In India, cheque remains a popular mode of payment for transactions involving larger sums. However, cheques can sometimes bounce even with proper precautions, causing inconvenience and legal hassles.

Top 10 Legit Reasons For Cheque Bounce In India

Understanding the Reasons for Cheque Bounce can help you avoid such situations.  Here’s a breakdown of the top 10 reasons For cheque bounce in India: 

1. Insufficient funds (NSF)

This is the most common reasons for cheque bounce. It simply means there aren’t enough funds in your account to cover the cheque amount. This can happen due to various reasons like forgetting about an upcoming debit, unforeseen expenses, or a simple calculation mistake.

How Non-Sufficient Funds Fees Work In India?

Banks typically charge a penalty for Non-Sufficient Funds cheques. This fee can vary depending on the bank and the amount of the cheque.

Why Do Banks Charge An NSF Fee?

Banks charge NSF fees to recover the cost of handling a failed transaction caused by insufficient funds in your account.

How To Avoid A Non-Sufficient Funds Situation?

Banks charge NSF fees to recover the cost of handling a failed transaction caused by insufficient funds in your account.

  • Maintain a buffer in your account to cover unexpected debits. 

  • Regularly monitor your account balance online or through mobile banking.

  • Issue cheques only when you’re confident that you have sufficient funds.

2. Account Closed

If the drawer’s default bank account has been closed, any cheques issued from that account will automatically bounce. Account closure is one of the reasons for cheque bounce in India that can happen due to inactivity, dormancy, or a request from the account holder. 

3. Post Dated Cheque

A post-dated cheque is a cheque with a future date written on it. It instructs the bank to not pay the cheque until that specific date arrives. Presenting a post-dated cheque before the written date is a common reason for a bounce. 

How A Post-Dated Cheque Causes Cheque Bounce?

Presenting a post-dated cheque before the date or out-of-date can lead to a bounce due to insufficient funds or inadequate balance or because the bank isn’t authorized to process it yet. 

How To Prevent Cheque Bounce Through Post-Dated Cheque?

  • Write the future date on the cheque.
  • Communicate the date to the payee and ensure they present it after that date.

4. Stale Cheque

A Cheque is considered stale if it’s not presented for encashment within a specific timeframe (typically three months from the date written on it.)

Cheque Bounce Case Due To Stale Cheque

Presenting a stale cheque can result in a bounce because the bank may not be obligated to honor it after the validity period.

What Is The Time Limit For Stale Cheques?

The Negotiable Instruments Act specifies a 3 months validity period for cheques. However, it’s best to present cheques as soon as possible to avoid any issues.

5. Mismatched Signature

The signature on the cheque should exactly match the bank’s record of your signature. It is one of the reasons for cheque bounce in India. Any discrepancy or Unauthorized Signature can lead to a bounce.

Does Signature Mismatch Cause Cheque Bounce?

Absolutely! Even a minor difference between your signature on the cheque and the one on file can cause the bank to reject it.

How To Avoid Signature Mismatch?

Always sign your cheques carefully to avoid Irregular signatures, ensuring they match the signature you provided while opening the account.

6. Crossed Cheque

A crossed cheque can only be deposited into a bank account, not cashed over the counter. It is also one of the reasons for cheque bounce in India.

What Is A Crossed Cheque?

A crossed cheque is a security measure to prevent fraudulent encashment.

How Does A Crossed Cheque Work?

When you cross a cheque, it can only be deposited into a bank account, not cashed directly.

How Does A Crossed Cheque Cause Cheque Bounce?

Presenting a crossed cheque or Damaged cheque to be cashed over the counter instead of depositing it can lead to a bounce.

7. Altered Cheque

Any unauthorized changes made to the cheque’s amount or other details can be considered an Altered Cheque. Banks may bounce such cheques due to alteration issues.

What Is An Altered Cheque?

An altered cheque is a cheque that has been tampered with after it was issued.

Cheque Bounce Due To Altered Cheque

 If someone changes the amount on your cheque without your permission, the bank may bounce it due to the alteration.

8. Frozen Or Blocked Account

 If your bank account is frozen or blocked due to suspicious activity, insolvency concerns, or a legal injunction, any cheques issued from that account will bounce.

What Is A Frozen Or Blocked Account?

A frozen or blocked account restricts the account holder from accessing or using the funds.

