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Amendment to the Negotiable Instruments act, 1881 (138 ni)

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Amendment to the Negotiable Instruments act, 1881 (138 ni)

Amendment to the Negotiable Instruments act, 1881 (138 ni)

Banking amended the Negotiable Instruments act, 1881, Public financial institutions and negotiable instruments law in the late 80s, by which, if the cheques issued by a person is dishonored in case of fund insufficiency of the issuer’s account, the drawer will be penalized. The main reason for incorporating these provisions was to motivate the usage of cheques and to improve its credibility. According to these amendments, it’s a criminal offence to Dishonor the cheque and Criminal liability will be charged on the drawer.

The fundamental reason for implementing the negotiable instrument act was to promote the accountability of the issuer and to take actions considered as a criminal in case he is found trying to be defrauding. This can ensure that the drawer of the cheque knows the seriousness while issuing a cheque. This amendment also includes taking actions for stop payment and signature mismatch.

After about thirty years of the introduction of the amendment and starting treating Cheque dishonor as a criminal offence, it has been found that all those cheque bounce cases are treated as civil ones. It has also been found as the criminal trials for those cheque bounce cases, the credibility was getting lower. But still cheque remains one of the most used transaction method commercially.

To resolve the above issue, a section 148 has been introduced newly which stated that, if the drawer files an appeal against the conviction under section 138, the Appellant may be ordered by the Appellate court to deposit an amount. That amount will be twenty percent of the fine or the total compensation granted by the trial court. The payable amount stated by the provision would be in addition to any interim compensation paid by the Appellant under section 143A.

Wholly, once when the considerable amount is deposited by the Appellant/drawer of cheques or the accused/drawer of the cheques, the matter would be given more importance.

If those considerations and actions are not improved regularly to add more practicality to cheque bounce cases, it’s hard to sustain the importance of introducing cheque bounce as a criminal offence.