The bouncing of cheques, also known as dishonored cheques, is a prevalent issue in various jurisdictions. Traditionally, many countries have treated this offense as a criminal act, imposing severe penalties including imprisonment. However, with the advent of cashless transactions, promoted by none other than PM Narendra Modi himself, there is a growing chorus to convert bouncing of cheques into a civil offense. This article aims to justify why making the bouncing of cheques a criminal offense should be removed and instead be treated as a civil offense.

Principle of Proportionality

One of the primary reasons for advocating the removal of criminalizing the bouncing of cheques is the principle of proportionality. The act of issuing a bounced cheque is often unintentional, arising from circumstances such as insufficient funds or a mismatch of signatures. Criminalizing it can result in disproportionate punishments, such as imprisonment, which do not align with the nature of the offense and can have severe consequences on individuals’ lives.

Encouraging Economic Activity

Treating the bouncing of cheques as a civil offense would create an environment that fosters economic activity. Imposing criminal sanctions on individuals who inadvertently issue a bounced cheque can discourage entrepreneurial initiatives and economic participation. Colossal waste of time, money and effort happens when all Directors on the board of a Company are made to plead like petty criminals, seeking bail or exemptions, at the mercy of the judiciary. By making the offense civil, it allows for a flexible approach in addressing such incidents, focusing on restitution and promoting business growth.

Alternative Dispute Resolution

Civil proceedings provide the opportunity for alternative dispute resolution mechanisms, such as negotiation, mediation, or arbitration. These methods allow parties to resolve issues more efficiently, amicably, and without overwhelming the criminal justice system. Emphasizing civil liability encourages parties to engage in mutually beneficial negotiations and reach settlements, potentially avoiding long-drawn-out legal battles.

Rehabilitation instead of Punishment

Treating the bouncing of cheques as a civil offense emphasizes rehabilitation and corrective measures instead of punishment. Criminalizing offenders may label them as criminals and hinder their ability to reintegrate into society. In contrast, civil penalties, such as fines or restitution, provide an opportunity for individuals to rectify their actions, learn from their mistakes, and contribute positively to the economy.

Reducing Burden On Companies

The NI Act ties down entire lot of company directors as accused and leaves them at the mercy of the Judiciary. The Me Lords are more than happy to flex their muscles and power and through arbitrary and coercive Orders leave these directors or owners at the mercy of the Police. After claiming it’s own share of pie, the system then ensures that these Directors or Heads of Organizations are produced, some forcibly in handcuffs, before the Judges as petty criminals. Many a times these individuals may not even be directly related to a dishonored cheque. As the proceedings demand, and those who are lucky not to land behind bars, these business heads and Entrepreneurs are often seen waiting entire day at the Courts for their turns. The business loss and wasted time having literally NO MEANING for the Lordships or the government.

Reducing Burden on Criminal Justice System

Introducing criminal charges for bounced cheques places an additional burden on an already congested criminal justice system. Courts are inundated with cases, and utilizing their limited resources to prosecute individuals for non-violent economic offenses can hinder the timely resolution of more serious criminal matters. Shifting these cases to the civil courts streamlines the legal process and allows for prioritization of more critical criminal cases.

International Trends

Several countries around the world have already moved towards treating bounced cheques as a civil offense. For instance, in the United Kingdom, Canada, and many European Union countries, the focus is on civil remedies, with penalties enforced through civil courts or mechanisms specific to banking and financial regulations. This shift aligns with the trend of modernizing legal systems to promote efficiency and fairness.


Given the principle of proportionality, the benefits of encouraging economic activity, the opportunities for alternative dispute resolution, the focus on rehabilitation, the reduction in burdens on the criminal justice system, on the companies and their board of directors and the alignment with international trends, it is justifiable to remove the criminal aspect of the bouncing of cheques and instead treat it as a civil offense. This approach would strike a fair balance between addressing the harm caused and allowing individuals to rectify their actions while promoting economic growth and efficiency.

Also Read:

~ News4masses is now also on Google news
~ If you want to contribute an article / story, please get in touch at: news4masses[at]gmail[dot]com


  1. There is a Proposal to curb banks and mischievous elements from dragging a person or entire lot of Directors of a company to court in case the cheque bounces:

    Amendment to NI Act:
    Notably, the Negotiable Instruments Act was amended a few years back and new clauses were introduced which allows the payment of interim compensation to the aggrieved party as an immediate relief when the case reaches the court.

    New Section 143A was introduced which provides for the court trying a cheque dishonour case under Section 138 may order the drawer of the cheque to pay interim compensation to the complainant at the time of framing of charges. The interim compensation shall not exceed 20% of the cheque amount.

    Now an important amendment in the Negotiable Instruments (NI) Act is on cards that will restrict banks from dragging a person to court for an offence like cheque bounce. At present, bouncing cheques is a criminal offence under Section 138 of Negotiable Instrument Act, 1881. And the consequence could be two years as well as twice the amount of the cheque.

    An inter-ministerial group (IMG), which was set up last year to make suggestions for necessary policy and legislative changes to deal with a large number of cases pending in various courts is said to have suggested an amendment to the Act.

    By virtue of the amendment in the NI Act, “the use of alternative dispute resolution mechanism on the lines of Section 89 of the Code of Civil Procedure, through arbitration; conciliation; judicial settlement including settlement through Lok Adalat of mediation may be made compulsory in cheque bounce cases.”

    Also, it is learnt that the IMG report reveals that “the court fees involved in the cheque bounce cases may be made Ad-valorem to act as a deterrent for indiscreet and vexatious complaints. Provision may also be made for defaulting party to bear the cost of litigation in such cases.”


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.