CHEQUE BOUNCE CASES: NEW PROCEDURES
On July 23, 2018, the Lok Sabha passed the Negotiable Instruments (Amendment) Bill, 2017. The amendment introduces two new sections, Section 143A and Section 148, which bolster the compensation aspect of Section 138 of the Negotiable Instruments Act, 1881, the provision for dishonour of cheques.
SECTION 143A
Section 143A grants a Court trying an offence under Section 138 of the Negotiable Instruments Act, the power to allow an interim compensation to be paid by the drawer to the complainant. Such compensation may be paid under certain circumstances, including where the drawer has pleaded ‘not guilty’ to the charge made in the complaint. The interim compensation amount will not exceed 20 per cent of the cheque amount and will have to be paid within 60 days, from the date of the Court order.
If however, the drawer is acquitted, then the complainant has to repay the interim compensation with a bank interest, prevailing and as fixed by the RBI. This amount has to be paid by the complainant to the drawer within a period of 60 days, with a further extension of 30 days.
The interim compensation under Section 143A, will be treated as a fine under the provisions of the Code of Criminal Procedure, and any fine amount further imposed on the drawer, will be reduced by the interim compensation amount already paid.
SECTION 148
Section 148, introduces a similar compensation component. It empowers an Appellate Court, to order an accused under Section 138 of the Negotiable Instruments Act, to deposit 20 per cent of the fine or compensation awarded by the lower court. This deposit is in addition to any interim compensation paid by the appellant under section 143A and has to be made within 60 days of the Court order, with a further 30 day grace period.
During the pendency of the Appeal, the Court may release the deposit amount to the complainant. If however, the appellant is acquitted, the deposit amount has to be repaid by complainant together with an interest prevailing being fixed by the Reserve Bank of India and within a period of 60 days, with a maximum extension of 30 days. more
SECTION 143A
Section 143A grants a Court trying an offence under Section 138 of the Negotiable Instruments Act, the power to allow an interim compensation to be paid by the drawer to the complainant. Such compensation may be paid under certain circumstances, including where the drawer has pleaded ‘not guilty’ to the charge made in the complaint. The interim compensation amount will not exceed 20 per cent of the cheque amount and will have to be paid within 60 days, from the date of the Court order.
If however, the drawer is acquitted, then the complainant has to repay the interim compensation with a bank interest, prevailing and as fixed by the RBI. This amount has to be paid by the complainant to the drawer within a period of 60 days, with a further extension of 30 days.
The interim compensation under Section 143A, will be treated as a fine under the provisions of the Code of Criminal Procedure, and any fine amount further imposed on the drawer, will be reduced by the interim compensation amount already paid.
SECTION 148
Section 148, introduces a similar compensation component. It empowers an Appellate Court, to order an accused under Section 138 of the Negotiable Instruments Act, to deposit 20 per cent of the fine or compensation awarded by the lower court. This deposit is in addition to any interim compensation paid by the appellant under section 143A and has to be made within 60 days of the Court order, with a further 30 day grace period.
During the pendency of the Appeal, the Court may release the deposit amount to the complainant. If however, the appellant is acquitted, the deposit amount has to be repaid by complainant together with an interest prevailing being fixed by the Reserve Bank of India and within a period of 60 days, with a maximum extension of 30 days. more
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Oct 31
I welcome the modification in Bill, with a suggestion that complaint be setteled within 30 days as it is my personal experience that the procedure takes long times that too so many years more
Aug 07
Bounce cheques bill welcome but this & it's for Those who have issued written cheques & are liable to obey proceedings, but any law against those who demand blank cheques for ""security purpose"? I m pointing towards many MNCs, businessmans, bankers. Are they free to demand blank cheques ? No law against them ? more
Aug 05
Courts are more flexible in this respect, and would permit more time in spite of the law. more
Aug 02
I GUESS THE FINANCE WORLD HAS MOVED A LONG WAY FROM THE DAYS OF USING CHECKS .....AND SO IF IT IS STILL THE MODE OF PAYMENT PREFERRED, MAY BE ITS A GOOD IDEA TO HAVE JUST A MAX. AMOUNT THAT CAN BE DRAWN IN A SINGLE CHECK TRANSACTION COZ THEN THE DELAYS IN CASHING OR BOUNCING OF THE CHECK TO BE REPLACED BY ANOTHER AND THE LOSS OF INTEREST IN THE INTERMITTENT PERIOD ALL IS FIRST OF ALL LIMITED AND NOT A SCARY FIGURE!! AND THEN OF COURSE ALL THESE OTHER GUARANTEES CAN BE HAD AS THE AMOUNTS TRANSACTED INCREASES....AGAIN ON A SLAB BASIS, MORE GUARANTEES FOR HIGHER AMOUNTS SO AS TO COVER THE INTERIM PERIOD IN THE CASE THAT IT BOUNCES more
Aug 02
