In India, the maximum fine for a cheque bounce (dishonour of cheque) case is governed by Section 138 of the Negotiable Instruments Act, 1881. The penalties for cheque bounce are as follows: Imprisonment: The person who dishonours a cheque can be punished with imprisonment for a term which may extend to two years. Fine: The court may impose a fine that may extend to twice the amount of the cheque. For example, if the cheque amount is INR 50,000, the fine can be up to INR 100,000 (double the cheque amount). In addition to the fine, the court may also direct the offender to pay the cheque amount to the complainant if the cheque is dishonoured due to insufficient funds or any other reason within the prescribed time frame for payment. Thus, the maximum fine for cheque bounce cases can be twice the amount of the cheque, in addition to possible imprisonment.

Dear Client, According to Section 138 of the Negotiable Instruments Act of 1881, in India, the maximum penalty for cheque bounce is a fine that may be up to two times the amount of the cheque. In addition to the fine, the court may also impose a sentence of up to two years in prison, or both imprisonment and a fine, depending upon the facts. The appropriate penalty is determined by the Magistrate, based on the facts of the case – in particular, the amount of the cheque, the reason for dishonour, and the actions of the drawer. Because of this, courts usually prefer and the Magistrate will appreciate paying the complainant to settle or compromise the matter amicably. I hope this answer helps. For any further queries, please do not hesitate to contact us. Thank you.