Context:

• The Lok Sabha passed the Negotiable Instruments (Amendment) Bill, 2017, which provides for allowing a court trying an offence related to cheque bouncing to direct the drawer to pay interim compensation to the complainant.
• The bill aims to counter the delaying tactics employed by people who want to avoid paying cheques issued by them.
• The interim compensation may be paid where the drawer pleads not guilty of the accusation.
• The compensation will not exceed 20 Percent of the cheque amount and will have to be paid by the drawer within 60 days of the court’s order.

About Negotiable Instruments

• A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer usually named on the document.
• Negotiable Instruments Act, 1881 defines promissory notes, bills of exchange and cheques.