Pending proceedings in check bounce cases dampened ease of doing business in India


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Pending action in check bounce cases is an obstacle in the way of ‘ease of doing business’ in India, Supreme Court expresses concern

New Delhi. The Supreme Court on Friday said that pending proceedings and a large number of complaints in check bounce cases have undermined the ease of doing business in India and created hurdles in investment. The top court said that the offense under Section 138 of the Negotiable Instruments (NI) Act relating to check bounce is quasi-criminal in nature and the objective of the law is to “provide security” to the creditors and to instil confidence in the banking system of the country. Is.

A bench headed by Justice DY Chandrachud made the observation in its 41-page judgment on two petitions based on complaints filed under the provisions of the law. The bench also includes Justice Vikram Nath and Justice BV Nagarathna. The court observed that the pendency of court proceedings under Section 138 of the Negotiable Instruments Act and the flood of complaints have affected the ease of doing business in India, and thereby hindered investment.

“Accepting these issues, the Ministry of Finance, vide a notice dated June 8, 2020, has sought comments in respect of petty offenses including section 138 of the Negotiable Instruments Act to improve business sentiments in the country,” the bench said. The top court said that under Section 138 of the Negotiable Instruments Act, parties are encouraged to settle the dispute, which leads to final closure of the case instead of protracted litigation before the court.

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