A Study on Dishonour of Negotiable Instrument with Special Emphasis on Laws of Dishonour of Cheque in India

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  • Topic: Cheque, Negotiable instrument, Law
  • Pages : 15 (5241 words )
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  • Published : February 2, 2013
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Title: A Study on Dishonour of Negotiable Instrument with Special Emphasis on laws of Dishonour of Cheque in India

Table of Contents
Chapter No.| Chapter Title | Page No.|
Chapter 1| Introduction:-Title General IntroductionStatement of the Problem Objective of the StudyHypothesisesResarch Question Scope and Limitation Research MethodologyTentative ChapterizationReview of Literature| 5-9| Chapter 2| Meaning of Negotiable Instrument and Dishonour of Negotiable Instrument| 10-12| Chapter 3| Legal Provision related to Dishonour of Negotiable Instrument in India with special reference to Dishonour of Cheque| 13-16| Chapter 4| Judicial trend related to Dishonour of Cheque| 17-19| Chapter 5| Conclusion and Suggestion | 20-21|

Chapter 1
TITLE: A Study on Dishonour of Negotiable Instrument with Special Emphasis on laws of Dishonour of Cheque in India Introduction
A cheque is a type of bill of exchange and is a negotiable instrument. It is used for making payments without any need to carry cash. A Dishonored Cheque is a Cheque that is not credited by the Bank for numerous reasons including: The signature does not match; the account on which the cheque is drawn has insufficient funds, the date is invalid – i.e. the presentation of the cheque 6 months from the date on the cheque. Advent of cheques in the market have given a new dimension to the commercial and corporate world, its time when people have preferred to carry and execute a small piece of paper called Cheque than carrying the currency worth the value of cheque. Dealings in cheques are vital and important not only for banking purposes but also for the commerce and industry and the economy of the country. But pursuant to the rise in dealings with cheques also rises the practice of giving cheques without any intention of honouring them. Before 1988 there being no effective legal provision to restrain people from issuing cheques without having sufficient funds in their account or any stringent provision to punish them in the vent of such cheque not being honoured by their bankers and returned unpaid. Of course on dishonour of cheques there is a civil liability accrued. However in reality the processes to seek civil justice become a long drawn process and recovery by way of a civil suit takes an inordinately long time. To ensure prompt remedy against defaulters and to ensure credibility of the holders of the negotiable instrument a criminal remedy of penalty was inserted in Negotiable Instruments Act, 1881 in form of the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 which were further modified by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002. This article attempts to elucidate the penal provision in the light of the amendments and the judicial interpretationsIn India, cheques are governed by the Negotiable Instruments Act, 1881, which is largelya codification of the English Law on the subject. Before 1988 there was no effective legal provision to restrain people from issuing cheques without having sufficient funds in their account or any stringent provision to punish them in the event of such cheque not being honoured by their bankers and returned unpaid. Although, on dishonour of cheques there is a civil liability accrued, however in reality the processes to seek civil justice becomes notoriously dilatory and recover by way of a civil suit takes an inordinately long time. To ensure prompt remedy against defaulters and to ensure credibility of the holders of the negotiable instrument a criminal remedy of penalty was inserted in Negotiable Instruments Act, 1881 in form of the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 which were further modified by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002. Statement of Problem

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