This article will provide you with latest legal provisions relating to Cheque Bounce Laws and Process in Nepal.
Table of Contents
What is Cheque Bounce?
Cheque bounce is a condition whereby the payee or check holder is unable to withdraw the said amount due to insufficient funds or other several reasons including but not limited to overwriting, signature errors etc. It is also known by the term ‘Check Dishonoring” because the bank is unable to honor the cheque.
What is Cheque Bounce laws and process in Nepal?
The issue of cheque bounce can be resolved legally through two different ways in Nepal. Choice can be made by the aggrieved party whether to take the case forward as a criminal matter or civil matter. The are two distinct laws that govern the matter of cheque bounce in Nepal. They are:
Negotiable Instrument Act, 2034
Banking Offence and Punishment Act, 2064
What happens if cheque bounces in Nepal?
The case is taken forward either as a criminal case by filing FIR or civil matter by filing firadpatra in the concerned district court.
CHEQUE BOUNCE CASE AS CRIMINAL OFFENCE
Under Banking Offence and Punishment Act, 2064, cheque bounce case is initiated as a criminal case. The aggrieved party proceeds by filing an FIR against the accused in the nearest police station.
How to file cheque bounce case in Nepal? (Step wise process)
Step 1 : FIR filing
Step 2 : Investigation by Investigating authority
Step 3: Filing of banking offence file by government attorney
Step 4: Hearing of the case by judge of the court, examination of witness etc
Step 5: Decision by the court.
Time limitation for filing FIR
Time limitation for filing FIR in banking offence is 1 year from the date of offence.
Remedies for cheque bounce
The aggrieved party shall recover the principal amount.
The defaulter shall have to pay principal amount along with a fine
The defaulter shall have to serve the punishment of imprisonment of up to 3 months.
CHEQUE BOUNCE CASE AS CIVIL MATTER
Under Negotiable Instrument Act, 2034, cheque bounce case is initiated as a civil case. Under this Cheque Bounce Laws and Process in Nepal is a bit different. The aggrieved party proceeds by filing a complaint paper i.e. firadpatra against the accused in the concerned district court.
Step wise process
Step 1 : Firadpatra filing in the concerned District Court.
Step 2 : Filing of response by the defendant ( Pratiuttarpatra)
Step 3: Hearing of the case by judge of the court, examination of witness etc.
Step 4: Decision by the court.
Time limitation for filing FIR
Time limitation for filing Firadpatra in banking offence is 5 years from the date of offence.
Remedies for cheque bounce
The aggrieved party shall recover the principal amount as well as interest of it.
The defaulter shall have to pay principal amount along with a fine up to three thousand rupees.
The defaulter shall have to serve the punishment of imprisonment of up to 3 months.
Note : Before initiating any process either through police or court, the cheque in question must be bounced at least 3 times. The bouncing can be done in any branch of the bank of which the cheque is issued. However, the branch where you bounce the cheque will help you in determining the jurisdiction of the court for legal proceedings, which is why you may take this thing into consideration too.
Also read Capital Gain tax in Nepal.
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