If there are three cases of bounced cheque against one person, then all these cases can be brought in one place and clubbed.
In a huge relief to lakhs of victims of cheque-bouncing cases, the Union cabinet has amended the Negotiable Instruments (NI) Act to help complainants pursue legal action against the defaulters more effectively.
Citizens filing a case under Section 138 of NI Act, which deals with dishonour of cheques for want of funds, will no longer be required to approach a court within whose jurisdiction the drawer's bank falls. As per the amendment, which was approved on June 15, a person can move a court that has jurisdiction over the bank branch where the cheque was presented for clearance.
For instance, if a Mumbaikar presents a cheque drawn in Kolkata to a bank near his home and the instrument is dishonoured, s/he can now approach a city court instead of filing a case in Kolkata.
Also, if there are three cases of bounced cheque against one person, then all these cases can be brought in one place and clubbed, provides the amendment.
Earlier, a case under Section 138 could be initiated by the holder of the cheque at his place of business or residence. Later on, there were multiple conflicting orders of lower and high courts in the country relating to the jurisdiction issue of filing of the cheque bounce cases.
Some said that it had to be filed in the court where the bank of the drawer of the cheque is located. Others differed and said that it had to be filed in a court where the drawee or the victim of the cheque bounce resides.
The matter reached the Supreme Court. A three-judge bench of justices TS Thakur, Vikramjit Sen and C Nagappan ruled that the case has to be initiated at the place where the branch of the bank on which the cheque was drawn is located.
Aggrieved by this SC order, several persons had written letters to the central Law Ministry saying that this would amount to harassment of the victims of cheque bounce cases.
Among them was Borivli resident J P Vaghani, who had written to the law minister in March saying that the SC ruling was a harassment to complainants and "facilitates accused for dishonoring of cheques".
A release issued by the law ministry said that action will be initiated to introduce the Negotiable Instruments (Amendment) Bill, 2015 in Parliament in the second phase of the current session.
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