A Bill seeking to prevent piling up of cheque bounce cases in various courts and help the payee in the case of default, was introduced in Lok Sabha today.
"To address the difficulties faced by the payee or the lender of the money in filing the case under Section 138, because of which large number of cases are stuck, the jurisdiction for offence... has been clearly defined," the Statement on Objects and Reasons of the Bill said.
If Parliament passes the Bill, then cases can only be filed in a court under whose jurisdiction the bank branch of the payee where the cheque is presented falls. While approving the amendment, the government had said it is aimed at fast tracking the resolution of cheque bounce cases while removing ambiguities on jurisdictional issues.
"The clarity on jurisdictional issue for trying cases of cheque bouncing would increase the credibility of the cheque as a financial instrument. This would help trade and commerce in general and allow lending institutions, including banks, to continue to extend financing to the economy, without the apprehension of the loan default on account of bouncing of a cheque," an official statement had said earlier.
Section 138 of the NI Act deals with the offence pertaining to dishonour of cheque for insufficiency of funds in the drawer's account. It also provides for penalties in case of dishonour of cheques. The amendments have been proposed in the backdrop of difficulties expressed by various stakeholders arising out of the recent legal interpretation of the place of jurisdiction for filing cases under the Section to be the place of drawers' bank by the Supreme Court.