Cheque bounce appeals possible only if 50% fine is deposited with new rules

The government is likely to amend Negotiable Instrument Act

The government is planning to amend the Negotiable Instrument Act to go tough on cheque bouncing cases. With the proposed changes, the convicted defaulter has to mandatorily deposit half of the imposed fine or compensation as a precondition for admitting appeal in a court. 

According to the proposed amendment, notwithstanding anything contained in the Code of Criminal Procedure (CrPC), no appeal against conviction will be entertained by the Appellate Court unless the appellant deposits 50 per cent of the fine or compensation awarded by the Trial Court, a report published in The Indian Express, said. 

However, the proposed changes also provide a provision where the appellate court can waive the pre-deposit in case an "appropriate case" is filed. The reason for exemption would have to be provided in writing. The court will also have the discretion to release the deposited amount to the aggrieved complainant in the case.

In his Budget speech, Finance Minister Arun Jaitley had also mentioned that the government is mulling over changing the rules of the act. "As we move faster on the path of digital transactions and cheque payments, we need to ensure that the payees of dishonoured cheques are able to realise the payments. The government is, therefore, considering the option of amending the Negotiable Instruments Act suitably," Jaitley said. 

In 2007, the Supreme Court forbade the collection of fine in case of filing an appeal against a trial court order. Therefore, the proposed rules override the apex court's direction. 

Keeping the SC order in mind, the Finance Ministry has also prepared another plan with the similar pre-deposit condition but giving jurisdiction to the appellate court to issue directions.

Currently, while the Section 138 of the Act provides fine up to double the dishonoured amount and or imprisonment of up to two years, defaulters evade paying fine or jail by keeping the trial on through appeals.

The Indian Express report added that there are more than 1.8 million cases pending in courts across the country, including cases which are five years old.