Parliament Passes Bill for Quick Prosecution in Cheque Bounce Cases (Download PDF)


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Lok Sabha has passed Negotiable Instruments (Amendment) Bill, 2017 to reduce number of cheque dishonor cases pending in courts. Bill amends Negotiable Instruments Act, 1881 to primarily address issues of dishonor of cheques & deal w/unnecessary delay in disposal of such cases.

Image of Parliament passes bill for quick prosecution in cheque

Image of Parliament Passes Bill for Quick Prosecution in Cheque

Image of Parliament passes bill for quick prosecution in cheque

Negotiable Instrument

  • It refers to any legal documents like cheques, promissory notes, bill of exchange etc. which promises to pay bearer or holder of instrument or person whose name is written on instrument specific amount of money either on demand or after specified time i. e. on some future date.

  • Negotiable Instruments Act, 1881 defines promissory notes, bills of exchange & cheques.

  • It specifies penalties for bouncing of cheques & other violation w/respect to such negotiable instruments.

Key Features of Bill

  • Interim compensation:

    • Bill inserts new Section 143 A in parent Act to allow court trying offence related to cheque bouncing to direct drawer (person who writes cheque) to pay interim compensation to complainant.

    • This compensation may be paid under certain circumstances, including where drawer pleads not guilty of accusation.

    • It will not exceed 20 % of cheque amount & will be paid by drawer w/i 60 days of trial court’s order to pay such compensation.

  • Deposit in case of appeal:

    • Bill inserts new Section 148-A in parent act specifying that if drawer convicted in cheque bouncing case files appeal, appellate court may direct him to deposit min. of 20 % of fine or compensation awarded by trial court during conviction.

    • This amount will be in addition to any interim compensation paid by drawer during earlier trial proceedings.

  • Returning interim compensation:

  • In case drawer is acquitted during trial or by appellate court, then court will direct complainant to return interim compensation (or deposit in case of appeal case), along w/interest.

  • This amount will be repaid w/i 60 days of court’s order.

- Published/Last Modified on: November 15, 2018

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