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A Bill to amend the Negotiable Instruments Act, 1881, to provide for interim compensation to the payee of a cheque, both at the trial stage and at the appellate stage, got the go-ahead from the Cabinet on Friday.
The amendment will allow a court to order interim compensation to the payee of a cheque, a part of the amount at the trial stage itself. If the drawer is acquitted, the court may direct the payee to repay the amount paid as interim compensation with interest. Similarly, appellate courts will be enabled to order the appellant to deposit a part of the compensation awarded by the trial court at the time of filing appeal.
A government official said this is being done to help trade and commerce, particularly the MSME sector, and order to increase the credibility of the cheque as a financial instrument.
The move follows representations from the public and the trading community regarding the injustice caused to payees as a result of pendency of cheque dishonour cases.
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