COURT PROCEDURE / PROCEEDING/ PROCESS in 138 NI ACT / CHEQUE BOUNCE CASE | GO LEGAL

Negotiable Instruments have been used in the commercial world for a long as one of the convenient modes for transferring money. Development in the Banking sector and with the opening of new branches, cheques become one of the favorite Negotiable Instruments. When cheques were issued as Negotiable Instruments, there was always the possibility of the same being issued without a sufficient amount in the account. With a view to protecting drawee of the cheque need was felt that dishonor of cheque, he made a punishable offense. For that purpose, Sec.138 to 142 were inserted by Banking Public Financial Institutions and Negotiable Instruments clause (Amendment) Act, 1988. This was done by making the drawer liable for punishments in case of bouncing of the cheque due to insufficiency of funds with adequate safeguards to prevent harassment of an honest drawer

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