The Negotiable Instruments Act, 2020 is being amended to make the 'Negotiable Instruments Act, 2020', punishable by imprisonment for a minimum term of 6 months to a maximum of 2 years or a fine of four times the amount written on the cheque.
The draft of the 'Negotiable Instruments Act, 2020' was published on the website of the Ministry of Finance's Finance Department on Wednesday (January 15). The law will be finalized after consultation with stakeholders.
The seventh chapter of the draft states about the punishment, 'A person has written a check for the payment of an amount to another person on account of his bank but it is not possible to reconcile the check with the amount of money that he has as his bank, that is, he does not have that amount of money; Again, if the check is returned unpaid by the bank due to exceeding the amount of money agreed with the bank for payment of money from the said account or due to voluntarily and purposefully suspending or stopping the transaction, then that person will be considered to have committed a crime. '
In the absence of any provision contrary to this Act, the offender shall be punished with imprisonment for a term which may extend to a minimum of 6 months to a maximum of 2 years or with a fine of four times the amount written in the cheque, or with both.
At present, the Negotiable Instruments Act provides for imprisonment of up to one year in cases of check dishonor. Penalty is three times the specified amount of money concerned. or provides for both penalties.
According to sources, the Negotiable Instruments Act, 1881 (The Negotiable Instruments Act, 1881) was made in 1881 dealing with negotiable instruments. This law is used in promissory note, bill of exchange and dishonor of cheque.
It is said in the draft of the new law, "The Negotiable Instruments Act, 1881" is expedient to be amended and re-enacted in a timely manner. The same new Act is titled as 'Negotiable Instruments Act, 2020'.