A number of suggestions were made in a high level meeting convened by the ministry recently to deal with the high incidents of the inspection Bounce cases, PTI reported.
According to PTI sources, some of the steps suggested before taking legal recourse include debiting other accounts of the check issuer in case there is a shortage of funds in his account.
Other suggestions include treating the check bounce as a loan default and thus reporting it to credit information companies for necessary downgrade of the score, the sources said, adding that a proper legal approach is to be taken before accepting these suggestions. Will be connected.
If these suggestions are implemented, it will help in implementing check honoring by the payer without going to court and forcing him to make payment through technology making it a deterrent.
These measures will help in promoting ease of doing business and prevent people from deliberately indulging in issuance of checks despite having insufficient funds in their accounts.
Sources said the proposed steps could be implemented through integration of data across banks.
Standard Operating Procedure (SOP) will be required for auto debit and other suggestions.
section 138 of negotiable instrument act1881 deals with dishonor of check due to lack of money in the account.
A complaint of check bounce under section 138 of the Act can be filed in the court situated at the place where the payee’s bank is situated. It is an offense punishable with fine which may extend to twice the amount of check or imprisonment for a term not exceeding two years, or with both.
When an issuer presents a check to the bank for payment, and it is returned unpaid by the bank due to insufficient funds, the check bounces.
Annoyed by the large number of pending check bounce cases, Supreme court A committee was constituted to suggest steps to be taken for speedy disposal of about 35 lakh pending cases across the country.
During the hearing, the Center had “accepted in principle” the need to create additional courts to deal with such cases.
The committee constituted by the Supreme Court had recommended procedural reforms, full use of technology and expansion of infrastructure for speedy resolution of disputes.
In addition, the panel had suggested certain changes in the Negotiable Instruments Act, 1881.
The trade bodies have been demanding changes in the check bounce law for speedy disposal of such cases.
Industry body PHDCCI had recently urged the finance ministry to take measures like compulsorily suspending bank withdrawals for a few days to make check issuers accountable for their actions in check bounce cases.
The Chamber has suggested that the government should enact a law that the dispute between the two parties should be settled through arbitration within 90 days from the date of the check bounce.
(with inputs from PTI)