Parliament passes bill for quick prosecution in cheque bounce cases

Jul 27, 2018 16:24 IST
Parliament passes bill for quick prosecution in cheque bounce cases

The Parliament on July 26, 2018 passed an amended bill that will allow courts to try offences related to cheque bounce expeditiously and direct the drawee to pay a minimum of 20 per cent of the cheque amount as interim compensation.

The Negotiable Instruments (Amendment) Bill, 2018 was passed by the upper house of the Parliament, the Rajya Sabha through a voice vote. The Lok Sabha had cleared the bill on July 23.


The new amendment has been brought in the law to ensure that people have trust and faith on issuing cheques.

Key Highlights

The 1881 law on negotiable instruments has been amended from time to time.

The latest amendments aim to insert Section 143A and Section 148 in the Act to provide that a court trying a cheque bounce offence under Section 138 may order the drawer of the cheque to pay interim compensation to the complainant.

The drawer, who pleads not guilty of the accusation, will have to pay at least 20 per cent of the cheque amount as interim compensation within 60 days of the trial court's order.

An additional 20 per cent compensation will have to be paid if the drawer goes for an appeal.

If the drawer is acquitted, the court may direct the payee to repay the amount paid as interim compensation with interest.

Other Details

The amendments to the negotiable instruments bill received support from many members of the opposition.

However, the opposition suggested stringent penalties to curb cheque payment defaults.

The opposition suggested that the government should come out with laws like other nations such as France and the UAE have, where a person who defaults on cheque payments is barred from issuing a cheque for five years.

The members also suggested that the government make cheque payment default a non-bailable offence.

Currently, over 16 lakh cases of cheque bounce are pending in subordinate courts and around 34,000 such cases have gone to the high court following an appeal.


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