The Parliament recently approved the Negotiable Instruments (Amendment) Bill 2018, which amends the 1881 Act to specify penalties for dishonour of cheques, and other violations with respect to such negotiable instruments with the Rajya Sabha passing the law.
The Lok Sabha passed the Bill on July 23. The Bill has a provision for allowing a court trying an offence related to dishonoured cheques to direct the drawer (one who writes the cheque) to pay interim compensation to the complainant. This interim compensation may be paid under certain circumstances, including where the drawer pleads not guilty of the accusation. This will not exceed 20 per cent of the cheque amount, and will have to be paid by the drawer within 60 days of the trial court’s order to pay such compensation.
The government has said that the Bill is intended to address the issue of undue delay in the final resolution of cheque dishonour cases arising out of “delay tactics of unscrupulous drawers of dishonoured cheques” due to easy filing of appeals and obtaining stay on proceedings. It said that the Bill will provide relief to the payees of dishonoured cheques who have to spend considerable time and resources in court proceedings to realise the value of the cheque. The Bill, which is set to become a law now following President’s assent, will also discourage frivolous and unnecessary litigation.
The Bill specifies that if a drawer convicted in a bounced cheque case files an appeal, the appellate court may direct him to deposit a minimum of 20 per cent of the fine or compensation awarded by the trial court during conviction. This amount will be in addition to any interim compensation paid by the drawer during the earlier trial proceedings.
In case the drawer is acquitted (during trial or by the appellate court), the court will direct the complainant to return the interim compensation (or deposit in case of an appeal case), along with an interest.
This amount will be repaid within 60 days of the court’s order
