1. Who convicts the cheque issuer
The criminal court and civil court function separately. When the receiver of a cheque (which bounced) files the initial complaint in the police station against the issuer, the case is forwarded to the public prosecution and then to the criminal court. The criminal court may convict the issuer (based on evidence provided by the complainant) and give him two options - pay the money or go to jail.
However, in case of failure to get cheque amount despite imprisonment, the complainant should present his or her case to the civil court next, to claim the money, along with documents and evidence to prove it. The civil court could then either demand the issuer to pay or face jail term.
2.Unable to pay after jail term
If a certain person was convicted for a bounced cheque case and has served jail term, he or she stands released after the period. However, if the original complainant files the case again in the civil court for the second time, he or she will have to pay the unpaid amount then or go back to jail on conviction from said civil court. In case there is no pending or second case once the jail term is completed, the person is free to leave the country after collecting his impounded passport.
3. Who is liable for a corporate cheque
In companies or partnership firms, not all partners or stakeholders can be held liable in the event of a cheque being issued without sufficient funds to pay it off.
The criminal liability shall be borne by the individual who signed the cheque - whether it be a manager or a partner/co-owner. Other people's private funds have no bearing on the value of the cheque. Its value shall be realised only through the assets of the company.
However, if the losses or lack of funds which resulted in the company-issued cheque bouncing, are proven to be a result of any kind of fraud by the owners or partners, the case may take a different direction.
4. What if owners or managers abscond
If it is proved that the company, which the complainant has dealt with, does not have enough funds to settle the cheque’s value, he or she can file a criminal case against the manager who signed the cheque, even if he or she has left the country. After a judgement is issued, the questioner may request the concerned authority to include the manager’s name in Interpol’s wanted list.
- Always keep a copy of all the personal cheques you sign for banking, renting or any other purposes. A photo is more than enough to ensure that when the obligation is done, you can keep track of due cheques and cancelled ones (like security cheques given to banks for personal loans).
- If you're a manager or accountant authorised to sign cheques, have email trails for every cheque signed no matter the amount. Even if your boss asks you to sign a cheque, ultimately the person who signed is liable to a major extent. Again, keep copies of the cheque and correspondence.