What are the key benefits of SBI Credit Cards?

SBI Credit Cards offer a wide range of benefits, including rewards, cashback, lounge access, discounts, and insurance coverage.

How can I apply for an SBI Credit Card?

You can apply for an SBI Credit Card online through the Paisabazaar platform, where you can compare card options and check for pre-approved offers.

What factors should I consider when choosing an SBI Credit Card?

Consider your spending habits, lifestyle, and financial goals to select a card that best suits your needs, such as travel, shopping, or rewards.

How can I manage my SBI Credit Card efficiently?

SBI Card offers a user-friendly mobile app and online banking services to help you manage your card, check statements, make payments, and access additional features.

What precautions should I take to avoid accumulating credit card debt?

Responsible credit card usage includes paying bills on time, managing credit limits wisely, and avoiding unnecessary spending to prevent debt accumulation.

Consequences of Cheque Bounce Notice

Cheque bounce notice has severe consequences for those involved, as it is considered an offense under Section 138 of the Negotiable Instruments Act, 1881. Offenders can face harsh penalties such as a fine that may amount to twice the cheque's value or a prison term of up to two years, or even both. A bounced cheque occurs when the payee presents it to the bank for payment, only for the bank to return it unpaid due to insufficient funds.

There are various reasons why a cheque may bounce, but if it happens due to insufficient funds in the drawer's account, it is illegal under the Act. In such cases, the bank must reject the cheque and provide a return memo stating the reason as insufficient funds. Following this rejection, the payee has the right to issue a cheque bounce notice to demand payment of the cheque amount from the drawer.

New Rule Regarding Cheque Bouncing

Recently, the Reserve Bank of India (RBI) introduced a new rule, effective August 2021, that affects customers who heavily rely on cheques for financial transactions or those intending to use them. According to this rule, these customers must ensure they maintain a minimum bank balance; otherwise, their cheques will bounce. Moreover, if a cheque bounces due to insufficient funds, the customer who issued the cheque may face a penalty fee. The RBI also announced that the National Automated Clearing House (NACH) would operate 24 hours a day, improving the efficiency of cheque clearing.

It's important to note that these rule changes apply to all national and private banks. The aim is to expedite the cheque-clearing process and make it more efficient. With NACH operational every day of the week, including Sundays, cheques can be processed and cleared more smoothly.

Different Circumstances Leading to Cheque Bounce

Cheque bouncing can occur due to various circumstances. The following situations can result in a cheque bounce:

1. Insufficient account balance: If the drawer's account lacks sufficient funds to cover the cheque amount, the bank will reject the cheque with a memo citing insufficient funds.

2. Expired validity of cheque: Cheques must be presented for payment within three months of issuance. If they are not presented within this timeframe, they become invalid, and any attempt to deposit them will result in the cheque bouncing.

3. Overwriting: If any part of the cheque, such as the drawer's signature, cheque amount, or other details, is overwritten, the cheque may bounce.

4. Damaged cheque: Cheques that are damaged, disfigured, or have unclear details, marks, or stains may bounce when presented to the bank.

5. Signature mismatch: If the drawer's signature is unclear, missing, or does not match the signature on record at the bank, the cheque may bounce.

6. Mismatch of amounts or digits: If there is a discrepancy between the cheque amount written in words and figures, the cheque may bounce.

Available Remedies Against Cheque Bounce

When a cheque bounces due to issues such as overwriting, signature mismatch, mismatch of amounts or digits, or a damaged cheque, the payee has the option to request that the drawer submit another cheque to rectify the mistake. If the drawer refuses, the payee can initiate civil action to recover the cheque amount, not the cheque bounce charges.

Under Section 138 of the Negotiable Instruments Act, a cheque bounce notice can be issued when a cheque bounces due to insufficient funds. However, if the cheque bounces for any reason other than insufficient funds, a cheque bounce notice cannot be issued, and the payee can demand the resubmission of the cheque.

Process of Issuing a Cheque Bounce Notice

To address a cheque bounce due to insufficient funds, the first step is to issue a cheque bounce notice in writing via post, according to the provisions in the Negotiable Instruments Act. The payee must send this notice within 30 days of receiving the intimation from the bank about the cheque bouncing due to insufficient funds.

Once the cheque bounce notice has been issued, the drawer has 15 days from receipt of the notice to settle the cheque amount. Failure to do so allows the payee to initiate legal action against the drawer within 30 days after the expiry of the 15-day deadline.

It's important to note that a cheque bounce notice cannot be issued for cheques issued as donations, gifts, or any other non-legally enforceable obligation. The cheque must have been issued to fulfill a legally enforceable liability or debt to constitute an offense under the Act.

Responding to a Cheque Bounce Case

If faced with a cheque bounce case, it is crucial to respond appropriately. The first step is to either reply to the legal notice, stating your defense or pay the cheque amount to avoid further legal proceedings. Before responding, it is advisable to consult a legal practitioner experienced in cheque-bouncing cases to ensure proper guidance. Resolving the matter at the initial stage by paying the cheque amount can prevent further legal complications.

When replying to a legal notice, there is no specific format, but the following details should be included:

1. Address the reply to the lawyer of the drawer mentioned in the legal notice.

2. Clearly provide your description, name, and address.

3. Present the facts of the issue, including the date of issuance and cheque return memo.

4. Refute any allegations made against you.

5. Avoid admitting to any claims mentioned in the notice.

6. Raise any complaints against the drawer, if applicable.

7. Summarize your defense against the allegations raised in the legal notice.

8. Ensure your reply is sent on a lawyer's letterhead.

Failure to reply to the legal notice or pay the cheque amount within 15 days can lead the drawee to file a complaint against you, initiating legal proceedings.

In a cheque bounce suit, a complaint must be filed before the Magistrate within 30 days after the expiry of the 15-day deadline. The jurisdiction for filing the complaint can be any of the following places: where the cheque was drawn, where it was presented for payment, where the payment was supposed to be made, where the cheque bounced, or where the demand notice was served.

The process of a cheque bounce suit involves the following steps:

1. The complainant files a complaint before the Magistrate after 15 days have passed since the receipt of the cheque bounce notice.

2. The complainant presents the case details to the court, and if satisfied, the Magistrate issues a summons to the drawer to appear in court.

3. The drawer appears in court and either accepts or denies the facts stated by the complainant. If the drawer denies the complaint, the court proceeds with the criminal trial.

4. The accused/drawer files their statement, and evidence and arguments from both sides are presented to the court.

5. If the court finds the drawer guilty of the offense of cheque bouncing, a judgment of conviction is issued, which may include imprisonment for up to two years, a fine of double the cheque amount, or both.

6. Alternatively, a civil suit can be filed against the drawer to recover the cheque amount. A civil suit does not result in punishment for the offender but aims to facilitate the recovery of the cheque bounce amount.

It's worth noting that a cheque bounce notice can also be issued against a company. In such cases, a criminal suit can be initiated under Section 148 of the Act, which holds both the company and its directors accountable for the offense of cheque bouncing.

However, if the drawer pays the cheque amount within 15 days of receiving the cheque bounce notice, no offense has been committed, and no further legal action can be taken against them under Section 138 of the Act.

Understanding the consequences and procedures involved in cheque bouncing cases is crucial for both payees and drawers to navigate the legal system efficiently and protect their rights.