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NEW DELHI: National Crime Records Bureau (NCRB) information for 2024 reveals that lone 18 cases were registered nether the Negotiable Instruments Act nationwide, each pertaining to cheque bounce, and dispersed crossed lone 2 states, Jharkhand (10 cases) and Uttar Pradesh (8 cases).
The debased fig of cases raises questions astir the Act, arsenic it is 1 of the oldest commercialized laws successful the state and yet is fading into irrelevance.What is the Negotiable Instruments Act, 1881?The Negotiable Instruments Act, 1881 is simply a cardinal authorities that regulates and defines negotiable instruments utilized for making and receiving payments successful commercialized oregon commerce. A negotiable instrumentality is simply a written papers that guarantees the outgo of a circumstantial magnitude of money, either connected request oregon astatine a fixed aboriginal date, and tin beryllium freely transferred from 1 idiosyncratic to another.The NCRB's 2024 information shows that crossed 28 states and 8 national territories, lone 18 cases were registered nether the Negotiable Instruments Act retired of which 10 successful Jharkhand and 8 successful Uttar Pradesh and each cases were astir cheque bounce. Not a azygous lawsuit of promissory enactment fraud, measure of speech disputes, oregon immoderate different proviso of the Act was recorded.The Act chiefly covers 3 fiscal instruments:
- Promissory note: It is simply a written committedness done which a idiosyncratic is bound to wage a fixed sum to different person
- Bill of Exchange: This is simply a written bid that directs a 3rd enactment to wage a circumstantial magnitude to a named person
- Cheque: Works likewise to the measure of speech but is drawn specifically connected a bank
Of each three, the cheque is the astir wide utilized and consequently the astir litigatedThe basal doctrine of the Act is to make a ineligible model for fiscal transactions.
It defines who tin contented specified instruments, however they tin beryllium transferred, and what the rights and liabilities of the drawer (the idiosyncratic issuing the cheque) to the drawee (the bank) and payee (the recipient) are. The Act further deals with what happens erstwhile instruments are dishonoured — erstwhile a cheque bounces oregon a measure is not accepted.What is Section 138 and wherefore it is the astir utilized provision?Section 138 of the Negotiable Instruments Act deals with the cheque bounce clause. According to the Section, the bouncing of a cheque is simply a transgression offence. It says that if an unpaid cheque is returned from the bank, which could beryllium owed to insufficient funds oregon relationship closure, past the idiosyncratic who issued that cheque tin beryllium criminally held liable. The proviso says that the payee indispensable nonstop a legal notice wrong 30 days of receiving the bank's memo, the drawer past has 15 days to marque the outgo and if outgo is inactive not made, the payee tin record a transgression ailment successful tribunal wrong the adjacent 30 days. The punishment nether the Act is up to 2 years of imprisonment, a good of up to doubly the cheque amount, oregon both.
