In Section 13 of the Negotiable Instruments Act of 1881, the phrase “Negotiable Instrument” is defined. The old French term “negociación,” which meaning interacting with people, trafficking, commerce, and business, is where the word “negotiable” originated. The word “instrument” comes from the old French word “instrumentum,” which denotes a piece of machinery or a tool. A legal document that may be freely negotiated is referred to as a “negotiable instrument,” such as a check or a bill of exchange. The Negotiable Instruments Act of 1881 has 142 sections and 17 chapters.
The Negotiable Instruments Act of 1881 contains Sections 138 through 142, which are primarily intended to encourage or emphasise the capacity of banking activities to deliver the desired impact under ideal testing conditions. Additionally, these parts seek to guarantee the legitimacy of transactions.
The Negotiable Instruments Act of 1881’s Section 138
A cheque bounce charges under Section 138 of the Negotiable Instruments Act of 1881 for a variety of reasons, including insufficient money, a stale or post-dated check, a modification, an unusual signature, a blocked account, a stop payment order, etc.
When an individual person draws a check on a specific bank account that is maintained by him with a banker to pay a specific amount of money to another person out of that bank account for the discharge of any amount of debt or any other liability, in whole or in part, and that check is returned by the bank unpaid either because the amount of money remaining in that bank account’s credit is insufficient
Provisions in Section 138:
The amount of money specified in the check is for fully or partially repaying the debt, and the accused must draw the check on a bank account that he maintains with a certain banker.
When a check is dishonoured, it is either returned unpaid because there are not enough money to cover it or it is returned because the amount it contains exceeds the agreement signed with the bank. When a check is returned to the holder or drawer of the check unpaid, that is when the offence is said to have been committed.
Nothing in this section will be applicable until- are the exceptions to this clause.
The check has been given to the appropriate bank within the time frame allowed by its validity or, if earlier, within six months of the day it was drawn from the bank.
By giving notice or requesting payment in writing from the person who drew the check, the payee (one who gets payment) demanded payment of the specified amount in accordance with the terms of the cheque. He must do so within fifteen days of receiving notification from the bank that the unpaid check will be returned.
If the drawer does not transfer the specified sum of money to the designated payee or recipient within fifteen days after receiving notification that the notice has been received.