Businesses continue to value cheques as the most convenient non
cash payment instrument and an easily reconciled payment method for
commercial transactions. However, dishonoured cheques are one of
the biggest concerns which affect smooth business operations. Many
business entities in Sri Lanka are currently trying to understand
how to take effective legal action against dishonoured cheques.
Unfortunately most of them are not aware as to the correct
procedure to follow in the event they receive a cheque which is
dishonoured.
Under Sri Lankan Law if a cheque is returned due to a fault of
the Drawer it is criminally punishable under the Debt Recovery Act
of 1990 of Sri Lanka and section 398 of the Penal Code of Sri
Lanka. Most parties presser to take criminal action and create a
deterrence against the fraudster.
