Promulgation of Negotiable Instruments ordinance gets nod

NEW DELHI: The Cabinet has approved promulgation of the Negotiable Instruments (Amendment) Ordinance, 2015.

Tribune News Service

New Delhi, September 16

The Cabinet has approved promulgation of the Negotiable Instruments (Amendment) Ordinance, 2015.

The Negotiable Instruments (Amendment) Bill, 2015, was introduced in Parliament in the Lok Sabha on May 6, 2015 and considered and passed by Lok Sabha on May 13. However, since the Rajya Sabha was adjourned sine die on the same day, the Bill could not be discussed and passed by that House and the Bill could not be enacted.

According to a Cabinet statement, the clarity on jurisdictional issues for trying cases of cheque bouncing would increase the credibility of the cheque as a financial instrument. This would help trade and commerce in general and allow the lending institution, including banks, to continue to extend financing to the economy, without the apprehension of loan default on account of bouncing of a cheque.

In view of the urgency to create a suitable legal framework for determination of the place of jurisdiction for trying cases of dishonour of cheques under Section 138 of the NI Act, the Government has decided to amend the law through the Negotiable Instruments (Amendment) Ordinance, 2015.

The objective is to ensure that a fair trial is conducted keeping in view the interests of the complainant by clarifying the territorial jurisdiction for trying the cases for dishonouring of cheques.

The Ordinance is similar to the Bill in the sense that the substantive principle for determination of the jurisdiction of cases under Section 138 of the NI Act remains the same, except that two distinct situations of payment of cheque are covered under the Ordinance.

The Bill provides for filing of cases only by a court within whose local jurisdiction the bank branch of the payee, where the payee delivers the cheque for payment is situated.

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