Parliament passes Negotiable Instruments (Amendment) Bill, 2015

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Rajya Sabha has passed the Negotiable Instruments (Amendment) Bill, 2015 that provides for filing of cheque bounce cases at the place where a cheque is presented for clearance and not the place of issue. The bill was passed by Lok Sabha in August 2015, during the Monsoon Session of the parliament.

The Bill seeks to amend the Negotiable Instruments Act, 1881. The amendments in the Negotiable Instruments Act will have implications for over 18 lakh cheque bounce cases pending in various courts. There are an estimated 18 lakh cheque bounce cases across the country, of which about 38,000 are pending in High Courts.

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.  

Key Provisions of the Bill :

  1. The Negotiable Instruments (Amendment) Bill, 2015 seeks  to amend the Negotiable Instruments Act, 1881 and provides the provision that cases of bouncing of cheques can be filed only at the place where a cheque is presented for clearance and not the place of issue.
  2. 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.
  3. If more than one case is filed against the same person before different courts, the case will be transferred to the court with the appropriate jurisdiction.
  4. The Bills also amends the definition of ‘cheque in the electronic form’. The definition has been amended to mean a cheque drawn in electronic medium using any computer resource and which is signed in a secure system with a digital signature, or electronic system.

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