Skip to main content

Cheque Bounce Cases Can Now be Filed Where It is Presented

By
Parliament passes law to facilitate easy legal recourse after Rajya Sabha okay
Parliament has passed a law allowing cheque bounce cases to be filed at the place where the cheque is presented for clearance and not the place of issue, a change that is expected to go a long way in improving legal recourse in such cases.
The Rajya Sabha passed the Negotiable Instruments (Amendment) Bill on Monday without any debate.
The Minister of State for Finance Jayant Sinha moved the bill for passage that had been passed by the Lok Sabha earlier.
The amendments to the Negotiable Instruments Act will impact over 18 lakh cheque bounce cases pending in various courts, Sinha said while moving the bill.
The amendments overturn a Supreme Court ruling which said the cases have to be initiated where the cheque-issuing branch was located.
The court had reasoned that the territorial jurisdiction for dishonour of cheques is restricted to the court within whose local jurisdiction the offence was committed, where the cheque is dishonoured by the bank on which it is drawn.
Subsequently , stakeholders made representations to the government, pointing out the wide impact this judgment would have on the business interests offering undue protection to defaulters at the expense of the aggrieved complainant.
The government decided to amend the Negotiable Instruments Act, 1881.
As per the amendment cases involving bounced cheques can be filed only in a court in whose jurisdiction the bank branch of the payee, the person who receives the cheque, lies.
“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 new provision says.
Under this rule, the aggrieved person can file a cheque bounce case in his area and the defendant will have to travel to defend himself, enhancing the strength of the legal recourse.
The amended law also provides that 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.
The Economic Times, New Delhi, 8th Dec. 2015

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Healthy balance sheets augur well for economy: RBI Governor Sanjay Malhotra

By
  Large tariffs by the United States administration and elevated geopolitical risk have increased near-term global financial stability risks, and along with weather events pose downside risks to domestic growth, Reserve Bank of India(RBI) Governor Sanjay Malhotra said in the foreword to the Financial Stability Report released today.Noting that domestic growth momentum is buoyed by strong domestic drivers, sound macroeconomic fundamentals and prudent policies, Malhotra said: “External spillovers and weather-related events could pose downside risks to growth.”On the other hand, he said the outlook for inflation is benign, and there is greater confidence in the durable alignment of inflation with the Reserve Bank’s target.Commenting that the structural shifts reshaping the global economy are making policy intervention challenging, the Governor emphasised the need for central banks and financial sector regulators to remain vigilant, prudent and agile in safeguarding their economies and...
Post a Comment
Read more