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The government has again taken the ordinance route, this time to fast-track resolution of cheque-bounce cases.
This ordinance is expected to help remove the ambiguity on territorial jurisdiction over dishonour of cheques and ensure a “fair trial” of cheque bounce cases.
With this ordinance, all cheque-bounce cases can be filed only in a court within whose local jurisdiction the bank branch of the payee is situated, and where the payee presents the cheque for payment.
This is the 14th ordinance issued by the Modi Government since it assumed office late last May. The decision to promulgate it was taken at a Cabinet meeting chaired by Prime Minister Narendra Modi on Wednesday.
The ordinance route is being pursued as the Negotiable Instruments (amendment) Bill, 2015 providing clarity on the jurisdictional issue is yet to be discussed and passed in the Rajya Sabha. The Bill was cleared by the Lok Sabha on May 13.
Apex court ruling The new ordinance will address the difficulties arising out of the Supreme Court’s 2014 judgment in the Dashrath Rupsingh Rathod versus State of Maharashtra case.
In its ruling, the apex court held that the territorial jurisdiction for dishonour of cheques is restricted to the court within whose local jurisdiction the offence was committed — which, going by the context of the case, is where the cheque is dishonoured by the bank on which it is drawn.
Appeals for help Following this judgment, representations had been made to the Government by various stakeholders, including industry associations and financial institutions, expressing concern about the impact the judgment will have on business interests.
It was submitted that the apex court judgment would offer undue protection to defaulters at the expense of the aggrieved complainant.
It was felt that the practice of ‘payable at par cheques’ would be given the go-by, and that the current realities of cheque clearing with the introduction of the cheque truncation system would be ignored.
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