law: Payment and Settlement Systems Act, 2007
  25. Dishonour of
  
  electronic funds transfer for insufficiency, etc., of funds in the account. -
  1.  
  
    Where
  
  an electronic funds transfer initiated by a person from an account maintained
  
  by him cannot be executed on the ground that the amount of money standing to
  
  the credit of that account is insufficient to honour the transfer instruction
  
  or that it exceeds the amount arranged to be paid from that account by an
  
  agreement made with a bank, such person shall be deemed to have committed an
  
  offence and shall, without prejudice to any other provisions of this Act, be
  
  punished with imprisonment for a term which may extend to two years, or with
  
  fine which may extend to twice the amount of the electronic funds transfer, or
  
  with both: Provided that nothing contained in this section shall apply unless-
  a.   the electronic funds
  
  transfer was initiated for payment of any amount of money to another person for
  
  the discharge, in whole or in part, of any debt or other liability;
  b.   the electronic funds
  
  transfer was initiated in accordance with the relevant procedural guidelines
  
  issued by the system provider;
  c.   the beneficiary makes
  
  a demand for the payment of the said amount of money by giving a notice in
  
  writing to the person initiating the electronic funds transfer within thirty
  
  days of the receipt of information by him from the bank concerned regarding the
  
  dishonour of the electronic funds transfer; and
  d.   the person initiating
  
  the electronic funds transfer fails to make the payment of the said money to
  
  the beneficiary within fifteen days of the receipt of the said notice.
  1.  
  
  
  2.  
  
    It
  
  shall be presumed, unless the contrary is proved, that the electronic funds
  
  transfer was initiated for the discharge, in whole or in part, of any debt or
  
  other liability.
  3.  
  
    It
  
  shall not be a defence in a prosecution for an offence under sub-section (1)
  
  that the person, who initiated the electronic funds transfer through an
  
  instruction, authorisation, order or agreement, did not have reason to believe
  
  at the time of such instruction, authorisation, order or agreement that the
  
  credit of his account is insufficient to effect the electronic funds transfer.
  4.  
  
    The
  
  Court shall, in respect of every proceeding under this section, on production
  
  of a communication from the bank denoting the dishonour of electronic funds
  
  transfer, presume the fact of dishonour of such electronic funds transfer,
  
  unless and until such fact is disproved.
  5.  
  
    The
  
  provisions of Chapter XVII of the Negotiable Instruments Act, 1881 shall apply
  
  to the dishonour of electronic funds transfer to the extent the circumstances
  
  admit.
  Explanation.- For the
  
  purposes of this section, "debt or other liability" means a legally
  
  enforceable debt or other liability, as the case may be.