What is the rate of interest that can be claimed by the complainant in case of dishonour of cheque?

Q. I filed a cheque dishonour case against a person. Is it possible for me to claim from the accused in that case, the cheque amount along with interest?

The main object of the Negotiable Instruments Act was to prevent dishonesty on part of the drawer of negotiable instrument to draw a cheque without proper funds in his account. Court can punish the offender under criminal law and may put fine which can be the double the amount of dishonoured cheque. Dishonour of cheque in a simple definition means the cheque that the bank does not pay as there is not enough funds in the account to pay the amount.  Section 138 of The Negotiable Instruments Act states that when a cheque is dishonoured, the person who had drawn the cheque is said to have committed the offence which is a bailable offence under this section and can be punished for a period of 2 years or fine or both. There are many reasons why cheques are dishonoured, like if date is not written, or advance date is mentioned in the cheque, name of the payee is wrong, amount given in it is not correct, if cheque is overwritten, if cheque is not in proper condition, if bank balance is not there etc.

Court usually grants interest upon the cheque amount when appealed in the petition. In M/S. Nirmal Lotteries vs Dda & Another on (24 August, 2009) it was held by the Delhi High Court that the defendant is liable to reimburse the plaintiff the original cheque amount along with interest too. Court granted the interest to be paid at 18% as per the contract, from the date of encashment of bank guarantee till date of realisation. In another case J. Veeraraghavan v. Lalith Kumar (19 October 1994) court held that “Dishonour of cheque for insufficiency etc. of funds in accounts” addition of word “etc.” will not be considered as an accident. Chapter 6 of The Negotiable Instruments Act, 1881 states about the interest payment. Under Section 79 and 80 of the Act, if rate is specified then that will be considered from the date of the instrument till realisation of amount and if interest rate is not specified then it will calculated at 18% per annum from date of it to be paid to the party till realisation of the amount.

by Sushma Javare.