years,or with fine which may extend to twice the amount of the cheque ,or with both .
provided conditions is that.
a. The cheque has to be presented to the bank within a period of three months from the date on which it is drawn i.e, validity is three months .
b.The the holder may also make a demand for the payment of the said amount of money by giving a notice in writing to the Bank within 15 days notice. i.e 'To make a Fresh payment' If the holder fails to make payment to the bank after 15 days or cheque amount remains unpaid .Thn upon such circumstances the payee has the right to file a criminal complaint U\S 138 of N.I. Act ,1881.&it is triable by Judicial Magistrate First class or in Metropolitan areas Metropolitan Magistrate.
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