Negotiable Instruments (Amendment) Bill passed by Lok Sabha

Negotiable Instruments (Amendment) Bill passed by Lok Sabha

The Lok Sabha yesterday passed the Negotiable Instruments (Amendment) Bill. The Bill simplifies the law relating to cheque bouncing and makes if convenient for payees if the cheque bounces.


The Bill proposes to inserts a new sub-clause to the existing Section 142 [sub-clause (2)]. It reads as follows,


"(2) The offence under Section 138 shall be inquired into and tried only by a court within whose local jurisdiction the bank branch of the payee, where the payee presents the cheque for payment, is situated
"

The Bill also introduces a new Section [142A] in the N.I Act. It reads as follows;

"(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 or any other judgment, decree, order or directions of any court, all cases arising out of section 138 which were pending in any court, whether filed before it, or transferred to it, before the commencement of the Negotiable Instruments (Amendment) Act, 2015, shall be transferred to the court having jurisdiction under sub-section (2) of section 142 as if that sub-section had been in force at all material times.

(2) Notwithstanding anything contained in sub-section (2) of section 142 of sub-section (1), where the payee or the holder in due course, as the case may be, has filed a complaint against the drawer of a cheque in the court having jurisdiction under sub-section (2) of section 142 or the case has been transferred to that court under sub-section (1), all subsequent complaints arising out of section 138 against the same drawer shall be filed before the same court irrespective of whether those cheques were presented for payment within the territorial jurisdiction of that court.


(3) If, on the date of commencement of the Negotiable Instruments (Amendment) Act, 2015, more than one prosecution filed by the same person against the same drawer of cheques is pending before different courts, upon the said fact having been brought to the notice of the court, such court shall transfer the case to the court having jurisdiction under sub-section 142(2) before which the first case was filed as if that sub-section had been in force at all material times."


It was in Dashrath Rupsingh Rathod vs. State of Maharashtra a three Judge Bench of the Supreme Court held that  a Complaint of Dis-honour of Cheque can be filed only  to  the  Court  within  whose  local jurisdiction the offence was committed, which  in  the  present  context  is where the cheque is dishonoured by the bank on which it is drawn. The Court clarified that the Complainant  is  statutorily  bound  to comply with Section 177 etc. of the CrPC and therefore the  place  or  situs where the Section 138 Complaint is to be filed is not of his choosing. Supreme Court in Dashrath Rupsingh Rathod Vs. State of Maharashtra & Anr. Overruled the two Judge Bench Judgment in
 
K. Bhaskaran v. Sankaran Vaidhyan  Balan  (1999)  7 SCC 510 wherein  it was held that “the offence under Section 138 of the Act can be completed only with the concatenation of a number of acts.

A two Judge Bench of the Supreme Court recently dismissed  the Special Leave Petition as withdrawn, filed against the Bombay High Court Judgment which held that dis-honour of “AT PAR” Cheque cases can be filed to the Court within whose local jurisdiction the nearest available branch of bank of the drawer situated explaining the Apex Court  Judgment in 
Dashrath Rupsingh Rathod vs. State of Maharashtra
. Earlier Supreme Court had stayed the Bombay High Court Judgment. It was in Ramanbhai Mathurbhai Patel  vs State of Maharashtra,  Justice M.L.Tahalyani explained the dictum in Dashrath vs. State of Maharashtra
 in which a three Judge Bench of the Supreme Court held that dis-honour of Cheque cases can be filed only to the Court within whose local jurisdiction, the offence was Committed; ie, where the cheque is dishonoured by the bank on which it is drawn.

You may read more of our coverage on law relating to negotiable instruments here.

Read the Bill here.