Dishonoured cheque may send you to jail

Under the proposed Negotiable Instruments Act, as soon as a case is filed in the court, a time period would be given to both parties to settle the cases out of court, failing which the defaulter would

Published: 11th June 2017 08:20 AM  |   Last Updated: 11th June 2017 09:48 AM   |  A+A-

NEW DELHI:   Paying someone through cheque without having enough money in the bank may bounce you to jail soon. The government is likely to amend the present law of punishment, making it a non-bailable offence for defaulters.

The Ministry of Law and Justice is planning to present the amendment bill—aimed to cut down the pendency of nearly 20 lakh cheque bounce cases in India—in the Monsoon Session of Parliament.

Under the proposed Negotiable Instruments Act, as soon as a case is filed in the court, a time period would be given to both parties to settle the cases out of court, failing which the defaulter would be sent to jail, and strict conditions would be imposed while giving bail.The new law will also have a condition for the defaulting party to defend himself only when he deposits the amount in the court.


Also, Metropolitan Magistrate will first examine the complaint filed under Section 138 of the NI Act alongwith the affidavit and supported documents, and it is only after its scrutiny, the court will take cognizance and direct issuance of summons.

Though the government and courts are disposing the cases via holding special lok adalats at national and district levels, the pendency is still on a higher side. At present, cheque bounce is a bailable offence with an imprisonment of up to two years or fine that may extend up to double the dishonoured amount, or both can be sentenced by the courts.


“We have finalised all amendments and now working on little modalities as suggested by various stakeholders and most likely we will introduce the same in the upcoming session of Parliament,” said a law ministry official, adding this measure will also promote cashless transactions, curbing circulation of notes in the market.

Last year, the government had amended the NI Act and allowed filing of cases in a court at a place where the cheque is presented for clearance and not at the place of issue. This was done in pursuance of the 2014 apex court ruling that makes it clear that territorial jurisdiction for bounced cheques is restricted to the court within whose jurisdiction the offence was committed.

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