Jurisdiction for trial for dishonour of cheque

The Negotiable Instruments (Amendment) Act 2015

The Above Amendment Act came in to force with retrospective effect. According to the notification published in the official Gazette dated 26.12.2015 the Amendment shall be deemed to have come into force on the 15th day of June, 2015. Rajya Sabha passed the Negotiable Instrument (Amendment) Bill 2015 on 7th December 2015 . Lok Sabha had passed the Bill in August 2015. The Act will replace Negotiable Instrument (Amendment) ordinance which was re-promulgated on 25th September 2015. The amendment makes changes in provisions relating to the territorial jurisdiction for filing Cheque dishonour Cases in the Negotiable Instrument Act.

Effect of Amendment Act of 2015

As per the Amendment the offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction,—
(a) if the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated; or
(b) if the cheque is presented for payment by the payee or holder in due course, otherwise through an account, the branch of the drawee bank where the drawer maintains the account, is situated.

Background of Amendment Act of 2015

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Arbitration Law in India

History of Arbitration in India:

Resolution of disputes through arbitration was not unknown in India even in ancient times. Simply stated, settlement of disputes through arbitration is the alternate system of resolution of disputes whereby the parties to a dispute get the same settled through the intervention of a third party. The role of the court is limited to the extent of regulating the process. During the ancient era of Hindu Law in India, there were several machineries for settlement of disputes between the parties. These were known as Kulani (village council), Sreni (corporation) and Puga (assembly).  Likewise, commercial matters were decided by Mahajans and Chambers. The resolution of disputes through the panchayat was a different system of arbitration subordinate to the courts of law. The arbitration tribunal in ancient period would have the status of panchayat in modern India.[26] The ancient system of panchayat has been given due statutory recognition through the various Panchayat Acts subsequently followed by Panchayati Raj Act, 1994. It has now been constitutionally recognized in Article 243 of the Constitution of India.

The Early Scenario:

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