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Assignment ON NEGOTIABLE INSTRUMENTS ACT

This document contains an assignment for a certificate course on the Negotiable Instruments Act. It includes 5 analytical questions to be answered in 200 words or less. The questions cover topics such as measures to make Section 138 enforcement more effective and speedy, courts with jurisdiction for Section 138 complaints, definitions of various types of checks, and amendments to the Negotiable Instruments Act in 2015 and 2018.

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19016 PUSHPENDRA SHARMA
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298 views4 pages

Assignment ON NEGOTIABLE INSTRUMENTS ACT

This document contains an assignment for a certificate course on the Negotiable Instruments Act. It includes 5 analytical questions to be answered in 200 words or less. The questions cover topics such as measures to make Section 138 enforcement more effective and speedy, courts with jurisdiction for Section 138 complaints, definitions of various types of checks, and amendments to the Negotiable Instruments Act in 2015 and 2018.

Uploaded by

19016 PUSHPENDRA SHARMA
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CERTIFICATE COURSE ON NEGOTIABLE INSTRUMENTS

ACT

ASSIGNMENT

Name : -Pushpendra Sharma

Email ID :- pushpendrasharma@rgnul.ac.in

Contact no. – 7300252667

Negotiable Instruments Act (ASSIGNMENT)


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ANALYTICAL QUESTIONS [Within 200 Words]

10 Marks Each
1. What measures shall be taken to make the enforcement of Section 138 of the
Negotiable Instruments Act more effective and speedier, looking at the present
growing concern for the same?

Ans. 1 As we trace the history and establishment of the Negotiable Instruments Act,1881 and
focus on the jurisdictional debate under Section 138, which deals with dishonor of cheques,
we analyse the necessities which forced the Courts and the Government to adopt landmark
changes in the law. The latest change and the present prevalent law being the 2015
Ordinance, has the effect of nullifying the law as laid down by the Supreme Court in 2014,
DasratRathod case. The legal effect of the Ordinance is that, so as to institute a complaint
under Section 138, the same must be instituted as per : If the cheque is delivered for
collection through an account, the branch of the bank where the payee or holder, maintains
the account, is situated; or If the cheque is presented for payment by the payee or holder
otherwise through his account, the branch of the drawee bank where the drawer maintains the
account, is situated. This law comes with a promise to solve and aid in not only the speedy
disposal of the pending cases pertaining to complaints under 138, but also to bring a sanctity
to the system by seeking to clamp down on defaults in payments. It clarifies the legal position
as to jurisdiction and also seeks to keep up with the modern banking system.

2. Which Courts have jurisdiction to entertain complaints under Section 138 of the
Negotiable Instruments Act ? Explain with reference to landmark case/cases?

Ans.2 The Act is silent on the matter pertaining to the relevant jurisdiction with respect to
filing of criminal complaint in case the offence of Dishonour of the cheque is committed
under Section 138. Since the Criminal courts are approached, the issue needs to be examined
from the point of view of the Criminal Procedure Code, 1973. Section 177 of CrPC provides
that "Every offence shall ordinarily be inquired into and tried by a Court within whose local
jurisdiction it was committed". Section 178 provides that "(a) When it is uncertain in which
of several local areas an offence was committed, or (b) Where an offence is committed partly
in one local area and party in another, or (c) Where an offence is a continuing one, and
continues to be committed in more local area has one, or (d) Where it consists of several acts
done in different local areas, It may be inquired to or tried by a court having jurisdiction over
any of such local areas." There exists conflict between the two decisions inasmuch as in
Bhaskaran's case (supra) it was held that the expression "giving of notice" occurring in

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proviso (b) to Section 138 of the NI Act means "sending of notice" whereas in Harman's case
(supra) it was held that the said expression means "receipt of notice". The Harman case has
adopted a strict approach towards territorial jurisdictions of court. It thus correctly addressed
the rampant misuse of the liberal interpretation in Bhaskaran's case.

3. Explain the following :-

Ans. 3
 Bearer Cheque - In simple words a cheque which is payable to any person who
presents it for payment at the bank counter is called ‘Bearer cheque’.

 Order Cheque - When the word “or bearer” printed on the cheque is cancelled
and and the word ‘order’ may be written on the cheque, the cheque is called an
order cheque. An order cheque is one which is payable to a particular person.

 Uncrossed Cheque - When a cheque is not crossed, it is known as an “Open


Cheque” or an “Uncrossed Cheque”. These cheques may be cashed at any
bank and the payment of these cheques can be obtained at the counter of the
bank or transferred to the bank account of the bearer.

 Crossed Cheque - Crossing of cheque means drawing two parallel lines on the
left corner of the cheque with or without additional words like “Account Payee
Only” or “Not Negotiable”. A crossed cheque cannot be encashed at the cash
counter of a bank but it can only be credited to the payee’s account.

 Post Dated Cheque - Cheque on which drawer mentions a date which is yet to
come(future date) to the date on which it is presented, is called post-dated
cheque. For example, if a cheque presented on 10th Jan 2010 bears a date of
25th Jan 2010, it is a post-dated cheque.

 Stale Cheque - If a cheque is presented for payment after six months from the
date of the cheque it is called stale cheque. After expiry of that period, no
payment will be made by banks against that cheque.

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4. Considering the present day developments, how do you think some aspects of the
Negotiable Instruments Act be bought online?

Ans. 4

After being passed by the Lok Sabha, the Negotiable Instruments (Amendment) Bill, 2017, is
a step closer to becoming law. In the age of netbanking, businesses across India use cheques,
including post-dated ones, to make and receive payments from vendors, suppliers and
customers. In some cases, such cheques bounce and the matter ends up in court.

It is easy for the drawer of a dishonoured cheque to file an appeal and obtain a stay on court
proceedings. This reduces the credibility of cheques in the world of business.

5. What were the 2015 and 2018 Amendments to the Negotiable Instruments Act? What
purpose would they serve?

Ans. 5 The Negotiable Instruments (Amendment) Act, 2018 was notified on 02-08-2018.

The following amendments have been made —

Section 143 — now introduces a new proviso 143A, giving power to a Court to try an offence
under S. 138 to order the drawer of cheque to pay interim compensation to the complainant in
summary trials/summons case where he pleads not guilty to the accusations in the complaint.
Furthermore, the interim compensation shall not exceed 20 % of amount of the cheque and
shall be payable within 60 days from date of the order.

Recovery of fine shall be same as under Section 421 of the Code of Criminal Procedure,
1973.

In cases of acquittal, the Court is now empowered to direct the complainant to repay to the
appellant the amount so released, at interest rates as prescribed by RBI.

Section 148 — now empowers the appellate court, for appeals against conviction under S.
138, to direct the appellant to deposit a minimum 20 % of the fine/compensation awarded, in
addition to interim compensation paid under S. 143A.

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