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Government regulations to ameliorate Negotiable Instruments Act


  • To check piling  of cheque-bounce cases in courts, the government is mulling a Bill to amend the Negotiable Instruments Act, which provides for filing of such cases only in the place where the cheque is presented.
  • An amendment Bill, already passed in the Lok Sabha, also seeks to overturn a 2014 Supreme Court ruling which said the case has to be initiated where the cheque-issuing branch was located.
  • If the Bill is issued, it might carry certain suggestions made by the Reserve Bank of India.


  • 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.


  • When the lower house passed the bill in the Budget session, the NDA government had faced tough questions from its own members with some BJP MPs wondering if it would be used by corporates to harass the common man.
  • To address the difficulties faced by the payee or the lender of the money in filing the case under Section 138 (of the Act), because of which large number of cases are stuck, the jurisdiction for offence has been clearly defined keeping in view the interest of complainants.

Bill states

  • The Statement of Objects of the bill states that following the apex court ruling, representations have been made to the government by various stakeholders,including industry associations and financial institutions,
  • These various stake holders,expressing concerns about the wide impact the judgment would have on the business interests as it will offer undue protection to defaulters at the expense of the aggrieved complainant.


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