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Rajya Sabha: Interim Compensation of 20% Soon to Be in Effect

Bounced cheques will now get some relief as Rajya Sabha will soon announce the Interim Compensation Bill in effect, providing 20% of the cheque amount and a solution to many cases of dishonoured cheques. Read about how the legislative process of amendment under the Negotiable Instruments Act is now complete.
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The new Negotiable Instruments Amendment Bill provides interim compensation to the complainant up to 20% of the cheque amount.

The Negotiable Instruments (Amendment) Bill has been passed by the Rajya Sabha on Thursday. However, the bill was already passed on July 23, 2018, by the Lok Sabha, but a new provision to the Section 143A has been introduced in the amendment that gives the court power to order payment by the Drawer of the cheque to the Complainant of interim compensation.

In cases of summary trial or summons, where the accused does not plead guilty, interim compensation can be ordered by not exceeding 20% of the cheque amount. The new amendment is introduced with a view to resolving the issue of undue delay caused in case of dishonoured cheques. This new step would surely save time and money that goes into unnecessary litigation.

 As per the new provision, a period of 60 days has been fixed to pay interim compensation from the date of order. The provision provides other ways as well, by which the amount of compensation can be recovered. According to Section 138 of the Negotiable Instruments Act, dishonour of cheque is a criminal offence and is punishable with fine and imprisonment. The disputed amount can also be recovered assuming it as a fine mentioned under Section 421 of the Code of Criminal Procedure. More to this, the amount has to be returned to the complainant along with the rate of interest as prescribed by the Reserve Bank of India.

According to the Minister of State for Finance, Shiva Pratap Shukla, the amendment will help in reducing the delay in such cases. Whereas, the bill was opposed by CPI (M) MP, A. Sampath who termed it as “unconstitutional” and also referred the bill as “a bill for money launders”. Whereas, MP Shashi Tharoor supported the bill and also shared his view about the bill that it should have contained the provisions to enable “Trial in Absentia”.

Section 148A is newly introduced in the Act and this provision gives power to the appellate courts to get the 20% of the amount deposited by the drawer against the conviction. A period of 60 days has been fixed to pay the interim compensation as well. In cases, where the appeal is allowed, the amount of compensation has to be returned to the accused.

With the new bill of interim compensation passed by Rajya Sabha, the initial legislative process of amendment is now complete. The only thing left now is the notification of amendment by the Central Government in the Official Gazette, after which the bill will immediately take effect.

 

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Reviewed by:
Jyoti Yadav
Published on 30-Jul-2018
1,231 views