Question

In case a cheque is dishonored than a drawer is liable to a punishment of ________.

• A. 2 years imprisonment
• B. the case is decided as per court
• C. fine which may exceed to twice the amount of the cheque
• D. Both A and C

Answer 1

The correct option is D Both A and C

Part XVII of the Negotiable instruments Act, 1881 prescribes for the penalties for dishonor of the cheque. As per section 138 of the act, where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned

by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both