Legal Aspect of Cheque Bounce
- Section 138 of Negotiable Instrument Act,1881 is applicable for cases pertaining to Cheque Bounce.
- As per section 138, dishonor of cheque is a criminal offence.
- There may be imprisonment up to 2 years or monetary penalty (can be double the amount of cheque) or both.
- Bank can also stop the cheque book facility and close the account as per RBI Guidelines.