Negotiable instrument Act – Recent Amendments

« Sections 138 to 142 were added to the act in 1988.
« 5 new sections (Section 142 to 147) have been added in 2002
« Section 138 applies to cheque and other instruments like DD / PO / BC which can
be treated as cheque by holder in due course.
« Definition of cheque widened to include electronic image of a truncated cheque
and cheque in electronic form.
« Right of Banker who received payment on electronic image of a truncated cheque
to retain the truncated cheques.
« Certification of text of print out of electronic image of truncated cheque by paying
banker as a proof of payment
« Doubling the imprisonment term from one year to two years
« Doubling penalty for the offence up to twice the amount of instrument
« Doubling the period of time to issue demand notice from 15 to 30 days
« Cognizance can now be taken even if the complaint is made after expiry of the
stipulated period of one month provided the complainant satisfies the court that he
had the sufficient cause for not making the complaint within such period.
« Immunity from prosecution for nominee directors who are nominated by virtue of
holding any office or employment in Central Government or State Government
« Compounding of offence under N I Act
« Empowering the Magistrate to condone delay in filing complaint
« Bank’s memo denoting that the cheque has been dishonoured shall be presumed to
be the fact of dishonour. Requirement of Branch witness as drawee bank can be
dispensed with.
« The summons can be served by speed post or by authorized courier service and if
not accepted will be treated as duly served.
« Offences shall be tried by Ist class Judicial Magistrate or Metropolitan Magistrate.
« Trial to be concluded as expeditiously as possible and effort to be made to
conclude it within 6 months
« Offences under Act made compoundable.
« In case of conviction in a summary trial, the magistrate has been empowered to
pass a sentence not exceeding one year imprisonment and fine not exceeding Rs.
5000/-