Regarding Notice of dishonor under BP 22, which statement is correct?

Regarding Notice of dishonor under BP 22, which statement is correct?

• A. Both are correct
• B. Both are incorrect
• C. I is correct, II is incorrect
• D. I is incorrect, II is correct

Answer: (D)

The essential idea is how Notice of dishonor works under BP 22. When a check is presented and dishonored by the bank (usually for lack of funds), the holder must serve a written Notice of dishonor on the issuer. This written demand starts the clock: the issuer has five days from receipt of the notice to pay the amount due. If payment is made within those five days, no criminal liability under BP 22 attaches; if not, a criminal action may be filed. If a statement says that notice can be verbal or that the five-day period starts at some other moment, that is inaccurate. BP 22 requires a written notice and the countdown begins only from the recipient’s receipt of that notice. The other statement, reflecting the need for a written demand and the five-day period starting on receipt, is correct. So the correct choice is that the first statement is incorrect and the second statement is correct. For a practical example: a check bounces due to insufficient funds; the payee sends a written notice demanding payment within five days; if the issuer doesn’t pay in that window, BP 22 criminal liability can arise.

The essential idea is how Notice of dishonor works under BP 22. When a check is presented and dishonored by the bank (usually for lack of funds), the holder must serve a written Notice of dishonor on the issuer. This written demand starts the clock: the issuer has five days from receipt of the notice to pay the amount due. If payment is made within those five days, no criminal liability under BP 22 attaches; if not, a criminal action may be filed.

If a statement says that notice can be verbal or that the five-day period starts at some other moment, that is inaccurate. BP 22 requires a written notice and the countdown begins only from the recipient’s receipt of that notice. The other statement, reflecting the need for a written demand and the five-day period starting on receipt, is correct.

So the correct choice is that the first statement is incorrect and the second statement is correct. For a practical example: a check bounces due to insufficient funds; the payee sends a written notice demanding payment within five days; if the issuer doesn’t pay in that window, BP 22 criminal liability can arise.