NEGOTIABLE INSTRUMENTS
(AMENDMENT) ACT, 2018 THE
NEGOTIABLE INSTRUMENTS (AMENDMENT) ACT, 2018 [Act
No. 20 of 2018] [02nd
August, 2018] An Act further to amend the Negotiable Instruments
Act, 1881. Be it enacted by Parliament in the
Sixty-ninth Year of the Republic of India as follows:-- (1) This Act may be
called the Negotiable Instruments (Amendment) Act, 2018. (2) It shall come into
force on such date[1]
as the Central Government may, by notification in the Official Gazette,
appoint. In the Negotiable Instruments Act, 1881
(26 of 1881) (hereinafter referred to as the principal Act), after section
143, the following section shall be inserted, namely:-- "143A. Power to direct interim
compensation (1) Notwithstanding
anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the
Court trying an offence under section 138 may order the drawer of the
cheque to pay interim compensation to the complainant? (a) in a summary trial or
a summons case, where he pleads not guilty to the accusation made in the
complaint; and (b) in any other case,
upon framing of charge. (2) The interim
compensation under sub-section (1) shall not exceed twenty per cent. of the
amount of the cheque. (3) The interim
compensation shall be paid within sixty days from the date of the order under
sub-section (1), or within such further period not exceeding thirty days as may
be directed by the Court on sufficient cause being shown by the drawer of the
cheque. (4) If the drawer of the cheque
is acquitted, the Court shall direct the complainant to repay to the drawer the
amount of interim compensation, with interest at the bank rate as published by
the Reserve Bank of India, prevalent at the beginning of the relevant financial
year, within sixty days from the date of the order, or within such further
period not exceeding thirty days as may be directed by the Court on sufficient
cause being shown by the complainant. ? (5) The interim
compensation payable under this section may be recovered as if it were a fine
under section 421 of the Code of Criminal Procedure, 1973 (2 of
1974). (6) The amount of fine
imposed under section 138 or the amount of compensation awarded
under section 357 of the Code of Criminal Procedure, 1973 (2 of
1974), shall be reduced by the amount paid or recovered as interim compensation
under this section.". In the principal Act,
after section 147, the following section shall be inserted, namely:-- "148. Power of Appellate Court to
order payment pending appeal against conviction. (1) Notwithstanding
anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), 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
twenty per cent. of the fine or compensation awarded by the trial Court: Provided that the amount payable under
this sub-section shall be in addition to any interim compensation paid by the
appellant under section 143A. (2) The amount referred
to in sub-section (1) shall be deposited within sixty days from the date of the
order, or within such further period not exceeding thirty days as may be
directed by the Court on sufficient cause being shown by the appellant. (3) The Appellate Court
may direct the release of the amount deposited by the appellant to the
complainant at any time during the pendency of the appeal: Provided that if the appellant is
acquitted, the Court shall direct the complainant to repay to the appellant the
amount so released, with interest at the bank rate as published by the Reserve
Bank of India, prevalent at the beginning of the relevant financial year,
within sixty days from the date of the order, or within such further period not
exceeding thirty days as may be directed by the Court on sufficient cause being
shown by the complainant.". Statement of Objects
and Reasons - NEGOTIABLE INSTRUMENTS (AMENDMENT) ACT, 2017 STATEMENT
OF OBJECTS AND REASONS (1) The Negotiable
Instruments Act, 1881 (the Act) was enacted to define and amend the law
relating to Promissory Notes, Bills of Exchange and Cheques. The said Act has
been amended from time to time so as to provide, inter alia, speedy disposal of
cases relating to the offence of dishonour of cheques. However, the Central
Government has been receiving several representations from the public including
trading community relating to Pendency of cheque dishonour cases. This is
because of delay tactics of unscrupulous drawers of dishonoured cheques due to
easy filing of appeals and obtaining stay on proceedings. As a result of this,
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. (2) It is proposed to
amend the said Act with a view 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 will 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. (3) It is, therefore,
proposed to introduce the Negotiable Instruments (Amendment) Bill, 2017 to
provide, inter alia, for the following, namely:- (i) to insert a new
section 143A in the said Act to provide that the Court trying an offence under
section 138 may order the drawer of the cheque to pay interim compensation to
the complainant, in a summary trial or a summons case, where he pleads not
guilty to the accusation made in the complaint; and in any other case, upon
framing of charge. The interim compensation so payable shall be such sum not
exceeding twenty per cent. of the amount of the cheque; and (ii) to insert a new
section 148 in the said Act so as to provide 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 twenty per cent. of
the fine or compensation awarded by the trial court. ? (4) The Bill seeks to
achieve the above objectives.
Preamble - NEGOTIABLE INSTRUMENTS
(AMENDMENT) ACT, 2018PREAMBLE