Yes, criminal proceedings can be initiated for a cheque bounce under Section 138 of the Negotiable Instruments Act, 1881. This law allows the payee (the person to whom the cheque is issued) to file a criminal case against the drawer (the person who issued the cheque) if the cheque bounces due to reasons like insufficient funds. The procedure for initiating criminal proceedings is as follows: Cheque Bounce: The cheque is dishonored by the bank due to insufficient funds or other reasons. Notice: The payee must send a legal notice to the drawer within 30 days from receiving the dishonor notice from the bank. Response Time: The drawer has 15 days to make the payment after receiving the legal notice. Criminal Complaint: If the drawer fails to make payment within 15 days, the payee can file a criminal complaint in a Magistrate's Court. The punishment for a cheque bounce can include imprisonment for up to two years or a fine that can be up to twice the cheque amount or both.
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