Legal Remedy for Cheque Bounce in Nepal
By Arch Legal Services On 08-08-2022Category : Uncategorized
Legal Remedy for Cheque Bounce in Nepal
What is Cheque Bounce?
Cheque Bounce is the situation in which, Bank & Financial Institution refuses to exchange the cheque for cash issued by any person/entity to any other for any reason. Cheque Bunce could occur by various reasons like insufficient funds in the account of the issuer, mistake in the signature or date, or else.
Today, Cheque Bounce mostly occurs as there is an unethical Business practice of issuing cheques where there is an insufficient amount in the bank account.
Is Cheque Bounce a crime?
Yes, Cheque Bounce is a criminal offense. Banking Offence Act 2064 has categorized Cheque Bounce as a criminal offense.
Laws Applicable for Remedy
There are 2 different laws that gives two different types of remedy to the victim of cheque bounce.
1. Banking Offence Act 2064 (Criminal remedy)
2. Negotiable Instrument Act 2034 (Civil remedy)
Legal Remedy for the Cheque Bounce
There are 2 different types of remedy available for the victim in case of cheque bounce.
1. Civil Remedy
2. Criminal Remedy
Note: The cheque should be bounced by the bank usually for 3 (three) times.
Remedy under Civil Law
Civil remedy for the Cheque Bounce is available through the Negotiable Instrument Act 2034. Under this, the process goes a below:
· Victim need to file a petition at the concerned District Court.
· District Court issues Summon to the opponent party.
· Opponent party files written response to the petition.
· Witness Examination
· Final Hearing
· Unsatisfied party can file an appeal to the High Court.
Note: Time Limitation to file case in District Court: 5 (Five) years from the date of event (event here denotes the date at which the cheque has been bounced for the last time).
Remedy under Criminal Law
Criminal remedy for the Cheque Bounce is available through the Banking Offence Act 2064. Under this, the process goes a below:
· Victim should file a FIR at Police station nearby.
· Police Station in consultation with Government attorney shall investigate the case.
· Government attorney prepare a Charge Sheet and register it to the concerned High Court.
· Jail/Bail hearing occurs at High Court.
· Witness examination
· High Court gives Final Decision.
· Unsatisfied party can file an appeal to the Supreme Court.
Note: Time Limitation to file FIR: 1 (One) year from the date of event.