consequences of wrongful dishonour of cheques
Answers
Answer:
The offence may be inquired into or tried by a court within those legal jurisdiction such thing has been done or such consequence has ensued. Payment of cheque against an account having sufficient funds to meet the liability under the cheque is one act while dishonor of the cheque is a consequence of such an act.
Answer:
A payor bank is liable to its customer for damages caused by wrongful dishonor of an instrument, limited to actual damages proved, including potential consequential damages.
Explanation:
According to Section 138 of the Act, the dishonour of cheque is a criminal offence and is punishable by imprisonment up to two years or with monetary penalty or with both. If payee decides to proceed legally, then the drawer should be given a chance of repaying the cheque amount immediately.
Wrongful dishonor refers to a bank's failure to honor a valid negotiable instrument, such as a check or draft that has been presented to it for payment. If the check is valid and there are sufficient funds in the account to cover it, a bank's failure to honor it within the time period stipulated by the Uniform Commercial Code (UCC) would constitute wrongful dishonor.