Lok Sabha clears cheque bouncing bill

In order to reduce the number of cheque dishonour cases pending in courts, the Lok Sabha passed the Negotiable Instruments (Amendment) Bill, 2017.

The bill aims to counter the delaying tactics employed by people who want to avoid paying cheques issued by them. Once it gets Parliament’s nod, it will preserve the sanctity of cheque transactions by stopping the practice of people trying to deliberately delay cases through filing of appeals and obtaining stay on proceedings.

The bill proposes to insert a new provision wherein a court can order the drawer of the dishonoured cheque to pay interim compensation to the complainant, in a summary trial or a summons case upon framing of charges. The interim compensation will be up to 20% of the amount of the cheque. A similar provision has also been inserted in case of an appeal by the drawer of the cheque against a conviction. The appellate court may order the appellant to deposit at least 20% of the fine or compensation awarded by the trial court.

The changes were envisaged after the government received several representations from the public including traders relating to pendency of cheque dishonour cases. “It is proposed to amend the said Act with a view to address (ing) the issue of undue delay in final resolution of cheque dishonour cases so as to provide relief to payees of dishonoured cheques and to discourage frivolous and unnecessary litigation which would save time and money,” said the statement of objects and reason of the bill.

“The proposed amendments will strengthen the credibility of cheques and help trade and commerce in general by allowing lending institutions, including banks, to continue to extend financing to the productive sectors of the economy,” it added.