Amendment to Negotiable Instruments Act

Government of India has amended Negotiable Instruments Act which has received asset of President of India on 2nd August 2018:

In brief the amendments are as under:

Interim Compensation:

Section 143A: The complaints which are being tried as offence under section 138 of by courts under Code of Criminal Procedure, the court may order the drawer to pay interim compensation not exceeding  20% of the cheque amount, where drawer plead not guilty and in any other case, upon framing of charge.

Period of payment of interim compensation:

The interim compensation shall be paid within 60 days from date of order or within such further period not exceeding 30 days as directed by court on sufficient cause.

In view of said amendment, the drawer can seek 90 days period on sufficient grounds to the satisfaction of court to pay interim compensation not exceeding 20% of the cheques amount.

Repayment of interim compensation on acquittal:

If drawer is acquitted, court shall direct the complainant to repay the amount of interim compensation with interest at the bank rate within 60 days from the date of order or within further period not exceeding 30 days. The interim compensation may be recovered from drawee as fine.

The amount of fine or compensation shall be reduced.

Another section 148 has been inserted as Under:

Appeal against conviction:

If after conviction the drawer file appeal , the appellate court may order to deposit minimum 20% in addition to the amount deposited before trail court  as interim compensation under section 143A.

Period of payment of  Additional interim compensation:

The interim compensation shall be paid within 60 days from date of order or within such further period not exceeding 30 days as directed by court on sufficient cause.

Release of amount:

During pendency of appeal , the court may release the said amount to complainant.

Repayment of Release of amount on acquittal in Appeal:

If in appeal, the drawer is acquitted , court shall direct the complainant to repay the amount of interim compensation with interest at the bank rate within 60 days from the  date of order or within further period not exceeding 30 days .

Opinion:

In view of said amendment , the complainant can get 20% interim compensation at the time of commencement of trial besides cheque amount on conviction but the amendment is silent in respect of the punishment as provided in Section 138 of the Act. The above amendment is immediate relief to the complainant i.e holder of cheque.

If the drawer is acquitted then the complainant has to repay the said interim compensation amount with interest at the bank rate.

If the drawer is convicted and he has filed appeal, the appellate court may direct further to pay 20% interim compensation to the complainant and if the drawer acquitted then the complainant has to repay the said interim compensation amount but the amendment is silent in respect of the repayment of amount of interim compensation which was paid before the Trail court.

In my opinion there are lapses in the amendment.