A dishonoured cheque can land you jail before case is settled

The government has introduced harsher punishment for cheque bounce cases from next year.

New Delhi, Dec 25: With cheque transactions on the rise post demonetisation, the government has now proposed to introduce stringent action against those whose cheques are dishonoured. If a cheque bounces then the defaulter would be given a month's time failing which he will land in jail even before the case is settled.

Cases relating to cheque bounce comes under the purview of the Negotiable Instruments Act under Section 138. Under this section the accused can face a jail term of two years or with fine of twice the amount of the cheque or both.

Despite a law being in place, the number of cheque bounce cases have been on the rise. In 2014 alone there were 18 lakh cases pending in the courts. The people are not scared of the law and would ensure that the matter dragged on in court. There was no arrest clause until the case was settled. Government sources said that the arrest clause if the matter is not settled in a month's time would act as a deterrent.

The decision to amend the law came after several traders expressed concerns about dishonoured cheques. Post demonetisation the number of cheque transactions have gone up. Fearing that several cheques may be dishonoured, the traders sought for stringent laws.

OneIndia News