Amendments to the Negotiable Instruments Act, 1881

The Central Government had received representations in relation to pending cheque dishonour cases where the final adjudication of such cases was being delayed by merely filing appeals and obtaining stay on proceedings. Therefore, the Ministry of Law and Justice amended the Negotiable Instruments Act, 1881 (‘NIA’) on August 2, 2018. Set out below is a summary of the key changes:

i.  Pursuant to the newly inserted Section 143A, Courts trying offences under Section 138 of the NIA (in relation to dishonour of cheque for insufficiency, etc., of funds in the account) have been granted the power to direct the drawer of a cheque to pay interim compensation, not exceeding 20% of the amount of the cheque, to the complainant (a) in a summary trial or summons case, where he pleads not guilty; and (b) in any other case, upon framing of charge against such drawer.

ii.  By inserting the new Section 148, the Appellate Court, in an appeal by the drawer against a conviction under Section 138 of the NIA, has been granted the power to order the appellant to deposit a minimum of 20% of the fine or compensation awarded by the Trial Court. This section clarifies that such amount will be in addition to any interim compensation paid by the appellant under Section 143A of the NIA.

Published In:Inter Alia - Quarterly Edition - September 2018 [ English Chinese japanese ]
Date: September 1, 2018