Anirudh Patwa, Devi Ahilya Visva Vidhyalaya
ABSTRACT
Dishonour of cheque under section 138 of the Negotiable Instrument Act is a penal provision. The penal provisions has been in force since 1988. It has been, upto some extent, a success in increasing the use and securing the credibility of cheques. Moreover, there has been rise in the number of cheque bounce cases. Currently, there are around 40 Lakh cheque bounce cases constituting 20% of total pending cases in Indian Legal System. But lately, the government believes that the provision has fulfilled its purpose and is now proposing to decriminalise the provision. We can observe that criminalization has not been that successful in the commercial mercantile industry, therefore, government seeks to decriminalise it. Thus, gathering support and opposition from every corner.
The paper discusses the laws relating to dishonour of cheque in India and a critical analysis of the nature and essence of penalization & decriminalisation of the subject in issue. The paper tries to analyse the effect of decriminalisation and subsequent recommendations. The paper finally suggests the best possible option for the issue in the Indian context.
Keywords: Dishonour of cheque, Negotiable Instrument Act, Decriminalisation
