August , 2018
Cheque bounce case can lead to big penalty
15:02 pm

Kuntala Sarkar

A cheque bounce case can now lead to bigger penalties after the Indian Parliament passed ‘The Negotiable Instruments (Amendment) Bill, 2018’ on July 23, 2018, allowing a court to try offences related to cheque bounce promptly and “direct the drawer to pay a minimum of 20% of the cheque amount as interim compensation.” This bill has also been also passed by the Rajya Sabha. According to the statement of objects and reasons, the amendment was instigated “with a view to address 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 unnecessary litigation which would save time and money.” The most recent amendment inclined to insert Section 143A and Section 148 in the Act to afford that a court trying a cheque bounce offence under Section 138 can order the drawer of the cheque to pay interim compensation to the petitioner. The drawer, who doesn’t plead guilty of the accusation, will have to pay at least 20% of the cheque amount as provisional compensation within 60 days of the trial court’s order and additional 20% compensation will have to be paid if the drawer goes for an appeal. If the drawer is absolved, the court may direct the payee to repay the amount with interest that was paid as the interim compensation previously.

The Union Minister of State for Finance, Shiv Pratap Shukla said that over 16 lakh cheque bounce cases are pending in subordinate courts and 34,000 cases have gone to the higher courts. On the other hand, in Karnataka, 3 lakh cases out of 7 lakh criminal cases are related to cheque bounce. Members of opposition parties, including Congress, supporting the bill said that the government can come out with a law where a person who defaults on cheque payments would be banned from issuing a cheque for upcoming five years. They also gave a suggestion that the government can label cheque payment default as a non-bailable offence.

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