If a cheque given to you by someone has bounced here are the precaution which you may take before dealing with the cheques or money transactions to avoid any fraud.

1. Name and complete address of the person who has given you the cheque- It is important if a third person is giving you a cheque, you must take a copy of his photo I.D which is a conclusive proof of his residence, because the person who you are dealing with will not be liable in case during that transaction the cheque is bounced.

2. Go for NEFT/RTGS/Demand Draft-This is more secure form of payment, Nowadays online transaction is both safe and secure way to transact.

3.If the cheque is a security-Remember if the cheque is given to you as a security then if that cheque is bounced, it may not constitute any offence under negotiable instruments,rather the remedy would lie under the Indian Penal code,under the offence of fraud and cheating. see here

4. However after all this your cheque has bounced the first thing you would be doing is to send a legal notice to the opposite party, do it even though the other party is assuring you to pay back,because it is a delaying tactic as cheque is valid for 3 months.

5. If your cheque book is lost-Immediately contact the bank to avoid misuse of your cheques.

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Nitish Banka

Nitish Banka is an advocate practicing in Supreme Court of India and can be reached at [email protected] or 9891549997