Bounced cheques: Bill proposes 20 per cent interim compensation

If the drawer of the cheque is acquitted, the court should direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within 60 days from the date of the order, or within such further period not exceeding 30 days as may be directed by the Court on sufficient cause being shown by the complainant, says the new Bill.

According to the Bill, the interim compensation payable under this section may be recovered as if it were a fine under section 421 of the Code of Criminal Procedure, 1973. The amount of fine imposed under section 138 or the amount of compensation awarded under section 357 of the Code of Criminal Procedure, 1973, should be reduced by the amount paid or recovered as interim compensation under this section.

Section 138 of the Act says the dishonour of cheque is a criminal offence and is punishable by imprisonment up to two years or with monetary penalty or with both. If payee decides to proceed legally, then the drawer should be given a chance of repaying the cheque amount immediately. “Banks charge around Rs 300 as penalty for bounced cheques. A customer can redeposit a bounced cheque. But he should confirm that the money is available before submitting the cheque to his bank,” said a bank official.

Reserve Bank guidelines say that cheque return charges can be levied only in cases where the customer is at fault and is responsible for such returns.

In France, it is a criminal offence to write a cheque without sufficient funds in the account. Customers who are responsible for bounced cheques are potentially liable to criminal fines and banned from being able to use write a cheque for up to five years in France.