Cheque Bounce and Its Legality in Nepal / चेक बाउन्स केस / Ganesh Neupane/ Nepal Eduverse/ Episode 2

Link to Nirmala Sodari vs Government of Nepal: https://supremecourt.gov.np/cp/assets...

In the context of Nepal, remedies against cheque bounces have been addressed through two distinct laws i.e.

a) Negotiable Instrument Act, 2034 (1977)
b) Banking Offence and Punishment Act, 2064 B.S. ( 2008)

1. Negotiable Instruments Act, 2034 :

According to the Act, a cheque bounce is when a person deliberately transfers a cheque by drawing it to some who does not bear a deposit in the bank or bears an insufficient deposit. Following the commission of such act, the amount mentioned in the cheque, as well as interest on it, shall be recovered from the drawer to the holder and he/she shall be punished with imprisonment of up to three months or a fine of up to three thousand rupees or both. This Act identifies cheque bounce as an individual party offense wherein the aggrieved must file a complaint in the concerned District Court within five years from the date of cause of action to file such complaint.
Process and remedies of Cheque dishonoring:
Section 108 of the Negotiable Instrument Act, 1977, mentions that a complaint shall be filed within five years from the date of the cause of action to file such a complaint. The process for filing the case at the concerned district court is listed below:
Step 1: Filing of a statement of claim (phiradpatra) by the party
Step 2: Reply by another party on the statement of claim, which is regarded as pratyuttarpatra.
Step 3: Collection of evidence and examination of witnesses
Step 4: Hearing and final decision by the district court
Step 5: Filing an appeal at a high court, if any of the parties is not satisfied with the decision rendered by the district court.
Remedies of Cheque Dishonor according to Negotiable Instrument Act 1977:
Section 107 (A) of the Negotiable Instrument Act, 1977, provides the following remedy to the affected party.
a) Recovery of the amount mentioned in the Cheque with interest
b) Imprisonment not exceeding three months or fine up to Rs. 3000 or both

2. Banking Offence and Punishment Act, 2064 B.S.
The Act prohibits anyone from drawing a cheque to knowingly make payment from an account where he/she has apparent knowledge that the account does not have sufficient balance to cover the amount of the cheque drawn. If a person commits such an offense, he/she shall be liable to pay the principal amount along with a fine depending on the amount of transaction involved and imprisonment of up to 3 months. The Act mentions FIR must be lodged within 1 year from the date the offense occurs. This Act identifies cheque bounce as a state party offense.
Procedure to file a case :
Section 17(1) of the Banking Offence and Punishment Act, 2064, mentions a complaint shall be filed within one year from the date of cause of action to file such a complaint. The process for filing the case in the concerned high court is listed below:
Step 1: Submission of the first information report (FIR) at the concerned police station
Step 2: Police will carry out an investigation, which they will submit to a government attorney.
Step 3: Filing of a charge sheet at the high court by the government attorney
Step 4: Hearing for bail at the high court: It is the first hearing in that particular case
Step 5: Examination of witnesses
Step 6: Hearing when the high court will render its decision
Step 7: Filing an appeal at the Supreme Court, if any of the parties is not satisfied with the decision rendered by the high court
Remedies :
The Banking Offence and Punishment Act, 2008, provides the following remedy to the affected party:
a) Recovery of the amount mentioned in the cheque with interest
b) Imprisonment not exceeding three months
c) Fine of the amount mentioned in the cheque


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