Legal Question in Banking Law in India

Re: Personal loan EMI cheque bounce

any kind of cheque bounce case attracts criminal procedure

and the punishment is max two years and/or fine double of the cheque amount.

generally banks dont file civil case but civil case may also be filed

Re: Personal loan EMI cheque bounce

punishment for two years imprisonment provided u/s138 N.I.Act.Both civil and criminal proceeding/case can be filed.

Re: Personal loan EMI cheque bounce

It is possible for the lender whom we presume is a Bank to prosecute under Sec.138 of the Negotiable Instruments Act the drawer whose cheque bounced for want of funds. The punishment in such a case can be imprisonment upto two years or fine for twice the amount of the cheque bounced. Though it is open to the payee of the cheque to go in for civil suit simultaneously, he will first try this criminal prosecution, and only if the amount is not recovered he will go in for a civil suit. Alternatively, as per the loan documentation, the entire loan outstanding can be demanded in default of payment of even one instalment and in such a case it is open to him to file a civil suit for the recovery of the entire amount instead of waiting for presenting subsequent cheques.

Re: Personal loan EMI cheque bounce

Proceedings may be civil and/or criminal being the choice of the holder of the cheque. If criminal, the sentence cud be two yrs or double the amount. In civil it could be with interest.