kartik mago 27 Feb 2019


On January 2, 2018, the Finance Minister proposed The Negotiable Instruments (Amendment) Bill before the Lok Sabha. The president of India agreed to this amendment and was notified in the Official Gazette on 02.08.2018 to become an Act called the Negotiable Instruments (Amendment) Act, 2018 (No. 20 of 2018).

The Amendment was done to meet the following aim:

  1. Reducing the undue delay in the cheque dishonor cases and,
  2. Provision for payment of interim compensation to the complainants.

 The main object of amendment was to ease the dealings of the business.

The Statement of Objects and Reasons of the Negotiable Instruments (Amendment) Bill is produced herein below:

"The Central Government has been receiving several representations from the  public including trading community relating to pendency of cheque dishonour cases. This is because of delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on   proceedings"


 143A and 148, 2 new sections have been proposed to be included under the Negotiable Instruments Act, 1881 via the Amendment Act:



It gives the Court power to order the drawer of the cheque to pay Interim Compensation to the complainant:

  1. In case of a summary trial or a summons case, where the drawer pleads not guilty to the allegations made in the complaint, and
  2. In any other case, upon framing of the charges.


Quantum of Compensation

The amount of compensation which can be awarded shall not exceed 20 percent of the total cheque amount.

On Acquittal

There may arise certain situations in which the drawer is acquitted and payee is directed to refund the entire amount of interim compensation. Such refund will be in addition to the RBI's Prevailing interest rate.

Time Frame

The intermediate compensation will have to be paid within 60 days from the date of the order by the court. This period is extendable to 30 days. Extension will be granted only when the applicant is successful in satisfying the Court that he had genuine reasons for the delay.



Section 148 was inserted in the Negotiable Instrument Act to give power to the Appellate Court for ordering payment pending the appeal against conviction under Section 138 of the Negotiable Instruments Act.

Another power conferred upon the Appellate Court is that it may order the appellant to deposit an amount which shall be a minimum of 20% of the fine or compensation awarded by the trial Court. This amount shall be in addition to the amount already paid by the appellant under Section 143A. This deposit may be released by an order for payment to the complainant at anytime during the pendency of the appeal.

On Acquittal

In situation where the appellate is acquitted, the complainant will be directed by the Court to refund the entire deposit amount along with the RBI's prevailing interest rate to the appellant.

Time Frame

The deposit will have to be made within 60 days from the date of the order by the court. . Extension will be granted only when the applicant is successful in satisfying the Court that he had genuine reasons for the delay.



The Amendment Act comes as a relief for the Payee of the Cheque, who has to spend a significant amount of time and energy in the court to recover the money due to him in a Cheque bounce case. Of late the recovery provisions have been strengthened so that business community is relieved and safeguarded from undue hardship.

Did you find this write up useful? YES 10 NO 0
Ramesh Muthuraj   7 Oct 2023 7:27pm
It's very useful
Rajesh Khanna   17 Aug 2021 5:20pm
I want to know how helpful NI Act would be while recovering the bounced chq amount
SIMON AJAY KUMAR   6 Feb 2021 8:51am
Nice Article

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