Handling of Bounced Cheques Due to Technical Reasons 1. Definition of Technical Reasons: - Cheques can be dishonored due to technical issues such as: Signature mismatch. Date errors (e.g., post-dated or stale cheques). Overwriting or alterations without authentication. Mismatch of account details. Incomplete or illegible writing. 2. Legal Position under Section 138 of the Negotiable Instruments Act, 1881: - Section 138 applies to cheque bounce cases related to insufficient funds or account closure. - Technical reasons generally do not attract Section 138 prosecution unless it is proven that the cheque was deliberately altered to avoid payment. 3. Remedy for the Payee: - If the cheque is bounced for technical reasons, the payee should contact the drawer and request re-issuance of a valid cheque. - Banks usually provide a Cheque Return Memo stating the reason for dishonor. 4. Possible Legal Action: - If the drawer refuses to provide a valid cheque, the payee can issue a legal notice demanding payment within 15 days (if the reason for dishonor is related to Section 138). - For technical reasons, the legal remedy would typically be through a civil suit for recovery if not covered under Section 138. 5. Precautions to Avoid Technical Bounce: - Ensure signatures match the bank's records. - Avoid overwriting or corrections. - Ensure cheque details are filled out correctly and legibly.