The Cabinet on Wednesday approved an Ordinance to give relief to lakhs of payees, ordinary people as well as institutions, battling cheque-bounce cases far away from their place.
The Bill provides for filing of cases only in a court within whose local jurisdiction the bank branch of the payee — where the payee delivers the cheque for payment — is situated, the government said in a statement. Briefing reporters after a Cabinet meeting, transport minister Nitin Gadkari said the Supreme Court had passed a judgment that if a cheque was received from someone and it bounces, the jurisdiction for initiating action lies in the state where it was issued.
Gadkari said there were about 18 lakh such cases in various courts. The government had brought a Bill in this regard in Parliament on May 6 to amend the Negotiable Instruments Act, 1881, to settle the jurisdictional issue. While the Lok Sabha appoved the Bill on May 13, it could not be taken up in the Rajya Sabha. The Rajya Sabha was adjourned sine die on May 13.
The clarity on the jurisdictional issue for trying the cases of cheque bounce would increase the credibility of the cheque as a financial instrument. This would help trade and commerce in general and allow the lending institution.