You screwed yourself by giving them the cheques. Otherwise they could not take a penny from you. :annoyed:
On which date your trade got executed and what date you write on your check(same day or next day)?
Anyway, here are few pieces of information that will be very precious for you:
1. In recent few years, there have been some rulings from senior courts (HC/SC) in NIA (Negotiable Instruments Act), that deal with Cheque Bounce Case.
For a "valid" cheque bounce case under NIA, a person must "owe" money.
If you give Kotak a cheque to transfer money to your trading account, and it bounces, you cannot be prosecuted for cheque bounce case.
Similary post dated and blank cheques taken by private banks as collateral for loan are not convered under NIA (the person taking the loan had not received the loan when he gave them the cheque, so technically he did not owe them the money when he gave the cheques and hence NIA is not applicable here).
However, there is one small catch in your case. Your trades got executed and then you gave them the cheque. So, after trade execution, you owe them the money. And therefore NIA case might stand against you.
Hat's off to Kotak guys, they are briliant. They did the perfect thing by taking cheques from you. Hat's off to you too, you gave them cheques without consulting anyone in your house and knowing that cheques will bounce as you don't have that much money in your account.
Anyway, if they make there story on this line (which is only case I which NIA will stand against you ), they are "trapped". They will have to acknowledge on record that they executed trades without having sufficient margin in clear violation of SEBI/NSE guidelines. SEBI/NSE will take care of them from here.
If they say, you gave them the cheques first and then trades got executed, you don't owe them money "when" you gave them the cheques and hence NIA is not applicable. (This story will can only be made if you have given cheques on the same day the trades got executed).
In a nutshell, Don't be intimidated by there bluff of cheque bounce case. That's the only weapon they got to scare you. Tell them they can go a file a case and you will contest it. They are more trapped than you are. Just sit tight and don't be intimidated.
Regarding NIA case, please do consult a good lawyer for these intricate details as most of the lower court lawyers won't be knowing about these.
(Google it, you will find all the references regarding the cases and judgements of SC/HC pertaining to NIA. I dug it out long time ago (~1 year ago) but unfortunately don't have those links bookmarked)
You might also need to consult on immediately filing a criminal complaint and if possible FIR against the branch for forcible taking cheques from you by intimidation and threat. (Do all that you can to get the FIR registered). A criminal case on there head, and the bank will come running for compromise.