The clarity on jurisdictional issue for trying cases of cheque bouncing would increase the credibility of the cheque as a financial instrument, the government said.
"This would help trade and commerce in general and allow lending institutions, including banks, to continue to extend financing to the economy, without the apprehension of the loan default on account of bouncing of a cheque," the official statement said.
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The Negotiable instruments (Amendment) Bill, 2015 will be pursued in the ongoing session of Parliament.
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The main amendment included is the stipulation that the offence of rejection/return of cheque "will be enquired into and tried only by a court" within whose local jurisdiction the bank branch of the payee, where the payee presents the cheque for payment is situated.
Section 138 of the NI Act deals with the offence pertaining to dishonour of cheque for insufficiency of funds in the drawer's account. It also provides for penalties in case of dishonour of cheques.
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