CHEQUE BOUNCE CASES: NEW PROCEDURES

Published in news-legal August 02 2018 1
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On July 23, 2018, the Lok Sabha passed the Negotiable Instruments (Amendment) Bill, 2017. The amendment introduces two new sections, Section 143A and Section 148, which bolster the compensation aspect of Section 138 of the Negotiable Instruments Act, 1881, the provision for dishonour of cheques.

This note provides an overview of the amended sections.
SECTION 143A
Section 143A grants a Court trying an offence under Section 138 of the Negotiable Instruments Act, the power to allow an interim compensation to be paid by the drawer to the complainant. Such compensation may be paid under certain circumstances, including where the drawer has pleaded ‘not guilty’ to the charge made in the complaint. The interim compensation amount will not exceed 20 per cent of the cheque amount and will have to be paid within 60 days, from the date of the Court order.
If however, the drawer is acquitted, then the complainant has to repay the interim compensation with a bank interest, prevailing and as fixed by the RBI. This amount has to be paid by the complainant to the drawer within a period of 60 days, with a further extension of 30 days.
The interim compensation under Section 143A, will be treated as a fine under the provisions of the Code of Criminal Procedure, and any fine amount further imposed on the drawer, will be reduced by the interim compensation amount already paid.
SECTION 148
Section 148, introduces a similar compensation component. It empowers an Appellate Court, to order an accused under Section 138 of the Negotiable Instruments Act, to deposit 20 per cent of the fine or compensation awarded by the lower court. This deposit is in addition to any interim compensation paid by the appellant under section 143A and has to be made within 60 days of the Court order, with a further 30 day grace period.
During the pendency of the Appeal, the Court may release the deposit amount to the complainant. If however, the appellant is acquitted, the deposit amount has to be repaid by complainant together with an interest prevailing being fixed by the Reserve Bank of India and within a period of 60 days, with a maximum extension of 30 days.
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