January 03, 2018
Key highlights of the Negotiable Instruments (Amendment) Act, 2017
- Provision for interim compensation- The amendment introduces Section 143A which provides for power to order interim compensation. It states that the Court trying an offence under Section 138 (dishonor of cheque on account of insufficient funds) may order the drawer of the cheque to pay interim compensation to the complainant. However, the amount of interim compensation shall not exceed twenty per cent of the amount of the cheque.
- Power of Appellate Court to order Payment of Pending Appeal against Conviction- The Bill seeks to insert Section 148 in the Negotiable Instruments Act which provides that in an appeal by the drawer against conviction under Section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of 20% of the fine awarded by the trial Court.
The aforesaid amendments in the existing Negotiable Instrument Act, 1881 has been done with the intent to enable speedy disposal of cases relating to the offence of dishonour of cheques. Finance Minister, Shri Arun Jaitley has apprised that the Act has been amended with the object 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 frivolous and unnecessary litigation which would save time and money.
The proposed amendments are expected to strengthen the credibility of cheques and help trade and commerce in general by allowing lending institutions, including banks, to continue to extend financing to the productive sectors of the economy