Money & Banking

Cheque dishonour cases: Bill to provide interim compensation introduced in LS

K.R.Srivats New Delhi | Updated on January 08, 2018

Interim compensation pegged at maximum of 20% of cheque amount

Legal reforms are finally underway around cheque bounce cases to address the issue of the undue delay in final resolution of such cases in trial courts. Through a new Bill, the Centre not only seeks to provide relief to payees of dishonoured cheques, but also discourage frivolous and unnecessary litigation so as to save time and money.

This Bill -- Negotiable Instruments (amendment) Bill 2017 — was introduced in the Lok Sabha by Finance Minister Arun Jaitley on Tuesday.


The Bill seeks to empower the Court to direct the drawer of the cheque to pay interim compensation to the complainant. The interim compensation can be an amount not exceeding 20 per cent of the amount of the cheque, according to the Statement of Objects and Reasons of the Bill.

Also, in the case of appeal by drawer against conviction, the Appellate Court may direct the appellant to deposit such sum which should be a minimum of the 20 per cent of the compensation awarded by the trial court, the Bill said.


The proposed amendments will strengthen the credibility of cheques and help trade and commerce in general by allowing lending institutions, including banks, to continue to extend financing to the productive sectors of the economy, according to the Statement of Objects and Reasons of the Bill.

Published on January 02, 2018

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