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Cheque Bouncing amendment in Cheque Dishonor cases.

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  • Cheque Bouncing amendment in Cheque Dishonor cases.

    The Govt. of India has finally announced the much awaited amendment in Cheque Dishonor cases. The Hon'ble President of India, on 15th June, 2015 promulgated through an Ordinance an amendment in the Negotiable Instrument Act, 1881. For the sake of understanding, we summarized the effect of the same as below:

    With effect from the above said Amendment now a person who has received a Cheque from a debtor, can file a Criminal Complaint u/s 138 of NIA, 1881, against the drawer of the cheque with the Court within the jurisdiction of which the Drawee bank is situated.

    Before this amendment as per the Judgment of the Hon'ble Supreme Court, one has to file the case with the Court where the drawer bank was situated. (Darshrath Rupsingh Rathod Vs. State of Maharashtra & Anrs.). After this judgment, there was a lot of unrest among business circles and legal fraternity.

    For Example:
    Let us presume, Mr. X has drawn a Cheque in Chennai in favour of Mr. Y doing business in Delhi, in respect of any Liability. If Mr. Y deposits the cheque with his banker situated in Delhi and the cheque gets bounced, then now, as per the amendment Mr. Y can file the Criminal Complaint u/s 138 in Delhi. Earlier Mr. Y has to go to Chennai to file the Complaint.

    This amendment is really welcome in the interest of business circle and there will be apprehension in the minds of the unscrupulous persons to get their cheques bounced.
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