Friday, 10 August 2018

Good legal article on Negotiable Instruments (Amendment) Act, 2018’

With the latest ‘The Negotiable Instruments (Amendment) Act, 2018’ being notified on 02-08-2018.

The following amendments have been made —

With respect to the Section 143 — now introduces a new proviso 143A, giving power to a Court to try an offence under S. 138 to order the drawer of cheque to pay interim compensation to the complainant in summary trials/summons case where he pleads not guilty to the accusations in the complaint. Furthermore, the interim compensation shall not exceed 20 % of amount of the cheque and shall be payable within 60 days from date of the order.

Recovery of fine shall be same as under Section 421 of the Code of Criminal Procedure, 1973.
In cases of acquittal, the Court is now empowered to direct the complainant to repay to the appellant the amount so released, at interest rates as prescribed by RBI.

Section 148 — now empowers the appellate court, for appeals against conviction under S. 138, to direct the appellant to deposit a minimum 20 % of the fine/compensation awarded, in addition to interim compensation paid under S. 143A.


  • Section 143A has been inserted which essentially empowers the court trying the offence under Section 138 of the Act, to direct the drawer of the cheque to pay interim compensation to the Payee in situations of a summary trial or summons case wherein the drawer pleads to be "not guilty". This new provision seeks to cap interim compensation to 20% of the cheque amount.
  • Another provision introduced as Section 148 specifies that in case the drawer files an appeal against his/her conviction, the Appellate court has the power to direct the drawer to deposit a minimum amount of 20% of the fine or compensation that was awarded by the Trial court. The Appellate Court may direct to release the amount deposited by the appellant to the complainant at any time during the pendency of the appeal. This amount shall be in addition to the compensation paid at the trial stage.
  • The interim compensation at the trial as well as the deposit amount at the appellate stage (as the case may be) shall be paid within 60 days from the date of the order by the court trying the offence or the appeal. The concerned court may further extend this period by an additional time of 30 days' subject to the sufficient reasons being shown.
  • In case of acquittal of the drawer/ appellant by the Trial Court or the Appellate Court, (as the case may be) the payee/complainant shall be directed to repay the interim compensation or amount deposited (as maybe applicable), to the drawer/appellant along with such interest as may be fixed by Reserve Bank of India at the beginning of the relevant financial year. This amount shall be repaid within 60 days of the court's order and this period may be further extended by another 30 days' subject to sufficient reasons being shown.
  • The amount of fine imposed under section 138 or the amount of compensation awarded under section 357 of the Code of Criminal Procedure, 1973, shall be reduced by the amount paid or recovered as interim compensation under this section.’’.

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