President Pranab Mukherjee promulgates ordinance on cheque bounce cases
Updated: Jun 17, 2015 04:34:56pm
New Delhi, June 17 (KNN) President Pranab Mukherjee has promulgated the Negotiable Instruments (Amendment) Ordinance, 2015, which will now allow filing of cheque bounce case at the place where the cheque was presented for clearance.
According to a leading news agency, the President promulgated the Ordinance on Monday. The ordinance will enable filing of cheque bounce cases in the place where the cheque was presented for clearance or payment and not the place of issue.
The Union Cabinet, chaired by the Prime Minister Narendra Modi, had given its approval for the proposal to promulgate the Negotiable Instruments (Amendment) Ordinance, 2015, on June 10.
Various financial institutions and industry associations have been expressing difficulties, arising out of the recent legal interpretation of the place of jurisdiction for filing cases under Section 138 to be the place of drawers’ bank by the Supreme Court.
The proposed amendments to the Negotiable Instruments Act, 1881 (“The NI Act”) focused on clarifying the jurisdiction related issues for filing cases for offence committed under section 138 of the NI Act.
The clarification of jurisdictional issues may be desirable from the equity point of view as this would be in the interests of the complainant and would also ensure a fair trial.
The clarity on jurisdictional issue for trying the cases of cheque bouncing would increase the credibility of the cheque as a financial instrument. This would help the trade and commerce in general and allow the lending institution, including banks, to continue to extend financing to the economy, without the apprehension of the loan default on account of bouncing of a cheque.
The Section 138 of the NI Act deals with the offence pertaining to dishonour of cheque for insufficiency, etc., of funds in the drawer’s account on which the cheque is drawn for the discharge of any legally enforceable debt or other liability. The section 138 of the NI Act provides for penalties in case of dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque. The object of the NI Act is to encourage the usage of cheque and enhancing the credibility of the instrument so that the normal business transactions and settlement of liabilities could be ensured. (KNN Bureau)
According to a leading news agency, the President promulgated the Ordinance on Monday. The ordinance will enable filing of cheque bounce cases in the place where the cheque was presented for clearance or payment and not the place of issue.
The Union Cabinet, chaired by the Prime Minister Narendra Modi, had given its approval for the proposal to promulgate the Negotiable Instruments (Amendment) Ordinance, 2015, on June 10.
Various financial institutions and industry associations have been expressing difficulties, arising out of the recent legal interpretation of the place of jurisdiction for filing cases under Section 138 to be the place of drawers’ bank by the Supreme Court.
The proposed amendments to the Negotiable Instruments Act, 1881 (“The NI Act”) focused on clarifying the jurisdiction related issues for filing cases for offence committed under section 138 of the NI Act.
The clarification of jurisdictional issues may be desirable from the equity point of view as this would be in the interests of the complainant and would also ensure a fair trial.
The clarity on jurisdictional issue for trying the cases of cheque bouncing would increase the credibility of the cheque as a financial instrument. This would help the trade and commerce in general and allow the lending institution, including banks, to continue to extend financing to the economy, without the apprehension of the loan default on account of bouncing of a cheque.
The Section 138 of the NI Act deals with the offence pertaining to dishonour of cheque for insufficiency, etc., of funds in the drawer’s account on which the cheque is drawn for the discharge of any legally enforceable debt or other liability. The section 138 of the NI Act provides for penalties in case of dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque. The object of the NI Act is to encourage the usage of cheque and enhancing the credibility of the instrument so that the normal business transactions and settlement of liabilities could be ensured. (KNN Bureau)
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