Parliament Passes Negotiable Instruments Amendment Bill With Provision For Interim Compensation

Parliament Passes Negotiable Instruments Amendment Bill With Provision For Interim Compensation

The new Negotiable Instruments Amendment Bill provides for interim compensation to the complainant to the tune of 20% of cheque amount.

The Rajya Sabha has passed the Negotiable Instruments(Amendment) Bill on Thursday. The Lok Sabha had passed  the Bill on July 23, 2018.

The amendment introduces a new provision, Section 143A in the Act, which gives power to the Court to order payment of interim compensation by the drawer of the cheque to the complainant. As per this provision, interim compensation not exceeding twenty percentage of the cheque amount can be ordered to be paid in cases where the accused does not plead guilty in a summary trial or summons case.  The interim compensation has to paid within a period of sixty days of the order. It can be recovered in the manner of recovery of fine as provided in Section 421 of the Code of Criminal Procedure. The provision further states that the interim compensation so received has to be returned by the complainant along with interest at bank rates as prescribed by the Reserve Bank of India, if the accused is acquitted after trial.

The amendment also introduces Section 148 in the Act, empowering the appellate court to direct deposit of a minimum of 20% of the cheque amount in appeal by the drawer against conviction, within a period of sixty days. This amount can be released to the complainant and has to be returned to the accused if the appeal is allowed.

According to the statement of objects and reasons, the amendment is introduced “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”. It is also stated that the central government was receiving several representations from the trading community regarding the delay in cheque dishonor cases.

As per a report in Times of India, in the Lok Sabha discussion preceding the passing of the bill, Minister of State for Finance Shiva Pratap Shukla said that the amendment will reduce delay in cases. However, CPI(M) MP A.Sampath opposed the bill as unconstitutional and termed it as  “a bill for money launderers”. Shashi Tharoor MP supported the Bill, but expressed that it should have contained provisions to enable “trial in absentia”. Kalyan Banerjee, MP of TMC too supported the bill as ensuring justice to victims.

With the Rajya Sabha also endorsing the Bill, the legislative process of amendment is complete. What now remains is the notification of the amendment by the Central Government in the official gazette, on which the amendment will take immediate effect.

Read the Bill Here