Delhi High Court: Go To Mediation For Cheque Bouncing

In today's world, numerous commercial transactions take place in a routine fashion. With the passage of time we have evolved from barter system in the ancient age to a uniform mode of currency. As the technology has advanced, cash transaction have been replaced by Real Time Gross Settlement (RTGS). Even in the resent scenario, cheques remain an important mode of business intercourse.

A cheque is an acknowledged bill of exchange that is readily accepted in lieu of payment of money and it is negotiable. However, with the fall in moral standards, even these negotiable instruments are losing their creditability by not being honoured on presentment. Considering the very nature of the cheque being a negotiable instrument as a speedy vehicle of commerce, an action under the regime of civil legislation remained insufficient and hence the bouncing of cheques was recognized to be an offence liable for penalty.