CHEQUE BOUNCING LAW

A Cheque is a bill of exchange drawn from a designated banker and payable only on demand. Legally, the person who issued the Cheque is called 'drawee' and the person for whom the Cheque is issued is called 'payee.' The following are the essential characteristics of the Cheque:

•It has to be in writing
•It has to be an unconditional order
•Banker has to be specified
•Payment should be directed to a specified person
•It should be payable on demand
•It should be for a specific sum of money
•Should have the signature of the drawer

CHEQUE BOUNCE REASONS

A Cheque is said to have been disheartened or rebounded when it is presented to a bank for payment, but it is not paid for some reason or another. The following are some of the reasons why the Cheque is generally bounced:

•Signature is not matching
•There is overwriting in the cheque
•Cheque was presented after lapse of three months, i.e. after the cheque has expired
•Account was closed
•Insufficient funds in the account
•Payment stopped by the account holder
•Opening balance insufficient
•Disparity in the words and figures mentioned on the cheque
•In case the cheque is issued by a company, the same does not bear the seal of the company
•Mismatch in account number
•In case of joint account where both signatures are required, only one sign is there
•Death of the customer
•Insolvency of the customer
•Insanity of the customer
•Crossed cheque
•When a cheque is issued against the rules of trust
•Alteration in cheque
•Doubt in genuineness of the cheque
•Presented at the wrong branch
•Crossing limit of overdraft (OD)