In recent days Check is popularly used as a medium of financial transaction among Business Corporations and as well as Individuals. Therefore now a days Cheque Dishonour or Cheque Bounce is a very common issue. The receiver of the Cheque therefore must have effective and sufficient remedy. In this Article we will discuss the following issues regarding Cheque Dishonour in Bangladesh.
- Definition of Cheque ?
Section 6 of The Negotiable Instruments Act, 1881 defines the term Cheque as follows: A “Cheque” is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.
A Cheque is a written order or request, addressed to a bank or persons carrying on the business of banking, by a party having money in their hands, desiring them to pay, on presentment, to a person therein named, or bearer, or to such person or order, a named sum of money.
- Kinds of Cheque
- Cash/Bearer Cheque
- Account Payee Cheque
- Contents of a Chque
- Date of Issue
- Name of the Recipient
- Amount in Numerical and Words
- Signature of the Payee
- Cheque Dishonour
To Dishonour a cheque means is to refuse or neglect to pay it at maturity.
- Reason of Dishonour
- Insufficient Fund.
- Amount in figure and word differs
- Cheque out of date/post-dated Cheque
- Drawer’s Signature Differs
- Payment stopped by drawer.
- Crossed Cheque; To be presented through a Bank
- Payee’s endorsement required
- Effects not cleared, may be presented again
- Payee’s endorsement irregular/Bank’s Confirmation required
- Alterations in date/figures/words require drawer’s full signature
- Clearing stamp required/requires cancellation/endorsement of the Bank
- Addition to Bank discharge should be authenticated
- Cheque crossed Account Payee only
- Collecting Bank’s Discharge irregular/required
- Not drawn on us
- Mutilated Cheque
- Account Closed
- Refer to Drawer
- Applicable Law
In Bangladesh Cheque Dishonour and its consequences are regulated by the provisions of the Negotiable Instrument Act 1881. The Negotiable Instrument Act is specially enacted so that the Complainant can get relief under this Act easily and speedily.
- Conditions for filing a Case
The Recipient of a Cheque can file a Criminal Case against the Payee if the Cheque has been dishonoured by the Bank. However according to Section 138 of the Negotiable Act 1881 the Recipient must have to fulfilling the following conditions before filling the case:
- Presenting the Cheque before the Bank: The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity.
- Collecting Dishonour Slip: After presenting the Cheque before the Bank if the Cheque is Dishonoured by the Bank for any reason, then the Bank shall provide a Dishonour Slip mentioning the reason of such dishonour. The Recipient have to collect the Slip from the Bank.
- Legal Notice: After getting the Dishonour Slip from the Bank the Recipient of the Cheque shall have to serve a Legal Notice to the Payee of the Cheque via Registered Post demanding the payment within 30 (Thirty) days of the receipt of the said notice. If the Payee of the Cheque after receiving the Notice, failed to make the payment to the Recipient of the Cheque within 30 days, then the Receipint can file a Criminal Case against the Payee of the Cheque under the Negotiable Instrument Act 1881.
- Place of Filing the Suit
The Recipient of the Cheque or the Complainant can file the case in any of the Courts in whose jurisdiction any of the following five components of the offence was done. Such as:
- Place of Drawing of the Cheque
- Place of Presentation of the Cheque
- Place of Returning of the Cheque unpaid by the drawee bank
- Place of Giving Notice to the Drawer of the Cheque and demanding the payment of the Cheque amount
- Place of Failure of the Drawer of the Cheque to make payment
If the aforesaid five different acts were done in five different localities any of the courts exercising jurisdiction in one of the five local areas can become the place of Trail for the offcence under the Section 138 of the Negotiable Instrument Act 1881.
- Required Documents For Filing Suit
The Recipient of the Cheque or the Complainant must have the following documents for filing a Suit under the Negotiable Instrument Act 1881. Which are as follows:
- The Cheque
- Dishonour Slip
- Copy of the Legal Notice
- Postal Receipt of the Legal Notice
- Acknowledgment Due of the Legal Notice
- Punishment under NI Act 1881
The Payee or Drawer of the Cheque shall be punished with imprisonment for a term which may extend to one (01) year, or with fine which may extend to thrice the amount of the cheque, or with both.