The Negotiable Instruments (Amendment) Ordinance, 2015

On 15.06.2015, the President of India promulgated the Negotiable Instruments (Amendment) Ordinance, 2015. The objective of the Ordinance is to amend the provisions of Negotiable Instruments Act, 1881, for speedy disposal of cases relating to dishonour of cheque. The Negotiable Instruments (Amendment) Bill, 2015 has been passed by the Lok Sabha, however it is still pending in the Rajya Sabha. Whereas, the Parliament is not in Session, the President on the satisfaction that the circumstances exist which renders is necessary for him to take immediate action, promulgated the said Ordinance.

 The Ordinance provides as follows:

• Substitutes Section 6, Explanation I, clause (a) with following clause:

‘‘a cheque in the electronic form” means a cheque drawn in electronic  medium by using any computer resource and signed in a secure system with digital signature (with or without biometrics signature) and asymmetric cryptosystem or electronic signature, as the case may be;

• Inserts Explanation III after Explanation II as “the expressions used in this section shall have the same meanings as assigned to those expressions in the Information Technology Act, 2000”;

• Inserts Section 142 (2) which provides that the offence under Section 138 shall be inquired into and tried only by a court within whose local jurisdiction —  (a) the branch of the bank where the payee or holder in due course maintains the account, is situated, if the cheque is delivered for collection through an account.  (b) the branch of the drawee bank where the drawee maintains the account, is situated, if the cheque is presented for payment by the payee or holder in due course otherwise through an account. 

• Inserts a new Section 142 A, which provides for Validation for transfer of pending cases, “(1); Notwithstanding anything contained in the Code of Criminal Procedure, 1973 or any judgment, decree, order or directions of any court, all cases arising out of Section 138 which were pending in any court, whether filed before it, or transferred to it, before the commencement of the Negotiable Instruments (Amendment) Act, 2015, shall be transferred to the court having jurisdiction under sub-section (2) of section 142 as if that sub-section had been in force at all material times.                      (2) Notwithstanding anything contained in sub-section (2) of section 142 or sub-section (1), where the payee or the holder in due course, as the case may be, has filed a complaint against the drawer of a cheque in the court having jurisdiction under sub-section (2) of section 142 or the case has been transferred to that court under sub-section (1), and such complaint is pending in that court, all subsequent complaints arising out of section 138 against the same drawer shall be filed before the same court irrespective of whether those cheques were delivered for collection or presented for payment within the territorial jurisdiction of that court.                                                                             (3) If, on the date of the commencement of the Negotiable Instruments (Amendment) Ordinance, 2015, more than one prosecution filed by the same payee or holder in due course, as the case may be, against the same drawer of cheques is pending before different courts, upon the said fact having been brought to the notice of the court, such court shall transfer the case to the court having jurisdiction under sub-section (2) of section 142 before which the first case was filed and is pending, as if that sub-section had been in force at all material times.”

-Ministry of Law & Justice