Negotiable Instruments (Amendment) Act 2018 – Key Amendments

Negotiable Instruments Amendment Act 2018
Negotiable Instruments Amendment Act 2018

Negotiable Instruments like Cheques, Promissory Notes, Bill of Exchange etc. are widely used for commercial transactions in the country. Cheques are preferred over cash for making payment for goods or services in day to day business. Cheques minimize the risk of carrying cash and ensure safety in making payment.

Government has amended the Negotiable Instruments Act, 1881 which may be called the Negotiable Instruments (Amendment) Act, 2018. The main purpose of the amendment is to strengthen the people’s faith in such instruments and also to reduce the unnecessary delay in disposal of cheque dishonor cases.

Also Read – How to file case in court of law against Cheque bounce ?

Key Amendments in Negotiable Instrument Act, 1881

Insertion of Section 143A – Interim Compensation –

A new section 143 A inserted after Section 143 in NI Act, 1881. It empower the court to direct the drawer of Cheque to make payment (interim compensation) to the complainant. The interim compensation which shall not exceed 20 percent of the cheque amount can be ordered to be paid in cases where the accused does not plead guilty in a summary trial or summons case.

Interim Compensation shall be paid within 60 days from the date of order to make such payment, or within such further period not exceeding 30 days as may be directed by the court of sufficient cause being shown by the drawer of the Cheque.

The amount of fine imposed under section 138 or the amount of compensation awarded under section 357 of the Code of Criminal Procedure, 1973, shall be reduced by the amount paid or recovered as interim compensation under this section.

Insertion of Section 148 – Deposit in case of appeal –

A new section 148 inserted in parent act which states, “if drawer convicted in cheque dishonor case files appeal against conviction under section 138, the Appellate court may order the appellant to deposit such sum which shall be a minimum of 20 percent of the fine or compensation awarded by trial court”.

The such amount payable shall be in addition to any interim compensation paid by the appellant under section 143A.

Return of Compensation with Interest –

If the appellant is acquitted, the Court shall direct the complainant to repay to the appellant the amount so released, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.


  1. Hand loan is given on 2.8.17. at that time receiver of the loan given undated cheque on the same day. As on 2.8.18 not repaid the amount. Whether lender can put today date and present a cheque. If it is dishonoured a case can be filed under 138 Ni act


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