Executive Summary:
The Negotiable Instruments Amendment Act, 2015, amends the Negotiable Instruments Act, 1881. It received presidential assent on December 26, 2015, and is deemed to have come into force on June 15, 2015. The Act defines "a cheque in the electronic form" and provides clarity on jurisdictional aspects for offenses under section 138 of the principal Act.
Key Points / Main Content:
Definitions:
* "Cheque in the electronic form" is defined as a cheque drawn electronically, signed securely with digital or electronic signatures, and using computer resources.
* Expressions like "asymmetric crypto system", "computer resource", "digital signature", "electronic form" and "electronic signature" shall have the same meanings as assigned to them in the Information Technology Act, 2000.
Jurisdiction for Offences:
* Offenses under section 138 shall be inquired into and tried by a court within whose local jurisdiction:
* The bank branch of the payee/holder in due course (where the account is maintained) is situated, if the cheque is delivered for collection through an account.
* The branch of the drawee bank (where the drawer maintains the account) is situated, if the cheque is presented for payment otherwise than through an account.
* For collection, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course maintains the account.
Validation for Transfer of Pending Cases:
* Cases transferred per the Negotiable Instruments Amendment Ordinance, 2015, are deemed transferred under this Act, as if subsection 2 of section 142 had been in force at all material times.
* Subsequent complaints against the same drawer shall be filed before the same court where the initial complaint is pending, irrespective of where the cheques were delivered or presented for payment.
* Multiple prosecutions pending before different courts shall be transferred to the court where the first case was filed and is pending, as if subsection 2 of section 142 had been in force at all material times.
Repeal and Savings:
* The Negotiable Instruments Amendment Second Ordinance, 2015, is repealed.
* Actions taken under the principal Act, as amended by the repealed Ordinance, are considered done under the corresponding provisions of the principal Act, as amended by this Act.
Impact Analysis:
Payees/Holders in Due Course:
* Impact: Determines where complaints can be filed based on where they bank, irrespective of where the cheque was drawn.
* Action Required: File complaints in the court having jurisdiction over the bank branch where they maintain their account.
Drawer of Cheques:
* Impact: May face legal proceedings in a jurisdiction different from where they issued the cheque. Ensures all cases by the same payee are consolidated in one court.
* Action Required: Be aware of potential legal proceedings in the jurisdiction of the payee's bank.
Courts:
* Impact: Determines which courts have jurisdiction over cases related to dishonored cheques. Requires transfer of cases to align with the new jurisdictional rules.
* Action Required: Transfer cases as required by the amendment to ensure proper jurisdiction.
Banks:
* Impact: Need to understand the definition of "cheque in the electronic form".
* Action Required: Implement systems to handle electronic cheques as per the new definition.
Key Entities Referenced
Negotiable Instruments Act, 1881: The principal Act being amended by the Negotiable Instruments Amendment Act, 2015.
Negotiable Instruments Amendment Act, 2015: An Act of Parliament further to amend the Negotiable Instruments Act, 1881.
Parliament: The legislative body that enacted the Negotiable Instruments Amendment Act, 2015.
President of India: The head of state who gave assent to the Negotiable Instruments Amendment Act, 2015 on 26th December, 2015.
Information Technology Act, 2000: An Act referred to for defining terms like asymmetric crypto system, computer resource, digital signature, electronic form and electronic signature.
Code of Criminal Procedure, 1973: A procedural law mentioned in relation to the transfer of pending cases.
Negotiable Instruments Amendment Ordinance, 2015: An ordinance which is superseded by the Negotiable Instruments Amendment Act, 2015, regarding jurisdiction of courts.
Dr. G. Narayana Raju: Secretary to the Government of India.
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MINISTRY OF LAW AND JUSTICE
(Legislative Department)
New Delhi, the 29th December, 2015/Pausha 8, 1937 (Saka)
The following Act of Parliament received the assent of the President on the
26th December, 2015, and is hereby published for general information:—
THE NEGOTIABLE INSTRUMENTS (AMENDMENT) ACT, 2015
NO. 26 OF 2015
[26th December, 2015.]
An Act further to amend the Negotiable Instruments Act, 1881.
