The penalties that can apply to a drawer when a cheque bounces are as follows:
In case a cheque issued by a company cannot be encashed by the bank than an individual may seek recourse after fulfilling the conditions given in Section 138. The complaint must be filed and registered in the Magistrate Court. An appeal can be filed in the Sessions Court. Section 142 of the Negotiable Instruments Act, 1881, provides the procedure for filing a complaint.
Penalty by the bank: If your cheque happens to bounce due to insufficient funds or any other technical reason like signature mismatch, both the defaulter and the payee are charged by their respective banks. Negative Impact on your CIBIL score: A bounced cheque can dent your financial credit history.
In 1988, The Negotiable Instruments Act, 1881, was amended and Section 138 was inserted making the bouncing of cheques a punishable offence amounting to a punishment of imprisonment of a term extendable to 2 years, or with fine extendable to double the amount of the cheque or both
According to Section 138 of the Act, 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.
Answer: Yes, you can present the cheque again in the bank for payment, even if it was dishonoured on the first occasion. However, it goes without saying that the cheque can be presented again in the bank only during the period of its validity.
Generally, a bank will redeposit the check twice when there are insufficient funds in your account. However, there are no laws that determine how many times a check may be resubmitted.
