Accused in cheque bouncing case to pay 20% compensation on institution of complaint

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A bill titled “The Negotiable Instruments (Amendment) Bill, 2017” has been introduced before the Lok Sabha by Shri Arun Jaitley, Minister of Finance and Corporate Affairs on 2nd January 2018 to amend the Negotiable Instruments Act, 1881 and its provisions relating to the trial in a cheque bouncing case under Section 138 Negotiable Instruments Act.

The bill proposes to insert two new sections 143A and 148. The purpose of the said amendment is to safeguard the position of the complainant in such cases as there is a huge amount of pendency in the courts because of easy appeals that can be filed, and a stay order can be sought for the proceedings.

Thus, the said amendment seeks to safeguard the position of the complainant, whereby, by the new proposed Section 143A, the court may order the drawer to pay compensation not exceeding 20% to the complainant in case of a summary trial or summons case, where the drawer does not plead guilty to the offence and in any other case, upon framing of the charges. Such compensation has to be paid by the drawer within 60 days of such order. If the drawee / accused has been acquitted, then the complainant has to return back the compensation that he had received along with the prevalent bank interest as per the RBI. Such compensation is further to be treated as a fine under Section 421 Cr.P.C.

The second section that is proposed to be inserted is Section 148, whereby, if the drawer / accused is convicted and he wishes to prefer an appeal to the Higher Court, then the Appellate Court may order the appellant (convicted drawer of the cheque) to pay a compensation of minimum 20% to the complainant within 60 days of such order. This compensation would be in addition to any interim compensation paid under the proposed section 143A. If, the appellant wins the appeal and is acquitted, then the court may order the complainant to pay the whole amount of compensation along with the bank rate of interest as decided by the RBI within 60 days.

The proposed Sections are as follows:

‘‘143A Power to direct interim compensation.

(1)Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant—

(a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and

(b) in any other case, upon framing of charge.

(2) The interim compensation under sub-section (1) shall not exceed twenty per cent of the amount of the cheque.

(3) The interim compensation shall be paid within sixty days from the date of the order under sub-section (1), or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the drawer of the cheque.

(4) If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.

(5) The interim compensation payable under this section may be recovered as if it were a fine under section 421 of the Code of Criminal Procedure, 1973.

(6) The amount of fine imposed under section 138 or the amount of compensation awarded under section 357 of the Code of Criminal Procedure, 1973, shall be reduced by the amount paid or recovered as interim compensation under this section.’’.

 

‘‘148. Power of Appellate Court to order payment pending appeal against conviction.

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, in an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent. of the fine or compensation awarded by the trial Court:

Provided that the amount payable under this sub-section shall be in addition to any interim compensation paid by the appellant under section 143A.

(2) The amount referred to in sub-section (1) shall be deposited within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the appellant.

(3) The Appellate Court may direct the release of the amount deposited by the appellant to the complainant at any time during the pendency of the appeal:

Provided that if the appellant is acquitted, the Court shall direct the complainant to repay to the appellant the amount so released, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.’’.

Click here to read The Negotiable Instruments (Amendment) Bill, 2017.

About Alabhya Dhamija

Alabhya is an Advocate practicing at Delhi High Court and other courts in Delhi. Contact: alabhya@dhamija.com

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