Check Bounce: Check bouncing is a serious crime in India and there is a provision for harsh punishment for it. Recently, Bollywood actor Rajpal Yadav had to go to jail in a check bounce case. Delhi High Court had found Rajpal Yadav guilty in the check bounce case, after which he was lodged in Delhi’s Tihar Jail. Here we will know what is the punishment for check bounce and what are the rules and regulations regarding it in India?
what is check bounce
In India, check bouncing is an offense under Section 138 of the Negotiable Instruments Act, 1881. When a check recipient deposits his check in the bank for payment and the check is returned without payment by putting a memo of ‘Insufficient Funds’ in the bank account of the person giving the check, this is called check bounce. For example, your friend gave you a check of Rs 2 lakh, which you went to your bank to clear. But, when your bank started the process of clearing the cheque, you came to know that your friend does not have Rs 2 lakh in his bank account. In such a case, your bank will return that check with a memo of insufficient funds.
What can be the punishment if check bounces?
Under Section 138 of the Negotiable Instruments Act, 1881, there can be three types of punishments in case of check bounce. According to ClearTax, in case of check bounce, as the first punishment, the culprit will have to pay a fine of double the check amount. As a second punishment, the culprit can be jailed for up to 2 years and as a third punishment, the culprit can have to pay a fine of double the amount and also spend up to two years in jail. To avoid a serious crime like check bounce, you should take special care that there is sufficient money deposited in the bank account in which you are giving the check to the other person.
SK Sharma is a content writer who writes on news, entertainment, and lifestyle topics. She has over four years of experience and is known for conveying information in simple and clear language.
