IN SIMPLE WORDS WE CAN UNDERSTAND THE WORD EFFECTS NOT CLEARED; PRESENT AGAIN MEANS CHEQUES IN BANK ACCOUNTS ARE IN THE CLEARING CYCLE BUT FATE IS STILL UNKNOWN. ALSO, LESS OR NO FUNDS IN THE CHEQUE DRAWER’S BANK ACCOUNT TO GET CLEARING OF CHEQUE. THAT’S WHY THE CHEQUE IS DISHONOUR WITH A REASON EFFECTS NOT CLEARED; PRESENT AGAIN
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WHY CHEQUE GET BOUNCED CAUSE OF EFFECTS NOT CLEARED; PRESENT AGAIN?
THIS IS A REASON FOR CHEQUE RETURN WHICH MEANS A CHEQUE HAS BEEN DEPOSITED TO THE BANK FOR CLEARING BUT THE CHEQUE HAS NOT YET GONE THROUGH THE BANK SYSTEM AND THE AMOUNT PAID IN THE ACCOUNT.
EXACTLY, CHEQUE EFFECTS OF DRAWERS ARE NOT CLEAR TO GET CLEARING OF CHEQUE. AND FURTHER OVERDRAWING ON THE ACCOUNT WOULD NOT BE ALLOWED. AND IT IS POSSIBLE FOR THE CHEQUE TO PRESENT AGAIN TO THE BANK FOR CLEARING MAY BE CLEAR.
EFFECTS NOT CLEARED; PRESENT AGAIN IS RELATED TO FUND SO FUND IS NOT SUFFICIENT IN DRAWERS BANK ACCOUNT ALSO A REASON OF DISHONOUR OF CHEQUE.
WHAT IS THE MEANING OF EFFECTS NOT CLEARED; PRESENT AGAIN?
EFFECTS NOT CLEARED; PRESENT AGAIN IS A CHEQUE BOUNCE REASON WHICH IS SHOWN BY BANKS TO THE DRAWEE AT THE TIME OF THE CHEQUE CLEARANCE PROCESS.
FOR EXAMPLE
RAM (DRAWER) ISSUED A CHEQUE OF 20000 RS IN FAVOUR OF BABLU (DRAWEE) WITH A DATE OF 31.03.2023. A PRESENTS THAT CHEQUE IN THE BANK TO GET CLEARANCE BUT AFTER PRESENTING THAT CHEQUE HE GETS THAT CHEQUE CLEAR IN THE BANK STATEMENT IN THE MORNING AND IN THE EVENING CHEQUE BOUNCES WITH A REASON (EFFECTS NOT CLEARED; PRESENT AGAIN). IN THIS CASE, BABLU WILL SEE TWO ENTRIES OF CREDIT AND DEBIT OF 20000 RS IN HIS BANK ACCOUNT STATEMENT.
WHAT SHOULD WE DO IN CASE A CHEQUE IS BOUNCED FOR A REASON (EFFECTS NOT CLEARED; PRESENT AGAIN)?
IN THIS CASE, WE SHOULD THINK THAT WE WANT TO RECEIVE OUR MONEY FROM THE DEBTOR (DRAWER) BUT NOT POSSIBLE CAUSE OF A SPECIFIED REASON (EFFECTS NOT CLEARED; PRESENT AGAIN)
SO WE NEED TO DO THIS BEFORE PRESENTING THAT CHEQUE TO THE BANK:
- TAKE A PENALTY FROM THE DRAWER MINIMUM OF 500 RS. PER CHEQUE BECAUSE YOUR GOODWILL WILL BE HARMED BY THIS AND THE BANK WILL ALSO CHARGE YOU.
- TELL TO DRAWER TO DEPOSIT SUFFICIENT FUNDS IN HIS BANK ACCOUNT OR COVER THE BANK OVERDRAFT OR CASH CREDIT LIMIT THAT IS EXCEEDING.
- YOU CAN PRESENT THAT CHEQUE IN THE BANK UP TO 3 TIMES SO MAKE SURE SHOULD HAVE FUNDS.
