The offence of dishonour of cheques, for insufficiency, etc. of funds in the account of the drawer , is punishable with:

Option A: Imprisonment for a term which may extend to one year or with fine which may extend to the amount of the cheques or with both

Option B: Imprisonment for a term which may extend to two year or with fine which may extend to the amount of the cheques or with both

Option C: Imprisonment for a term which may extend to six months or with fine which may extend to five hundred rupees, or with both

Option D: Imprisonment for a term which may extend to five year or with fine which may extend to fivethousand rupees, or with both

Correct Answer

Option: b

Explanation

Dishonoring a cheque, according to Section 138 of the Act, is a criminal offence punishable by up to two years in prison, a monetary penalty, or both. If the payee chooses to proceed legally, the drawer should be offered the option of promptly returning the cheque amount.

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