Cheque Bounce Law in Nepal – Easy guide to get the remedies in Cheque Bounce 2080

This article will help you to know all about cheque bounce law in Nepal.

Cheque bounce is a condition in which a bank refuses to exchange the issued cheque to the receiver due to reasons such as:

1. Insufficient fund or
2. Overwriting on the cheque or
3. Mismatch of signature or
4. The signature is absent or
5. Problem with the cheque’s date or
6. Account differences in numbers and words

Cheque bounce is regarded as one of the types of dishonor of a cheque.

In Nepal, the following two Acts regulate the cheque bounce law in Nepal:

1. Negotiable Instruments Act, 2034 (1977) (First amended in 2039)
2. Banking Offence and Punishment Act, 2064 (2008) (no amendments till now)

1. Negotiable Instruments Act, 2034

Section 53(10) of this Act states if a cheque is not drawn for payment within six months, the bank is not bound to give payment for the same.

The complaint has to be filed within 5 years from the date of cause of action(2) and has to be filed in district court. The cheque must be bounced three times and the bounce letter must be attached to the FIR application.

Cheque Bounce Law in Nepal – All the Process of Cheque Bounce Remedies

As per the Negotiable Instruments Act, 2034

Step 1: Filing of FIR
Step 2: Counterclaim
Step 3: Collection of evidence
Step 4: Hearing and final decision
Step 5: Appeal at High Court

Remedies available under the Act:
If a cheque is bounced, the amount mentioned in the cheque, as well as interest, shall be recovered and the holder shall be punished with imprisonment up to 3 months or a fine up to Rs.3,000 or both.

2. Banking Offence and Punishment Act, 2064

This Act defines cheque bounce as where the holder already has knowledge that the account does not have sufficient balance.

The Act mentions FIR must be lodged within 1 year from the date the offense occurs. This Act identifies cheque bounce as a state-party offense.

Also Read: Business Visa in Nepal Procedure

Process of Cheque Bounce Remedies and Procedures in Nepal as Per Banking Offence and Punishment Act, 2064

Step 1: Filing of FIR
Step 2: Police investigation
Step 3: File of charge sheet(the charge sheet is filed by the public prosecutor in the concerned High Court).
Step 4: Hearing for bail
Step 5: Witness examination
Step 6: Appeal at High Court

Depending on the basis of the claimed amount, the following is the provision:

Suit Amount	Imprisonment
Up to 10 lakh	Up to 1 yr
Above 10-50 lakh	1-2 yrs
Above 50 lakh-1 crore	2-3 yrs
Above 1 crore or above	3-5 yrs

There are other situations as well offering own imprisonment and fine(2). In sum, we can see fine ranges minimum of Rs. 10,000 and a maximum of Rs. 10,00,000, and imprisonment minimum of 1 year and a maximum of 5 years.

For Answers and Questions

Conclusion

Negotiable Instruments Act, 2034 provides for recovery of interest on the claimed amount, while Banking Offence and Punishment Act, 2064 does not provide for the same.