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Latest amendment to the Negotiable Instruments Act. (2018)

Negotiable Instruments (Amendment) Act, 2018.


A bill to amend the Negotiable Instruments Act (Hereinafter referred to as “Act”) was recently passed by both the houses of parliament resulting into an amendment to the existing act. This new amendment has been brought into effect in order to pave the way for speedy disposal of cases pending due to unavoidable cheque bounce consequences.

The provision of awarding interim compensation by the drawer of the cheque to the complainant has been introduced by bringing in a new section 143A in the Act. The interim compensation would be up to the maximum of 20% of the value of the cheque, as per the discretion of the court, in cases wherein the accused does not plead guilty in summary trial or summons cases. The interim compensation is required to be paid within 60 days of the order. In case of acquittal of accused after trial, the interim compensation has to be returned to the complainant with interest within 60 days from the date of such acquittal.

Section 143 of the Act, provides that the cases relating to cheque bounce are dealt with as per the summary procedure mentioned under Order XXXVII of the Code of Civil Procedure (Hereinafter referred to as “CPC”) in case of civil action and under Section 262 to 265 of the Criminal Procedure Code (“CrPc”) in case of criminal action.

The same provisions will be applicable in case an appeal is preferred by the drawer against his conviction in cheque bounce cases, wherein the he will be required to deposit minimum of 20% of the fine or compensation awarded by the Trial Court. It shall be deposited within sixty days from the date of the order.


The new amendment would reduce the pendency of cases to a great extent. As fraudulent drawers will think twice before involving themselves into cumbersome procedure of trial as they would be required to deposit 20% of the cheque amount for obtaining leave to defend in civil matters and after framing of charges in criminal actions. People will think twice.

Earlier, trial was sought because of awareness about long pendency of such cases thereby to avail benefit of loopholes to run scot free. Now, a lock-in of 20% amount, on the part of those seeking trial, will be beneficial to a great extent and some of them would prefer to pay the whole amount instead of going for the impending trial after paying the interim compensation in addition to all other legal expenses, which may far exceed their present liability. 

Now, the fraudulent cases would be reduced to a great extent and only genuine concerns will be ready and willing to ask for the proper trial. This amendment will be helpful in quick disposal of cheque bounce related cases. 



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