Answer By law4u team
In India, cheque bounce cases are governed by Section 138 of the Negotiable Instruments Act, 1881. When a cheque is issued from a joint account and gets dishonored, the applicability of the law depends on who signed the cheque. 1. Liability of the Signatory: - The person who signs the cheque is primarily liable under Section 138. - If only one account holder signs the cheque, only that person can be held responsible for cheque bounce. - The non-signing joint account holder is not liable under Section 138. 2. Liability When Both Parties Sign: - If the cheque is jointly signed, both signatories can be prosecuted. - If the payee files a complaint, both signatories must defend themselves in the case. 3. Complaint Procedure: - The complaint must be filed within 30 days from the date of receiving the cheque bounce notice. - The payee must issue a demand notice within 15 days of receiving the cheque return memo from the bank. - If the drawer fails to make the payment within 15 days of receiving the notice, a legal complaint can be filed. 4. Joint Liability Under Companies or Partnerships: - If a cheque is issued by a company or partnership firm, both the company/firm and the signatory can be held liable. - Directors or partners who are involved in the day-to-day operations can be prosecuted if they signed the cheque. 5. Penalties for Cheque Bounce: - Imprisonment up to two years or a fine up to double the amount of the cheque, or both. - The court may also order the drawer to pay compensation to the complainant.
