📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    Under Section 138 of the Negotiable Instruments Act,

    1881, what is the maximum punishment for dishonoring a cheque due to insufficient funds?
    A Imprisonment up to 1 year or fine up to cheque amount Correct Answer Incorrect Answer
    B Imprisonment up to 2 years or fine up to twice the cheque amount, or both Correct Answer Incorrect Answer
    C Imprisonment up to 6 months or fine up to cheque amount Correct Answer Incorrect Answer
    D Fine only, not exceeding cheque amount Correct Answer Incorrect Answer
    E Imprisonment up to 3 years or fine up to three times cheque amount Correct Answer Incorrect Answer

    Solution

    Section 138 of the Negotiable Instruments Act, 1881, prescribes that a drawer whose cheque is dishonored due to insufficient funds may be punished with imprisonment for a term extending up to 2 years, a fine extending up to twice the cheque amount, or both. Additionally, the payee must present the cheque within 3 months, give 30-day written notice post-dishonor, and the offence is complete if the drawer fails to pay within 15 days of receiving notice.

    Practice Next
    More Other Laws and Acts Questions
    ask-question