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Govt approves amendment in law to provide relief in cheque bounce cases

The Union Cabinet on Friday, Dec 15, cleared a proposal to amend the Negotiable Instruments Act, 1881 to enable courts to order interim compensation to the payees of bounced cheques.

Announcing the Cabinet decision, Law minister Ravi Shankar Prasad said the government is going to amend the law to deal with cheque-bounce cases. The government would also set up a mechanism to fast track trials related to such matters, he said.

“For repeat offenders, there will be a stronger provision in the new law,” said Prasad.

The move is intended to address the problem involved in recovering payments because of the time involved in litigation and is likely to provide a major relief to small and medium traders, many of whom have to engage in long-drawn court cases to recover payments made through cheques that were dishonoured.

The compensation will be a part of the cheque amount, which could be given both at the trial stage and the appellate state of the litigation, said media reports, quoting officials.

Amendments to the law propose that an alleged offender would not be allowed to appear before any court unless he deposits a certain amount of the disputed amount.

If the drawer – one who wrote out the cheque – is acquitted, the court may direct the payee to repay the amount paid as interim compensation with interest.

Similarly, the appellate courts would be enabled to order the appellant to deposit a part of the compensation awarded by the trial courts at the time of filing appeal.

“Dishonour of cheques due to inadequate funds in the account of the drawer of the cheque or for other reasons causes serious distress in the trade, business and MSME sectors. It causes incalculable loss and inconvenience to payees and erodes the credibility of cheques to a large extent,” said Media Reports Quoting an official.

Over 18 lakh cases of cheque bounce are reportedly pending in various courts in the country.

The changes are meant to address various representations from the public and the trading community.

The proposed amendment would reportedly be placed in the Parliament during the ongoing winter session.

The post Govt Approves Amendment in law to provide relief in Cheque Bounce Cases appeared first on APN Live.

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Govt approves amendment in law to provide relief in cheque bounce cases


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