What Happens If A Check Bounces? Cheque Bounce Law, Penalty & Reasons

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When one side pledges to transfer a certain amount of money to another side through the Bank in a written format, it is called Cheque. Cheque bounce defines a condition when the check can not provide the pledged cash for some reason.

If somehow the Cheque is bounced or declined to contravene, then it would not provide pledged money. And the cheque bounce penalty will be assigned in this case. From this article, you will get all the information related to cheque bounce and a solution on how to escape from cheque bounce case.

Cheque Bounce Example

If we consider an example related to check bounce, we would understand it with more insight quickly.

Suppose John went to the Bank for issuing a cheque to Harry of rupees 5000/-, but from the bank statement, John does not have 5000/- in his savings account presently. So, the Cheque will be declined or dishonoured. In that case, the Bank is unable to pay the promised amount of Cheque and rejects the Cheque.

In case of cheque bounce, the receiver’s party’s Bank immediately informs “Cheque Return Memo” to the sender’s party’s Bank, mentioning the cheque bounce reasons for declination. Afterwards, the sender should pay the money within the mentioned time, given in the Cheque, by exposing dishonoured causes. 

After that, the receiver must notice the drawer within 30 days from the date of receipt in “Check Return Memo” from the Bank. This notice will say that the payment will be sent to the receiver within 15 days after getting the sender’s information.

These activities need to be done according to the cheque bounce law.

What are the reasons for the check bounce?

how to escape from cheque bounce case

Cheque bounces occur due to some unknown check bounce reasons for breaking cheque bounce law, like lack of knowledge on the Bank’s terms and conditions, some wrong steps, etc. 

Here are some reasons for declining the Cheque described below, which will also help you know how to escape from the cheque bounce case:

  1. Overwrite means disobedience of the cheque bounce law. You need to know the proper way of writing a cheque. 
  2. The signature should be the same every time of signing with the sample, verified by the Bank.
  3. The receiver’s name should be clearly written, which is easy to understand and readable. A cheque will not be issued if the receiver’s name is not given.
  4. The given amount should be the same, which is written in digit and words.
  5. The account number should be written neatly and cleanly. In the absence of the account number, the Cheque will not be issued anyway.
  6. If the receiver requests or orders to stop the transaction, then also the cheques can bounce.
  7. In the case of expiry or sudden death of the receiver, then the Bank stops the transaction.
  8. If the receiver has closed his/her account before receiving money by cheques, the Cheque can also bounce.
  9. A different signature on the Cheque also bounces the Cheque.
  10. In the absence of a date, or incorrect date, the transaction will not proceed further, and the Cheque will bounce.
  11. If any instructions have come from the court that the Bank will do no transactions. 
  12. If the account does not permit to deliver the promised amount, then also Cheque can bounce.

These are some of the cheque bounce reasons. By following these instructions properly, you can know how to escape from cheque bounce case by preventing it from happening by following the proper measures.

Cheque Bounce Penalty 

If a check bounces, there are several reasons and several consequences as the cheque bounce penalty. According to the law, the check bounce activity in India is considered as a criminal offence. For punishment, two years of detention act is obtained, or twice the amount will be deducted as the monetary penalty or cheque bounce penalty. The decisions will be taken by the court.

What happens if a check bounces?

cheque bounce law

From the above discussion, we have seen that the bouncing or declining the Cheque is subject to negotiation under the Lawyers Act, 1881. Cheque bounce reasons include inadequate balance in the drawer bank or any reason if the check bounces, it will be considered liable for punishment. The extent of punishment will be decided from the court, which may be confinement or fine.

If we try to depict the facts of giving cheque bounce penalty, and what happens if a check bounces, we may sum up these scenarios given below:

Scenario 1

The check you are issuing to your fellow or relatives may bounce due to inadequate balance in accounts or any technical difficulties.

Monetary Penalty

The sender and receiver party have to give fine to their Banks. This is what happens if a check bounces in this scenario.

Scenario 2

If your check may bounces when you are going to issue a cheque to reimburse the loan.


In this situation, you have to pay a particular amount of reimbursement and extra charges, assigned for the penalty.

Scenario 3

Some technical difficulties may cause bouncing Cheque, such as a discrepancy in signature or absence of the signature.


In this scenario, you may need to give more or fewer Rs.100 to the Bank. This is what happens if a check bounces.


In most banks, up to Rs.300 will be considered a penalty charge, and the inward return is about Rs. 100. So, now you get an idea about what happens if a check bounces. Let’s have a look at how to escape from cheque bounce case.

How to escape from cheque bounce case?

If your check bounces for any reason, then you will receive a notice from the court. Here, we will discuss how to escape from cheque bounce case.

  • Maybe in some scenarios, the receiver party faces from fraud check bouncing problem. Then the party can give a reply to the file counter by explaining the reason for cheque bouncing or whatever threat or blackmailing the person has faced.
  • You may also take action against the blackmailer, who has given you a fraud check bouncing case.
  • Raise your objections to the higher authorities or bank employees.
  • You may contact some lawyers and send them to court to get justice.

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