Negotiable Instrument Act: 2018 Amendments-A Closer Look

Article by Gagan Kumar, Runjita Das and Vidushi Khaitan

INTRODUCTION

The Negotiable Instruments Act, 1881 ("the Act") was enacted to characterize and define the law relating to authoritative records like Promissory Notes, Bills of Exchange and Cheques. Over the years, the Act has undergone amendments to deal with the changing times, keeping in view the common goal of rapid disposal of cases identifying with the offence of dishonour of cheques. However, the pendency ratio of cheque dishonour cases still remains a critical issue and adversely affects the cash flows of businesses particularly Small & Medium sized Enterprises ("SMEs").

It is observed that one of the main reasons that plagues the system, roots down to the malafide strategies of corrupt drawers of dishonoured cheques towards evading and abusing the process of law, eventually harming the innocent payees of the dishonoured cheques.