Aiming to reduce delays in resolution of cheque bouncing cases, the Negotiable Instruments (Amendment) Bill, 2017, will not become an Act till it is passed by both Houses. Photo: iStock
After being passed by the Lok Sabha, the Negotiable Instruments (Amendment) Bill, 2017, is a step closer to becoming law. In the age of netbanking, businesses across India use cheques, including post-dated ones, to make and receive payments from vendors, suppliers and customers. In some cases, such cheques bounce and the matter ends up in court.
It is easy for the drawer of a dishonoured cheque to file an appeal and obtain a stay on court proceedings. This reduces the credibility of cheques in the world of business.
Here is all you need to know about the proposed changes in the Negotiable Instruments Act on cheque bouncing.
1. The Negotiable Instruments (Amendment) Bill, 2017, aims to amend the Negotiable Instruments Act, 1881, asking the drawer of a cheque that has been dishonoured to pay interim compensation to the complainant.
2. The interim compensation will, however, not exceed 20% of the amount of the cheque that was dishonoured.
3. The interim compensation is to be paid by the drawer of the dishonoured cheque in a summary trial or a summons case. It is applicable even if he pleads not guilty to the charge made in the complaint.
4. The drawer of the cheque has to pay interim compensation within 60 days from the date of the order. If the court is satisfied, it can grant an extension of a further 30 days but not beyond that.
5. In case the drawer of the cheque is acquitted in the case, the complainant has to repay the drawer the interim compensation with interest. The repayment has to be made within 60 days from the date of the court order.
6. Aiming to reduce delays in resolution of cheque bouncing cases, the Negotiable Instruments (Amendment) Bill, 2017, will not become an Act till it is passed by both Houses. Clearance from Rajya Sabha is now awaited.
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