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Lok Sabha passes Negotiable Instruments (Amendment) Bill, 2015

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The Lok Sabha passed the Negotiable Instruments (Amendment) Bill, 2015, to remove the ambiguity and ensure a fair trial in cheque bounce cases. The Bill facilitates filing of cheque bounce cases at the place where a cheque is presented for clearance and not the place of issue. The Bill will amend the Negotiable Instruments Act, 1881 and will impact over 18 lakh cheque bounce cases pending in various courts.

  • The Bill will replace an existing Ordinance promulgated in mid-June, which was passed by the Lower House through a voice vote. According to the Ordinance, all cheque-bounce cases can be filed only in a court within whose local jurisdiction the bank branch of the payee (person who receives the cheque) is situated, and where the payee presents the cheque for payment.
  • The Negotiable Instruments (amendment) Bill 2015 seeks to provide a place of jurisdiction that is fair to both the complainant and the accused (for dishonoured cheques). As per the bill, if a complaint against a person issuing a cheque has been filed in the court with the appropriate jurisdiction, then all subsequent complaints against that person will be filed in the same court, irrespective of the relevant jurisdiction area. Moreover, if more than one case is filed against the same person in different courts, the case will be transferred to the court with the appropriate jurisdiction.
  • The new bill will also amend the definition of electronic chequee which is drawn by using any computer system with a digital signature.