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Cheque Bounce

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About Cheque Bounce

A situation of cheque bounce is basically a term used to define the unsuccessful processing of a dispensed cheque due to several reasons. Non-sufficient funds (NSF) in the issuer’s account is one of the primary reasons for a bounced cheque. The banks return or dishonour the cheques, also known as rubber checks, in addition to imposing a particular charge. Further, the passing of bad cheques can be illegal, and this crime can be aggravated depending on the amount and whether this action involves crossing state boundaries.


There are instances when the issuer isn’t actually aware of the reason why the cheque is dishonoured by the bank. Hence, we have focused on some of the major and underlined reasons of cheque bounce that should be avoided.

Insufficient Funds

If your account lacks funds from which the cheque is issued, then there is a high chance for the cheque resulting to bounce. Also, if you have issued or have received a cheque connected to an account which holds less money than the amount written on the cheque, then the bank wouldn’t be able to process the full amount and hence will curb the payment and dishonour the cheque.
Considering this scenario, the bank will levy a nominal penalty imposed on both the parties – the issuer as well as the depositor. Later, the issuer has an option to either issue a new cheque or resolve the trouble with the receiver/depositor of the cheque. Moreover, the receiver of the cheque also holds an option to start a legal action against the issuer for non-payment and cheque dishonour. Therefore, it is advised be stay alert and careful while issuing a cheque and ensure an appropriate balance in the account.

Date Mentioned on Cheques

The date is a vital part of the cheque and any sort of difference or problem with the date would end in your cheque being bounced. Most people consider it as a small factor but can cause serious issues with your cheque not getting processed. The typical problems which an issuer can face regarding the cheque date mainly include disfigured or scribbled numbers. Also, in case the date has expired on the cheque , then it surely gets dishonoured. In other words, if the date on the cheque is 3 months old from the present date, then the bank can bounce the cheque.

Signature Mismatch

It is a common reason for cheque bounce that is experienced by many people across India. If the signature is mismatched or doesn’t actually match with the bank’s records, then the issued cheque will be tagged as a bounced cheque. It is important to regard the signature as a prominent aspect while writing a cheque. Also, if the issuer by chance signs on the MICR Band present on the cheque, then in this situation the bank would once again disrepute the cheque.

Difference in Amount Mentioned in Numbers & Words

Suppose your cheque highlights a difference in the amount payable written in words and in numbers, then the concerned bank will bounce that cheque. Further, if the amount mentioned in the words section consists any numeric value, the amount in figures/numbers column includes any alphabet, then it can directly cause the cheque to bounce.

Damaged Cheque

Whenever you handle a cheque, make sure that it isn’t damaged or disfigured. Why? The various banks across India do not entertain disfigured cheques on which the details aren’t clearly visible. Moreover, if your cheque has too many stains or marks, then that cheque will bounce.

Overwriting on Cheque

Any type of scribbling, correction or overwriting on a cheque is not acceptable. Such a cheque would be dishonoured immediately. It is always safe to issue a fresh cheque if any mistake occurs while filling the previous cheque. Also, do not receive a cheque with mistakes , always demand a newly written cheque.


The penalties that can apply to a drawer when a cheque bounces are as follows:

  • Imprisonment which may extend to 2 years.
  • A fine double the amount which was supposed to be paid.

File a Case if Cheque Bounces

In case a cheque issued by a company cannot be encashed by the bank than an individual may seek recourse after fulfilling the conditions given in Section 138. The complaint must be filed and registered in the Magistrate Court. An appeal can be filed in the Sessions Court. Section 142 of the Negotiable Instruments Act, 1881, provides the procedure for filing a complaint.


  • A complaint must be made in writing by the payee.
  • The complaint must be made within one month of serving notice and fifteen days of non-payment.
  • No court inferior to the Metropolitan Magistrate or the Judicial Magistrate can try the case.
  • No Complaint to be Entertained After One Month

Documents Required to File a Case

  • An affidavit.
  • A copy of the notice sent as well as the post receipt.
  • The original cheque along with the memo of return from the bank.

Frequently Asked Questions

Penalty by the bank: If your cheque happens to bounce due to insufficient funds or any other technical reason like signature mismatch, both the defaulter and the payee are charged by their respective banks. Negative Impact on your CIBIL score: A bounced cheque can dent your financial credit history.

In 1988, The Negotiable Instruments Act, 1881, was amended and Section 138 was inserted making the bouncing of cheques a punishable offence amounting to a punishment of imprisonment of a term extendable to 2 years, or with fine extendable to double the amount of the cheque or both

According to Section 138 of the Act, the dishonour of cheque is a criminal offence and is punishable by imprisonment up to two years or with monetary penalty or with both. If payee decides to proceed legally, then the drawer should be given a chance of repaying the cheque amount immediately.

Answer: Yes, you can present the cheque again in the bank for payment, even if it was dishonoured on the first occasion. However, it goes without saying that the cheque can be presented again in the bank only during the period of its validity.

Generally, a bank will redeposit the check twice when there are insufficient funds in your account. However, there are no laws that determine how many times a check may be resubmitted.


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