Lok Sabha passes Negotiable Instruments (Amendment) Bill, 2017
Lok Sabha has passed Negotiable Instruments (Amendment) Bill, 2017 to reduce the number of cheque dishonour cases pending in courts. The bill amends Negotiable Instruments Act, 1881 to primarily address issues of dishonor of cheques and deal with unnecessary delay in disposal of such cases.
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. The Negotiable Instruments Act, 1881 defines promissory notes, bills of exchange and cheques. It also specifies penalties for bouncing of cheques and other violations with respect to such negotiable instruments.
Key Features of Bill
Interim compensation: The 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 and will be paid by drawer within 60 days of trial court’s order to pay such compensation.
Deposit in case of appeal: The Bill inserts another new Section 148-A in the parent act specifying that if drawer convicted in cheque bouncing case files appeal, appellate court may direct him to deposit minimum 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 an appeal case), along with interest. This amount will be repaid within 60 days of court’s order.
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Month: Current Affairs - July, 2018