News & Updates

Bill changing law on bounced cheques cleared

December 18, 2015

Bringing relief to scores of Indians aggrieved by bounced cheques, a bill permitting the filing of cases at the place where a cheque is presented for clearance and not the place of issue was approved by Parliament with the Rajya Sabha giving its nod on Monday.

Minister of State for Finance Jayant Sinha moved the Negotiable Instruments (Amendment) Bill, 2015, which was passed by the Lok Sabha in the Monsoon session, in the upper house to seek to replace an ordinance that was re-promulgated earlier.


The amendment seeks to overturn a Supreme Court ruling which said cases have to be initiated where the cheque-issuing branch was located, and provides that cases of cheque bouncing can now be filed only in a court that has jurisdiction over the bank branch of the payee.

The changes in the Negotiable Instruments Act will have implications for over 1.8 million cheque bounce cases pending in various courts, Sinha told the house.

If a complaint against a person issuing a bounced 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.

The statement of objects and reasons of the bill says that following the Supreme Court's ruling, representations were made by various stakeholders concerned about the wide impact the judgment would have on business interests as it will offer undue protection to defaulters at the expense of the aggrieved complainant.


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