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Section 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 CC No. 402-2021 HDFC LTD THROUGH AJU ASHOK Vs. MANISH DIMRI Page No.6 of 22 Harjot by Harjot Singh Singh 2023.07.14 17:57:35 +0530 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 be extended 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 on 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

(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, authorization, order or agreement, did not have reason to believe at the time of such instruction, authorization, 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 (26 of 1881) shall apply to the dishonour of electronic funds transfer to the extent the circumstances admit. Explanation. For the purpose of this section, debt or other liability means a legally enforceable debt or other liability, as the case may be.

13. Further, the term "electronic funds transfer" have been defined u/s 2(C) of Payment and Settlement System Act, 2007 which is reproduced as under:

S. 2 (c) : "electronic funds transfer" means any transfer of funds which is initiated by a person by way of instruction, authorization or order to a bank to CC No. 402-2021 HDFC LTD THROUGH AJU ASHOK Vs. MANISH DIMRI Page No.8 of 22 Harjot by Harjot Singh Singh 2023.07.14 17:57:45 +0530 debit or credit an account maintained with that bank through electronic means and includes point of sale transfers; automated teller machine transactions, direct deposits or withdrawal of funds, transfers initiated by telephone, internet and, card payment.