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203:. On the recommendation of the new Law Commission, the Bill was re-drafted and again it was sent to a Select Committee which adopted most of the additions recommended by the new Law Commission. The draft thus prepared for the fourth time was introduced in the council and was passed into law in 1881 being the Negotiable Instruments Act, 1881 (Act No.26 of 1881).
210:. Their use was most widespread in the twelfth century and has continued till today. In a sense, they represent the oldest surviving form of credit instrument. These were used in trade and credit transactions; they were used as remittance instruments for the purpose of transfer of funds from one place to another. In Modern era
233:, Section 21, or affects any local usage relating to any instrument in an oriental language. Provided that such usages may be excluded by any words in the body of the instrument, which indicate an intention that the legal relations of the parties thereto shall be governed by this Act; and it shall come.
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With the insertion of these provisions in the Act the situation has improved and the instances of dishonour have relatively come down but on account of application of different interpretative techniques by different High Courts on different provisions of the Act it further compounded and complicated
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In June 2020, the
Finance Ministry in the Government of India proposed the decriminalisation of a number of white-collar crimes, including cheque bouncing under Section 138 of the Negotiable Instruments Act, in order to improve the ease of doing business as well as to reduce imprisonment rates. The
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and introduced in
December 1867 in the council and it was referred to a Select Committee. Objections were raised by the mercantile community to the numerous deviations from the English Law in which it contained. The Bill had to be redrafted in 1877. After the lapse of a sufficient period for
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and remedy against the defaulters of the
Negotiable Instrument a criminal remedy of penalty was inserted in Negotiable Instruments Act, 1881 by amending it with Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 (insertion of chapter XVII).
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criticism by the Local
Governments, the High Courts and the chambers of commerce, the Bill was revised by a Select Committee. In spite of this Bill could not reach the final stage. In 1880 by the Order of the Secretary of State, the Bill had to be referred to a new
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Parliament enacted the
Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 (55 of 2002), which is intended to plug the loopholes. This amendment Act inserts five new sections from 143 to 147 touching various limbs of the parent Act and
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rather than carrying the currency worth the cheque's value. Before 1988 there was no provision to restrain a person issuing the a cheque without having sufficient funds in their account, although for a
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means a promissory note, bill of exchange or cheque payable either to order or to bearer." But in
Section 1, it is also described the
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An Act to define and amend the law relating to negotiable instruments which are
Promissory Notes, Bills of Exchange and cheques
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710:"Statement of Reasons- Decriminalization of Minor Offences for Improving Business Sentiment and Unclogging Court Processes"
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and
Finance Industry Development Council (FIDC), and the Federation of Industrial and Commercial Organisation (FICO).
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The history of the present Act is a long one. The Act was originally drafted in 1866 by the 3rd
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through digitally were also included and the amendment Act was into force on 6 February 2003.
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Penalties in Case of
Dishonour of Certain Cheques for Insufficiency of Funds in the Accounts
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Banking, Public
Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988
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Ministry of Finance, Government of India, Department of Economic Affairs (12 June 2020).
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proposal has been opposed by a number of trade and business associations, including the
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The Act comprises 148 sections classified into 17 chapters and they are as follows:
742:"Decriminalising bounced cheques will nullify their sanctity, says CAIT to Fin Min"
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793:"FICO opposes finance ministry's proposal to decriminalise cheque bounce offences"
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the situation although on dishonour of cheques the trends of the verdicts of the
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The most important class of Credit Instruments that evolved in India were termed
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768:"Banks oppose Finance Ministry move to decriminalise cheque-bounce offence"
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It extends to the whole of India but nothing herein contained affects the
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Local extent, Saving of usage relating to hundis, etc. and Commencement.
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Types of negotiable instruments recognised and governed by the Act
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Acceptance and Payment for Honour and Reference in Case of Need
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According to Section 13 of the Negotiable Instruments Act, "A
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in India. The word "negotiable" means transferable and an "
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Discharge from Liability of Notes, Bills and Cheques
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a civil liability would accrue. In order to ensure
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299:Contents
296:Sections
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127:Commenced
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67:Citation
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575:. 1958.
190:History
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