Reasons For A Frozen Or Blocked Account

Banks may freeze accounts due to various reasons, including:

  • Suspected fraudulent activity
  • Uncollected Cheques or defaults on payment
  • Court order for investigation of funds

Things You Must Not Do When Your Bank Account Is Frozen Or Blocked:

  •  Don’t attempt to withdraw or transfer funds.
  • Don’t write new cheques.
  • Contact your bank immediately to understand the reason for the account Freeze and how to resolve it.
  • Frozen Or Blocked Account Leads To Cheque Bounce Any cheque issued from a frozen account will bounce due to the restriction on debit transactions.

9. Cheque Bounce Due To Payment Stopped By The Account Holder

The drawer has the right to instruct their bank to stop payment on a cheque before it’s presented. Payment stoppage can be done if the cheque is lost, stolen, or issued due to an unintentional mistake. However, the drawer might need to pay a fee for this service.

10. Refer to Drawer

In some cases, the reason for the cheque bounce might not be readily apparent. The bank may return the cheque with “Refer to Drawer” written on it. This indicates the bank needs to verify details with the drawer before processing the cheque.

Remedies If You Fall In Any Of The Reasons For Cheque Bounce In India

The procedure for remedy in case of cheque bounce as per Section 138 of the Negotiable Instruments Act are:

  1. Cheque Presentation: The cheque must be presented to the bank within 3 months from the date the cheque is drawn or within its validity period, whichever is earlier Duplicate presentation of cheque can lead to penalty or offense.
  2. Demand Notice: The payee must send a demand notice to the drawer within 30 days of receiving the cheque bounce information. This notice requests payment of the cheque amount.
  3. Drawer Fails to Comply: If the drawer (the person who issued the cheque) fails to make payment within 15 days of receiving the demand notice, the payee can initiate a legal suit.
  4. File a Complaint: The payee can file a complaint with the court of Judicial Magistrate First Class or Metropolitan Magistrate along with an affidavit.

To Know More Information About Cheque Bounce And Reasons For Cheque Bounce In India, Contact M&M Law Partners

MandM’s experienced lawyers can help you navigate the legalities of cheque bounce, understand your options, and explore the possibility of recovering the bounced cheque amount. M&M Law Partners, The Best Civil Lawyers in Delhi High Court, can also advise you on how to protect yourself from future cheque bounce situations. Don’t hesitate to seek legal guidance to ensure a smooth resolution.



1. What Is The Time Limit For Cheque Bounce Case?

To file a cheque bounce case under Section 138 of the Negotiable Instruments Act, you have 30 days from the expiry of the 15-day notice period given to the drawer to clear the cheque.

2. Why A Cheque Is Rejected?

Besides insufficient funds, cheques can bounce due to various reasons like endorsement problems (missing or irregular endorsements), technical errors (date discrepancies, spelling mistakes), forgery allegations (suspicious signatures), or bank issues like bankruptcy risk (bank closure).

3. Can I Transfer 1 Crore Through Cheque?

While large cheque transfers are possible, banks may have restrictions on high-value cheques exceeding a certain limit. It’s advisable to confirm with your bank beforehand to avoid technical errors or delays.

4. Is The Cheque Case Civil Or Criminal?

A cheque bounce case under Section 138 is considered a criminal offense. However, you can also pursue civil action for recovery of the cheque amount through a separate lawsuit.

5. Can I Get Bail In a Cheque Bounce Case?

Cheque bounce cases are typically bailable offenses. The drawer can apply for bail after arrest, depending on the severity and discretion of the court.

6. Can A Cheque Bounce Due To Drawer's Death?

The legal responsibility for a cheque bounce shifts to the deceased drawer’s estate if death occurs before the cheque is presented.

7. Can A Cheque Bounce Due To Incorrect Payee Name?

Yes, an incorrect payee name can be a reason for a cheque bounce if it doesn’t match the name on the account exactly.

I am a leading civil lawyer in India, dedicated to providing expert legal counsel and resolving disputes effectively. With a proven track record of success and a commitment to upholding justice, I strive to deliver the best possible outcomes for my clients. As the top lawyer at MandM Law Firm, I bring a wealth of knowledge and expertise across various practice areas, including civil litigation and corporate law. Join me as we explore the dynamic world of law, discovering the best topics, understanding market trends, and making informed decisions together.