The government is likely to introduce long-pending amendments to the Negotiable Instruments Act, 1881, in the next session of Parliament as part of steps being taken to unclog the huge backlog of cheque-bouncing cases in the country's courts. The amendment bill proposes the use of alternative ways to resolve disputes, lays down the procedure to be followed in such cases and suggests making electronic transactions free of cost to promote their use.
"The department of financial services has finalised these amendments and the bill is expected to come up in Parliament in the next session," said a senior law ministry official.
The matter was brought to the notice of the law minister in the advisory council meeting on August 26, he added. The Negotiable Instruments Act was amended in 2002 to make cheque bouncing a criminal offence. The proposed amendments could help to reduce the pendency of cheque-bouncing cases under section 138 of the act, which provides for prosecution.
The amendments have been framed on the basis of suggestions made by an inter-ministerial group set up in 2012 to look into policy and legislative changes to curb the increasing number of cheque-bouncing cases. As per government data, more than 3.8 million cheque-bouncing cases have been pending in various courts as of 2011.
Once the changes in the act are effected, all such cases will have to be decided through an alternative dispute resolution mechanism — arbitration, conciliation or settlement. The department of financial services has also finalised a procedure to deal with cheque bounce cases, said the official. The proposal to amend the act was first moved by the law ministry in 2011 as a part of a pendency reduction drive. Early this year, the Supreme Court issued guidelines for the speedy disposal of cheque bounce cases.
"The department of financial services has finalised these amendments and the bill is expected to come up in Parliament in the next session," said a senior law ministry official.
The matter was brought to the notice of the law minister in the advisory council meeting on August 26, he added. The Negotiable Instruments Act was amended in 2002 to make cheque bouncing a criminal offence. The proposed amendments could help to reduce the pendency of cheque-bouncing cases under section 138 of the act, which provides for prosecution.
The amendments have been framed on the basis of suggestions made by an inter-ministerial group set up in 2012 to look into policy and legislative changes to curb the increasing number of cheque-bouncing cases. As per government data, more than 3.8 million cheque-bouncing cases have been pending in various courts as of 2011.
Once the changes in the act are effected, all such cases will have to be decided through an alternative dispute resolution mechanism — arbitration, conciliation or settlement. The department of financial services has also finalised a procedure to deal with cheque bounce cases, said the official. The proposal to amend the act was first moved by the law ministry in 2011 as a part of a pendency reduction drive. Early this year, the Supreme Court issued guidelines for the speedy disposal of cheque bounce cases.
Source:-The Economic Times
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