Negotiable Instruments Act: Provision for Interim Compensation to Payee

Negotiable Instruments Act: Provision for Interim Compensation to Payee

The Lok Sabha has passed an amendment sought on NI Act on 23rd July 2018.

Now, with this amendment, the court is empowered to grant an interim compensation to the complainant from the drawer of the cheque not exceeding 20% of the cheque amount. However this is subject to cases where the accused does not plead guilty in summery trails or summons cases.

The interim compensation when ordered by the court has to be payed to payee within 60 days of the order. The court can issue a warrant of levy of fine by attachment and sale of any moveable property belonging to the offender (Section 421to424 of Cr P C)

However, if the accused is acquitted after trial the interim compensation received by a complainant has to be returned along with interest at bank rates as per RBI norms

The Amendment has brought in a new Section 148 which empowers the appeal courts to direct deposit of a minimum of 20% of the cheque amount appealed by the drawer against conviction within a period of 60 days; in case of allowing the appeal the amount has to be returned to the accused.


Dr. Gubbi. S. Subba Rao

Counselor & Advocate

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