If a cheque is issued as a loan guarantee or for security, it is still covered under the law. However, the cheque should not be presented for payment unless the loan is due. If presented before that, it may not be considered a valid case of cheque bounce.

Yes, if you gave a blank cheque and it was later filled and dishonoured, you can still be held liable under the Negotiable Instruments Act, provided the cheque was issued with your consent.

No, a bill of exchange cannot be conditional. It must be an unconditional order to pay a certain amount of money. If it has any condition attached, it is not a valid bill of exchange under the law.

When someone does an endorsement, they are guaranteeing that the instrument is genuine and that they have received it legally. They also promise that if the instrument is dishonoured, they will pay the amount to any later holder who presents it properly.

An instrument matures on the date it becomes payable. If it's payable on demand, it matures immediately. If it's payable after a certain time, it matures after that period plus three days of grace. For example, a bill payable 30 days after sight and accepted on June 1 will mature on July 4.

The Negotiable Instruments Act, 1881 is a law that deals with promissory notes, bills of exchange, and cheques. It is mainly used in cases where a cheque is dishonoured due to insufficient funds.

To use it legally, the payee must send a notice within 30 days of the cheque bouncing. If the drawer doesn’t pay within 15 days of receiving the notice, the payee can file a complaint in a magistrate’s court. The case can also be settled between the parties.

Yes, the offence under Section 138 of the Negotiable Instruments Act is a compoundable offence
This means the complainant (payee) and the accused (drawer) can settle the matter out of court, and the case can be withdrawn with court permission.
Supported by Section 147 of the NI Act (as amended), which makes offences under the Act compoundable.

The cause of action in a cheque bounce case arises after 15 days from the date the drawer receives the legal notice and fails to pay the cheque amount.

Types of Endorsement:
1. Blank Endorsement: Only the signature of the endorser. Makes the instrument payable to bearer.
2. Full Endorsement: Includes the endorser's signature and the name of the endorsee. Payable only to that person.
3. Restrictive Endorsement: Limits further negotiation (e.g., "Pay to Ravi only").
4.Conditional Endorsement: Payment depends on a condition (e.g., "Pay if goods are delivered").
5. Sans Recourse Endorsement: Endorser denies liability in case of non-payment (e.g., "Without recourse").

If the accused in a cheque bounce case is deceased, the case under Section 138 of the NI Act becomes abated (closed), as it is a criminal proceeding and cannot continue against a dead person. Legal heirs are not liable for the criminal offence, though the complainant may file a civil suit to recover the amount from the deceased’s estate, if applicable.