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Bill to effectively deal with cheque bounce cases back in Lok Sabha

The Bill seeks to overturn a Supreme Court ruling which said the case has to be initiated where the cheque-issuing branch was located.

By: Press Trust of India | New Delhi | Published: July 27, 2015 4:37:29 pm
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A bill, providing for trial in cheque bounce cases at the place where the cheque was presented for clearance and not the place of issue, was re-introduced in the Lok Sabha on Monday, with an aim of helping lakhs of people suffering due to jurisdictional issues.

The Negotiable Instruments (Amendment) Bill, 2015, introduced by Finance Minister Arun Jaitley, seeks to replace an ordinance, which was promulgated last month.

The ordinance was promulgated as the bill, which was passed by the Lok Sabha, could not be approved by the Rajya Sabha during the Budget session.

The amendments will enable filing of cheque bounce cases in the place where the cheque was presented for clearance or payment and not the place of issue.

The Bill seeks to overturn a Supreme Court ruling which said the case has to be initiated where the cheque-issuing branch was located.

There are an estimated 18 lakh people facing cheque bounce cases across the country.

The amendment provides that cases of bouncing of cheques can be filed only in a court in whose jurisdiction the bank branch of the payee (person who receives the cheque) lies.

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 Statement of Objects of the bill stated that following the apex court ruling, representations have been made by various stakeholders, including industry associations and financial institutions, expressing concern about the wide impact the judgement would have on the business interests as it will offer undue protection to defaulters at the expense of the aggrieved complainant.

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