The Negotiable Instruments (amendment) Bill,

2015 Notified
January 6, 2016
The Negotiable Instruments (Amendment) Bill, 2015 was
passed by the Parliament in the recently concluded Winter
Session of the Parliament.
The
provisions
of
the
Negotiable
Instruments
(Amendment) Act, 2015 shall be deemed to have come
into force on the 15th Day of June, 2015, the day on which
the Negotiable Instruments (Amendment) Ordinance, 2015
was promulgated to further amend the Negotiable
Instruments Act, 1881.
The Negotiable Instruments Act, 1881 was enacted to
define and amend the law relating to Promissory Notes,
Bills of Exchange and Cheques.
The object of the Negotiable Instruments Act, 1881 is to
encourage the usage of cheque and enhance the
credibility of the instrument so that the normal business
transactions and settlement of liabilities could be ensured.
Section 138 of the Negotiable Instruments Act, 1881 deals
with the offence pertaining to dishonor of cheque, drawn
for discharge of any debt or other liability, on account of
insufficiency of funds in the drawers account or on
account of the fact that the cheque amount is more than
the amount agreed to be paid by the bank, and provides
for penalties for such dishonour.
About The Bill
The Negotiable Instruments (Amendment) Act, 2015 is
focused on clarifying the jurisdiction related issues for
filing cases for offence committed under section 138 of
the Negotiable Instruments Act, 1881.
The Negotiable Instruments (Amendment) Act, 2015,
facilitates filing of cases only in a court within whose local
jurisdiction the bank branch of the payee, where the

payee delivers the cheque for payment through his

account, is situated, except in case of bearer cheques,
which are presented to the branch of the drawee bank and
in that case the local court of that branch would get
jurisdiction.
The Negotiable Instruments (Amendment) Act, 2015
provides for retrospective validation for the new scheme
of determining the jurisdiction of a court to try a case
under section 138 of the Negotiable Instruments Act,
1881.
The Negotiable Instruments (Amendment) Act, 2015 also
mandates centralisation of cases against the same drawer.
The clarification of jurisdictional issues may be desirable
from the equity point of view as this would be in the
interests of the complainant and would also ensure a fair
trial.
Further, the clarity on jurisdictional issue for trying the
cases of cheque bouncing would increase the credibility of
the cheque as a financial instrument.
This is expected to help the trade and commerce in
general and allow the lending institutions, including banks,
to continue to extend financing to the productive sectors
of economy, as the process of pursuing the cheque
bouncing cases relating to loan default has been made
simpler and efficient through the proposed amendments
to the Negotiable Instruments Act, 1881.