Penalties in Case of Dishonour of Cheques for Insufficiency of Funds in the Account
Sections 138 to 148 of the Negotiable Instruments Act deal with the dishonour of cheques and the compensation that would be awarded to the payee. The researcher is interested in researching the penalties in case of dishonour of cheques for insufficiency of funds in the account. Negotiable instruments have been used since the evolution of the transfer of money. When cheques were issued as negotiable instruments, they would sometimes bounce due to insufficiency of funds. To make the drawer liable for bouncing of cheques and to ensure they pay adequate compensation, Sections 138 to 148 of the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 were inserted. The researcher seeks to enlighten the significance of these sections by elaborating them with case laws and amendments briefly.
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