amendments in the negotiable instruments act, 1881
TRANSCRIPT
The President of India has promulgated an
ordinance called the Negotiable Instrument
(Amendment) Ordinance, 2015 (“Ordinance”)to
amend the Negotiable Instrument Act, 1881 (NI
Act).The Ordinance has come into force by
publication in the official gazette on 15 June
2015.
Amendments in the Negotiable Instruments Act, 1881
BackgroundThe Negotiable Instrument (Amendment) Bill, 2015 was passed by the
Lok Sabha on 13 May 2015 and remained pending in the Rajya Sabha.
Since the Parliament was not in session and considering the
circumstances which called for necessary action, the President has
promulgated the Ordinance in order to clarify the jurisdiction related
issues for filing cases for offence of cheque bounce committed under
the NI Act.
The decision rendered by the Hon’ble Supreme Court of India in
DashrathRupsinghRathod vs. State of Maharashtra &Anr. (2014)
9 SCC 129, which provided that the courts having jurisdiction
over the drawee bank would have exclusive jurisdiction to try
cases pertaining to cheque bounce, had caused much hardship
and inconvenience to the complainants thereby affecting the
general trade and commerce and diminishing the credibility of
cheque as a financial instrument.
Amendments introduced by the Ordinance
Jurisdiction to file Complaints pertaining to dishonour of
cheque;
Transfer of Pending cases;
Subsequent complaint against same drawer.
IN CASE OF ACCOUNT PAYEE CHEQUES
The offences shall be inquired and tried by the court exercising territorial jurisdiction over the branch of the payee’s bank, irrespective of the branch where he may present the cheque for clearance
‘A’ (drawer) draws an account payee cheque in favour of ‘B’ (payee). ‘B’ is having his account at ‘X’ bank (drawee bank) in New Delhi. The complaint for dishonor of the cheque shall be filed in New Delhi court exercising territorial jurisdiction over ‘X’ bank.
ILLUSTRATION
Jurisdiction to file Complaints pertaining to dishonour of cheque
IN CASE OF BEARERS CHEQUE
The offences shall be inquired and tried by the court within whose local jurisdiction, the branch of the drawee’s bankis situated.
‘A’ (drawer) draws a bearer cheque in favour of ‘B’ (payee). ‘A’ has his account at ‘X’ bank in Mumbai. The complaint by B against A can only be filed in Mumbai court which exercises jurisdiction over the bank ‘X’.
ILLUSTRATION
Jurisdiction to file Complaints pertaining to dishonour of cheque
All Cases
All cases arising out of section 138 of the NI Act, which were pending, filed or transferred to any court, before 15 June 2015 shall be transferred to the court having jurisdiction as per the Ordinance
If, on the date of the commencement of
the Ordinancemore than one casefiled by
thesame payeeagainst the same drawer
of cheques is pending before different
courts, upon the said fact having been
brought to the knowledge of the court,
the court shall transfer the case to the
court having jurisdiction as per the
Ordinance
Transfer of Pending cases‘Same Payee’ V/s‘Same Drawer’
Subsequent complaint against same drawer
Where a complaint has been filed against the drawer
of a cheque in the court having jurisdiction as per the
Ordinance, all subsequent complaints of cheque
bounce against the same drawer shall be filed
before the same court.
