What is punishment in case of dishonour of cheque u/s 138?

Section 138 provides that when the cheque is dishonored for insufficiency of funds or for any of the prescribed reasons, the one who is at defaulter can be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or both.

Are Offences punishable under the Negotiable Instruments Act, 1881 Compoundable?

Section 147 in The Negotiable Instruments Act, 1881. 147 Offences to be compoundable. —Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be compoundable.

Which section of the Negotiable Instruments Act, 1881 with cheque?

Section 138
Section 138 in The Negotiable Instruments Act, 1881. (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Which court can try the offence of dishonour of cheque?

The Supreme Court
INTRODUCTION. The Supreme Court (“Court”) has, in its recent decision in Dashrath Rupsingh Rathod v. State of Maharashtra & Anr.1, held that in cases of dishonour of cheque, only those courts within whose territorial limits the drawee bank is situated would have the jurisdiction to try the case.

What is the maximum punishment for cheque Dishonour?

The punishment for cheque bounce is imprisonment for a term not more than two years or a fine that can extend to twice the amount of the cheque or both.

What is Section 142 of negotiable instrument Act?

Section 142 of the Negotiable Instruments Act, 1881 It states that no Court shall take any notice of any offence which is regarded punishable under the provisions mentioned in Section 138 of the Negotiable Instruments Act, 1881 unless in a complaint which is in writing made by the holder of the cheque.

What comes under negotiable instrument act?

1.5 TYPES OF NEGOTIABLE INSTRUMENT Section 13 of the Negotiable Instruments Act states that a negotiable instrument is a promissory note, bill of exchange or a cheque payable either to order or to bearer. Negotiable instruments recognised by statute are: (i) Promissory notes (ii) Bills of exchange (iii) Cheques.

What is the maximum punishment in a cheque Dishonour case?

In case of a cheque dishonour, where the dishonour is proved, the accused can be punished up to one-year imprisonment or with fine which may extend to thrice the amount of the cheque or both; as provided under section 138 of the Negotiable instrument act, 1881.

When did dishonour of cheque become a criminal offence?

The Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 amended the Act to make dishonour of cheques a criminal liability and offenders were liable to be punished by imprisonment for a term which may extend to 1 (one) year, or with fine which may extend to twice the amount of the cheque, or with both.

Why are cheques included in the Negotiable Instruments Act?

Cheques are very convenient instruments which can be issued to settle payments or obligations in a contract or even to give gifts. Section 138 to 142 are incorporated in Negotiable Instruments Act,1881 with a view to encourage the culture of use of cheques and enhancing the credibility of the instrument.

Why was section 138 of the Negotiable Instruments Act introduced?

Section 138 was introduced as a criminal offence in 1989 by way of an amendment to the Negotiable Instruments Act, 1881.The main objective of introduction of this section was to encourage the use of cheques and increasing the credibility of transactions through cheques by making the dishonoring of the cheques as an offence.

What was the Negotiable Instruments Act of 1881?

Negotiable Instruments Act 1881 regulates the different types of negotiable instruments like Promissory notes, Bills of Exchange and Cheques. According to Sec. 13 of the Act, negotiable instrument means ‘a Promissory Note, Bills of Exchange or Cheque payable either to order or to bearer’.