Parliment passes Negotiable Instruments (Amendment) Bill

The Negotiable Instruments (Amendment) Bill, which was earlier passed by the House, was returned by the Rajya Sabha this week after making some changes.

The amendments -- which were effected by Rajya Sabha --were moved by Minister of State for Finance Jayant Sinha. The Lok Sabha later passed the Bill through a voice vote.

The bill seeks to replace an ordinance which was re-promulgated earlier.

The amendments in the Negotiable Instruments Act will have implications for over 18 lakh cheque bounce cases pending in various courts. 

The amendment, which enables filing of cheque bounce cases in the place where the cheque was presented for clearance or payment and not the place of issue, seeks to overturn a Supreme Court ruling which said the cases have to be initiated where the cheque-issuing branch was located.

There are an estimated 18 lakh cheque bounce cases across the country, of which about 38,000 are pending in High Courts.

The amendment provides that cases of bouncing of cheques can be filed only in a court in whose jurisdiction the bank branch of the payee (person who receives the cheque) lies.

If a complaint against a person issuing a cheque has been filed in the court with the appropriate jurisdiction, then all subsequent complaints against that person will be filed in the same court, irrespective of the relevant jurisdiction area.