Dishonoured cheques likely to attract stringent punishment from next year

New Delhi, Aug 28 (KNN) In order to boost digital payment in the country, the government is preparing to amend the law to introduce stringent punishment for bounced cheques from next year.

The Ministry of Law and Justice is planning to present the amendment in the Negotiable Instruments Act, next year—aimed to cut down the pendency of nearly 20 lakh cheque bounce cases in India.

The government is reportedly planning to come up with a provision under which the cheque issuer who purposely issue dishonoured cheques will face strict action such as imprisonment within 1-2 months.

Government is planning to introduce this provision during the Budget Session next year.

Under this, in case the cheque issuer fails to pay penalty along with the cheque amount, he or she might be liable to be jailed.

Presently, cheque bounce is a bailable offence under the current law, which enables defaulters to stay away from jail as long as the trial is on. The law stipulates imprisonment up to two years or fine that may extend up to double the dishonoured amount, or both. But the case drags for years in the court for settlement.

Of the options being considered, the government could even make the law a non-bailable offence.