Page 164 - DCOM208_BANKING_THEORY_AND_PRACTICE

Unit 10: Negotiable Instruments

When there is attention: If anything is cancelled on a cheque, the bank will dishonour such Notes
a check, except the drawer signs his signature above or under the altered word.

A post-dated check: If this is presented for payment, the bank will dishonour such a
cheque.
A stale cheque: A cheque presented for repayment after 6 months of the date written on it,
such a kind of cheque must be dishonoured by the bank.
If there is a difference between the amount written in words and that in figures: If for
instance, the drawer writes thirty dollars only in words and $20 in figure.

When payment is stopped: If the drawer asks a bank not to pay a cheque already issued.
The proceedings of a cheque bounce case generally take an average of 1 year before the trial
court. The important stages in a cheque bounce case are:

1. Filing of complaint: The complaint needs to be registered before the magistrate within 30
days from the accrual of claim and the complainant should be present at the time of filing
of complaint. The original documents are presented to the magistrate. If prima-facie a case
is made out, the magistrate posts the matter for sworn statement.
2. Sworn Statement: A sworn statement is also known as “affidavit”. At this stage, the
complainant needs to enter the witness box and give further details pertaining to the case.
If the magistrate is satisfied that there is some meaning in the case of the complainant,
then he will issue a summon to the accused.
3. Appearance of Accused: The accused needs to appear in the court on receiving the summons.
In case of non-appearance, the court issues an arrest warrant against him. After appearance,
the accused is supposed to take a bail from the court with or without securities. If the
accused is unable to furnish a security then he can deposit a cash security. This cash
security is refundable to the accused after the closing of the case.
4. Recording of Plea: In the next stage, the court asks the accused as to whether he has
committed the offence or not. If the accused admits the guilt, the court immediately gives
him punishment. If he pleads innocence, the court posts the matter for proof.

5. Evidence: The complainant furnishes his evidence, generally by way of affidavit; this is
known as examination-in-chief. He needs to produce all documents in support of his case
like bounced cheque, dishonour memo, copy of notice etc. Later, complainant is cross
examined by the accused. If there are other witnesses in support of the complainant, then
their evidence is also recorded.
6. Statement of the Accused: After the complainant side evidence is over, the court puts some
questions to the accused regarding his guilt. An accused needs to give his version to the
same.
7. Defense Evidence: After the accused statement the court gives an opportunity to the accused
to leave his evidence. The accused can also produce documents as well as witnesses in
support of his case. Accused and his witnesses are cross examined by the complainant.
After this, the case is posted for arguments.
8. Arguments: Both the complainant and the accused will submit their arguments before the
court. They can also submit judgments of high courts and Supreme Court in support of
their case. Normally a written argument containing a gist of the oral argument is also
presented to the court.

9. Judgement: After the arguments, case is posted for judgement. If the court finds that the
accused has committed offence, he is punished with fine or imprisonment. If he is innocent,

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