Dishonor of Cheque

Liability under the negotiable instruments act

• Where any cheque drawn by a person for the discharge of a liability is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honor the cheque or;
• That it exceeds the amount arranged to be paid from that account by an agreement made with that bank

Such person cheque shall be deemed to have committed an offence and shall be punishable with imprisonment for a term, which may extend to two year, or with fine, which may extend to twice the amount of the cheque or with both.