Cheque Bouncing new rules

To tighten the noose around cheque bouncing case, i.e. Section 138 of the Negotiable Instruments Act, 1881govt is further planning to introduce new strict measures to bring creditability in payments by cheque.

It is very essential to bring credibility in whole payment system operating through cheques. In accounting parlance, the cheque is treated as cash, but in real terms, cheques are often issued in India very irresponsibly and many a times with the intention of not honouring it, leading to long time consuming litigation.

To curb this illegal practice, which hampers the image of India as an emerging global business hub, the plan is to introduce the following.

1. Dipping into other accounts of a cheque issuer .
2. Prohibition of opening of new accounts of offenders.
3. Treating cheque bounce as default of loan and thus reporting it to credit information companies for necessary downgrade of the score.
4. This will enforce cheque honouring by the payer with the matter going to court and compel him or her to make payment by creating deterrent through technology.

This will also promote ease of doing business and dissuade people from willfully indulging in issuance of cheques even though their accounts have insufficient funds. The Supreme Court had constituted a committee to suggest steps to be taken for early disposal of about 35 lakh pending cases across the country.

• Dr. Ajay Kummar Pandey
• ( LLM, MBA, (UK), PhD, AIMA, AFAI, PHD Chamber, ICTC, PCI, FCC, DFC, PPL, MNP, BNI,?ICJ (UK), WP, (UK), MLE,?Harvard?Square, London, CT, Blair Singer Institute, (USA), Dip. in International Crime, Leiden University, the Netherlands?)
• Advocate & Consultant, Supreme Court of India & High Courts
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