Handling of Bounced Cheques Due to Technical Reasons 1. Definition of Technical Reasons: - Cheques can be dishonored due to technical issues such as: Signature mismatch. Date errors (e.g., post-dated or stale cheques). Overwriting or alterations without authentication. Mismatch of account details. Incomplete or illegible writing. 2. Legal Position under Section 138 of the Negotiable Instruments Act, 1881: - Section 138 applies to cheque bounce cases related to insufficient funds or account closure. - Technical reasons generally do not attract Section 138 prosecution unless it is proven that the cheque was deliberately altered to avoid payment. 3. Remedy for the Payee: - If the cheque is bounced for technical reasons, the payee should contact the drawer and request re-issuance of a valid cheque. - Banks usually provide a Cheque Return Memo stating the reason for dishonor. 4. Possible Legal Action: - If the drawer refuses to provide a valid cheque, the payee can issue a legal notice demanding payment within 15 days (if the reason for dishonor is related to Section 138). - For technical reasons, the legal remedy would typically be through a civil suit for recovery if not covered under Section 138. 5. Precautions to Avoid Technical Bounce: - Ensure signatures match the bank's records. - Avoid overwriting or corrections. - Ensure cheque details are filled out correctly and legibly.

Dear Client, Technical cases of cheque bounce are usually not considered offences under Section 138 of the Negotiable Instruments Act, 1881, which specifically deals with cheque dishonour due to insufficiency of funds or where the amount exceeds the agreement with the bank. Technical grounds could be anything from a signature mismatch, overwriting, stale cheque or post-dated cheque, cheque which is torn, wrong date format, to even a bank oversight such as freezing the account. In all these instances, the dishonour would not amount to a legal basis for filing criminal proceedings under Section 138. If a cheque is returned for technical reasons like these, the payee tends to notify the drawer and ask for the mistake to be rectified or for a fresh cheque to be drawn. Once the technical mistake has been corrected, the cheque may be re-presented. Legal action under Section 138 applies only when the cheque, when properly drawn and properly presented, is dishonoured by the insufficiency of funds or other financial reasons, and the drawer does not make payment within 15 days from the receipt of a statutory legal notice from the payee. Briefly, a cheque has bounced technically and does not cause criminal liability but can cause inconvenience or damage to reputation. Only reasons for dishonour due to financial motives attract penalties in terms of law. I hope this answer helps. In case of future queries, please feel free to contact us. Thank you.