Today, on 16 September 2015, the Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has given its approval for the proposal to promulgate the Negotiable Instruments (Amendment) Ordinance, 2015. It is pertinent to mention that previously on 15 June 2015, the Negotiable Instruments (Amendment) Ordinance, 2015, was passed, which lapsed on 31 August 2015. I had mentioned in detail the consequences of lapsing of Negotiable Instruments (Amendment) Ordinance 2015 which led to uncertainty of territorial jurisdiction in cheque bounce cases. Now, after a gap of about 2 weeks, the Government of India has again approved promulgation of Negotiable Instruments (Amendment) Ordinance, 2015. This will have to be formally approved by the President of India and thereafter it will be published in the official gazette. At the time of this writing, the new Ordinance was yet to be published in the official gazette. In view of this, it is still not clear as to whether this new Ordinance will be a mere reproduction of the previous Ordinance that was promulgated on 15 June 2015 or there are some further changes (which may lead to further confusion to the confusion already existing as pointed out in my above article).
[Update (23 September 2015): Negotiable Instruments (Amendment) Second Ordinance issued on 22 September for cheque dishonour jurisdiction.]
A press release issued by the Press Information Bureau after the cabinet meeting shows that the new Ordinance is focused on clarifying the jurisdiction related issues for filing cases for offence committed under section 138 of the NI Act, which also was the subject matter of the previous Ordinance of 15 June 2015.
However, there appear to be certain errors in the said press release, since it appears to have been mechanically copied from the previous press release issued at the time of the previous Ordinance, forgetting that there are certain changes on the ground after the last Ordinance (e.g., passing of the a new Amendment Bill on 6th August by Lok Sabha). Press release still refers to passing of an Amendment Bill in May 2015, when in fact that Bill was subsequently withdrawn. Mechanical copying of the previous press release has apparently led to these errors; due to which one will have to wait for the new Ordinance becoming available in public domain, before commenting on its contents.
The Government has stated that 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.
It has been clarified that 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. Further, where a complaint has been filed against the drawer of a cheque in the court having jurisdiction under the new scheme of jurisdiction, all subsequent complaints arising out of section 138 against the same drawer shall be filed before the same court, irrespective of whether those cheques were presented for payment within the territorial jurisdiction of that court. Further, it has been provided that if more than one prosecution is filed against the same drawer of cheques before different courts, upon this fact having been brought to the notice of the court, the court shall transfer the case to the court having jurisdiction as per the new scheme of jurisdiction.
As and when the new Ordinance is promulgated, Tilak Marg will inform you; so, please keep checking these columns for the latest updates.
Also see, our other articles on cheque bounce cases:
- Lapsing of Negotiable Instruments (Amendment) Ordinance 2015 causes uncertainty in cheque bounce cases
- Jurisdiction in cheque bouncing cases is changed by new Ordinance, superseding SC judgment
- Dishonour of post-dated cheque given for Advance is not offence under S. 138 of Negotiable Instruments Act
- Jurisdiction for “at par” cheque dishonour – SLP against Bombay High Court decision dismissed by Supreme Court.
- Jurisdiction in a case of cheque bouncing – back to square one.
- Cheque bounce cases under Section 138 Negotiable Instruments Act Explained.
- Complete list of reasons for which a cheque can be returned unpaid by a bank.
- Reversal of transaction by bank of depositing cheque proceeds
- Burden of proof of service of notice in cheque dishonour case, what if accused avoiding service?
- Cheque dishonour under Section 138 N.I. Act when cheque presented multiple times in bank
- Dishonour of cheque given as security – whether offence under Section 138 N.I. Act made out?
- Cheque bouncing under S. 138 N.I. Act where cheque amount is more than liability
- Cheque dishonour jurisdiction – bank account in Delhi, cheque presented in Bangalore