BE it enacted by Parliament in the Sixty-sixth Year of the Republic of India as follows:—
1. (1) This Act may be called the Negotiable Instruments (Amendment) Act, 2015. Short title and
commencement.
(2) It shall be deemed to have come into force on the 15th day of June, 2015.
26 of 1881. 2. In the Negotiable Instruments Act, 1881 (hereinafter referred to as the Amendment
principal Act), in section 6,— of section 6.
(i) in Explanation I, for clause (a), the following clause shall be substituted,
namely:—
'(a) "a cheque in the electronic form" means a cheque drawn in electronic
form by using any computer resource and signed in a secure system with digital
signature (with or without biometrics signature) and asymmetric crypto system
or with electronic signature, as the case may be;';2 THE GAZETTE OF INDIA EXTRAORDINARY [PART II—
(ii) after Explanation II, the following Explanation shall be inserted,
namely:—
'Explanation III.—For the purposes of this section, the expressions
"asymmetric crypto system", "computer resource", "digital signature", "electronic
form" and "electronic signature" shall have the same meanings respectively
assigned to them in the Information Technology Act, 2000.'. 21 of 2000.
Amendment 3. In the principal Act, section 142 shall be numbered as sub-section (1) thereof
of section and after sub-section (1) as so numbered, the following sub-section shall be inserted,
142.
namely:—
"(2) The offence under section 138 shall be inquired into and tried only by a
court within whose local jurisdiction,—
(a) if the cheque is delivered for collection through an account, the branch
of the bank where the payee or holder in due course, as the case may be, maintains
the account, is situated; or
(b) if the cheque is presented for payment by the payee or holder in due
course, otherwise through an account, the branch of the drawee bank where the
drawer maintains the account, is situated.
Explanation.— For the purposes of clause (a), where a cheque is delivered
for collection at any branch of the bank of the payee or holder in due course,
then, the cheque shall be deemed to have been delivered to the branch of the
bank in which the payee or holder in due course, as the case may be, maintains
the account.".
Insertion of 4. In the principal Act, after section 142, the following section shall be inserted,
new section namely:—
142A.
Validation for "142A. (1) Notwithstanding anything contained in the Code of Criminal
transfer of Procedure, 1973 or any judgment, decree, order or direction of any court, all cases 2 of 1974.
pending cases.
transferred to the court having jurisdiction under sub-section (2) of section 142, as
amended by the Negotiable Instruments (Amendment) Ordinance, 2015, shall be deemed
to have been transferred under this Act, as if that sub-section had been in force at all
material times.
(2) Notwithstanding anything contained in sub-section (2) of section 142 or
sub-section (1), where the payee or the holder in due course, as the case may be, has
filed a complaint against the drawer of a cheque in the court having jurisdiction under
sub-section (2) of section 142 or the case has been transferred to that court under
sub-section (1) and such complaint is pending in that court, all subsequent complaints
arising out of section 138 against the same drawer shall be filed before the same court
irrespective of whether those cheques were delivered for collection or presented for
payment within the territorial jurisdiction of that court.
(3) If, on the date of the commencement of the Negotiable Instruments
(Amendment) Act, 2015, more than one prosecution filed by the same payee or holder
in due course, as the case may be, against the same drawer of cheques is pending
before different courts, upon the said fact having been brought to the notice of the
court, such court shall transfer the case to the court having jurisdiction under
sub-section (2) of section 142, as amended by the Negotiable Instruments (Amendment)
Ordinance, 2015, before which the first case was filed and is pending, as if that
sub-section had been in force at all material times.SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 3
Ord. 7 of 5. (1) The Negotiable Instruments (Amendment) Second Ordinance, 2015, is hereby Repeal and
2015. savings.
repealed.
(2) Notwithstanding such repeal, anything done or any action taken under the principal
Act, as amended by the said Ordinance, shall be deemed to have been done or taken under
the corresponding provisions of the principal Act, as amended by this Act.
————
DR. G. NARAYANA RAJU,
Secretary to the Govt. of India.
PRINTED BY THE GENERAL MANAGER, GOVERNMENT OF INDIA PRESS, MINTO ROAD, NEW DELHI
AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI—2015.
GMGIPMRND—3972GI(S3)—29-12-2015.