Negotiable Instruments (Amendment) Bill-2017

With the objective of reducing delay in proceedings pertaining to dishonour of cheques and to provide interim relief to the payee in such cases, the Negotiable Instruments (Amendment) Bill of 2017 was tabled before the Lok Sabha.

Negotiable instrument refers to any legal documents like cheques, promissory notes, bill of exchange etc which promises to pay the bearer/holder of the instrument or the person whose name is written on the instrument a specific amount of money either on demand or after a specified time i.e. on some future date.
Cheque is defined in Section 6 of the negotiable instruments act. A cheque has three main parties viz. Drawer (maker of the cheque); Drawee (person thereby directed to pay. for cheques, it is bank); and Payee (the person named in the instrument, to whom the money is to be paid).

Following are the main provisions of the recently introduced bill:

1. A new Section 143 A has been inserted which will allow the courts to order the drawer of the cheque to pay interim compensationto the complainant.
2. The interim compensation should not exceed 20 percent of the amount of the cheque, and will have to be paid by the drawer within 60 days of the trial court’s order to pay such compensation.
3. If the drawer is acquitted, the court may direct the payee to repay the amount paid as interim compensation with interest.
4. Another new Section 148-A says that in case of appeal by drawer against conviction, the Appellate Court may direct the appellant to deposit 20 per cent of the compensation awarded by the trial court.