Answer By law4u team
Cheque Bounce Due to Signature Mismatch 1. Legal Validity: - A cheque can be considered dishonored if the signature of the drawer (issuer) does not match the specimen signature available with the bank. - This is treated as a valid reason for dishonor under Section 138 of the Negotiable Instruments Act, 1881. 2. Consequences for the Drawer: - The payee (person to whom the cheque is issued) can initiate legal action under Section 138 if the cheque was issued for the discharge of a legally enforceable debt or liability. - A legal notice must be sent to the drawer within 30 days of receiving the cheque return memo from the bank. 3. Procedure for Filing a Case: - If payment is not made within 15 days of receiving the legal notice, the payee can file a complaint in the Magistrate's court within 30 days after the expiry of the notice period. 4. Possible Defenses for the Drawer: - The drawer may claim that the mismatch was accidental or provide evidence that the cheque was not issued for a legal liability. - The drawer can also attempt to resolve the matter amicably by making the payment before the complaint is filed. 5. Penalty and Punishment: - Conviction under Section 138 can result in imprisonment of up to two years or a fine that may extend to twice the cheque amount, or both. - The drawer may also face civil liabilities for recovery of the amount.
