New Bill to ensure fair trial in cheque bounce cases

The Lok Sabha on Wednesday passed through voice vote a Bill to amend the Negotiable Instruments Act so as to ensure “fair trial” of cheque-bounce cases.

Keeping in view the interests of complainants, the Negotiable Instruments (amendment) Bill, 2015 had clarified the territorial jurisdiction for trying cases of cheque dishonour.

Once the Bill is enacted into law, all cheque-bounce cases can be filed only by a court within whose local jurisdiction the bank branch of the payee is situated, and where the payee presents the cheque for payment.

The amendment is expected to help fast-track resolution of cheque-bounce cases while removing the ambiguity on territorial jurisdiction for dishonour of cheques.

The Bill seeks to address the difficulties arising out of the Dashrath Rupsingh Rathod versus State of Maharashtra case, where the Supreme Court held that the territorial jurisdiction for dishonour of cheques is restricted to the court within whose local jurisdiction the offence was committed — which in the present context is where the cheque is dishonoured by the bank on which it is drawn.