- IF 3 TIMES YOU GET A CHEQUE BOUNCED WITH A REASON ( FUND INSUFFICIENT) THEN YOU SHOULD NOT TRY TO DEAL AGAIN WITH THAT CUSTOMER CAUSE HE IS HARMFUL TO YOUR GOODWILL.
- YOU SHOULD NOT TRY TO DEAL AGAIN WITH THAT CUSTOMER CAUSE HE IS HARMFUL TO YOUR GOODWILL.
- PRESENT THE CHEQUE IN THE BANK AGAIN AFTER CONFIRMATION FROM THE CUSTOMER ABOUT FUND.
- PRESENT CHEQUE WITHIN THE VALIDITY PERIOD OF THAT CHEQUE. BECAUSE THE CHEQUE IS VALID UP TO 3 MONTHS FROM THE DATE OF MAKING THE INSTRUMENT.
OFFENCE OF CHEQUE BOUNCING – ESSENTIAL POINTS
BOUNCING A CHEQUE INVITES CRIMINAL PROSECUTION UNDER SECTION 138 OF THE NI ACT. PUNISHMENT FOR THE OFFENCE UNDER SECTION 138 OF THE NI ACT IS IMPRISONMENT UP TO TWO YEARS OR A FINE WHICH MAY EXTEND TO TWICE THE CHEQUE AMOUNT OR BOTH.
THE OFFENCE IS BAILABLE, COMPOUNDABLE AND NON-COGNIZABLE. ESSENTIAL INGREDIENTS OF AN OFFENCE UNDER THE SECTION CAN BE SUMMED UP AS FOLLOWS:
1. A PERSON MUST HAVE DRAWN A CHEQUE ON A BANK ACCOUNT MAINTAINED BY HIM.
2. THE CHEQUE SHOULD HAVE BEEN ISSUED IN DISCHARGE, IN WHOLE OR IN PART, OF ANY DEBT OR OTHER LIABILITY.
3. THE CHEQUE HAS BEEN PRESENTED TO THE BANK WITHIN THE PERIOD OF ITS VALIDITY (3 MONTHS FROM THE DATE OF THE CHEQUE).
4. THE CHEQUE IS RETURNED BY THE BANK UNPAID, EITHER BECAUSE FUNDS ARE INSUFFICIENT OR IT EXCEEDS THE AMOUNT ARRANGED TO BE PAID.
5. THE PAYEE MAKES A DEMAND FOR THE PAYMENT BY GIVING A NOTICE IN WRITING, WITHIN 30 DAYS OF THE RECEIPT OF INFORMATION BY HIM FROM THE BANK.
6. THE DRAWER FAILS TO MAKE PAYMENT OF THE SAID AMOUNT OF MONEY WITHIN 15 DAYS OF THE RECEIPT OF THE SAID NOTICE.
7. COMPLAINT IS MADE WITHIN ONE MONTH OF THE DATE ON WHICH THE CAUSE OF ACTION ARISES.
AN OFFENCE IN TERMS OF SECTION 138 IS COMMITTED EVEN IF THE CHEQUE IS RETURNED ON THE GROUND OF “CLOSURE OF THE ACCOUNT”.
FAQS ON EFFECTS NOT CLEAR
Effects not cleared means the bank bounced the cheque because it is not able to clear a cheque due to funds insufficient or exceeds arrangements and to protect the reputation of cheque drawers.
Present again means you are informed to send a cheque again to the bank to get clearance.
Yes, a bounced cheque can be presented again and again to the bank until the clearing but within the validity of that cheque.
- Exceeds arrangement meaning for cheque bounce
- EXCEEDS ARRANGEMENT (2)- REASON OF CHEQUE RETURN
- EFFECTS NOT CLEARED; PRESENT AGAIN (3)- REASON OF CHEQUE RETURN
- CHEQUE RETURN REASONS LIST IN BANKING
- Refer to Drawer (04-09) cheque return reasons
- Bankers cheque-One thing you should know
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