The Cabinet has decided to bring in an ordinance to amend the Negotiable Instruments Act, which provides for filing of cheque bounce cases in place where the cheque was issued, a move that will benefit 18 lakh people.
The Supreme Court had passed a judgement that if you receive a cheque from someone and the cheque gets bounced, then the jurisdiction for initiating action lies in the state where it was issued.
18 lakh such cases in various courts are pending. Government had brought a Bill in this regard in Parliament, but it was not passed from Rajya Sabha. So to give relief to these people government has brought this ordinance.
What is Negotiable Instruments Act?
- A negotiable instrument means a promissory note, bill of exchange or cheque payable either on order or to bearer.
- An instrument is negotiable by:
By Statute : Promissory notes, bills of exchanges and cheques are negotiable instruments.
- By usage : Bank notes, Bank drafts, treasury bills etc.
- Negotiation is transfer of an instrument from one person to another in such a manner as to express the title and to represent the transferee the holder thereof.