Bill for quick prosecution of cheque bounce cases tabled in Lok Sabha

A bill aimed at reducing inordinate delays in cases of cheque dishonour and payment of interim compensation to the complainants was tabled in the Lok Sabha on Tuesday.

The Negotiable Instruments (Amendment) Bill, 2017, which was introduced by Minister of State Finance Shiv Prasad on behalf of Finance Minister Arun Jaitley, also seeks to do away with "unnecessary" litigation in cheque dishonour cases.

The new provisions will allow the concerned courts to order the drawer of the cheque to pay interim compensation to the complainant, in a summary trial or a summons case where he or she pleads not guilty to the accusations upon framing of charges, according to the bill which amends the Negotiable Instruments Act, 1881.

The interim compensation so payable shall be such a sum not exceeding 20 per cent of the amount of the cheque.

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

Last month, the cabinet had approved the amendment to the current law with an aim not to allow unscrupulous elements holding payments, pending long trial.

"The government has been receiving several representations from the public including the trading community relating to the pendency of cheque dishonour cases. This is because of delaying tactics of unscrupulous drawers of dishonoured cheques due to the easy filing of appeals and obtaining the stay on proceedings," the Statement of Objects and Reasons of the bill said.

As a result of this, it said, injustice is caused to the payee of a dishonoured cheque who has to spend considerable time and resources in court proceedings to realise the value of the cheque.

"Such delays compromise the sanctity of cheque transactions," the statement said while elaborating on the proposed amendments.

Dishonour of cheques due to inadequate funds in the account of the drawer or for other reasons causes a lot of distress in the trade, business and MSME sectors.

A payee of a dishonoured cheque has to spend considerable time and resources in court proceedings to realise money due to him.

The amendment is in line with the government's push to make India a less cash economy. Cheques are an integral part of the payments landscape, and form the backbone of trade and commerce, by being negotiable instruments.