New Delhi: The Union Cabinet on July 5 decided to enhance punishment for dishonour of cheques and ensure time-bound disposal of cases by introducing a fresh Bill in Parliament to amend the Negotiable Instruments Act 1881 replacing the old Bill.

The Information Technology Act 2000 would also be made applicable to electronic image of a truncated cheque and an electronic cheque, Information and Broadcasting Minister Sushma Swaraj told reporters after the Cabinet meeting.

"The present provisions in Negotiable Instruments Act (NIA) have been found to be inadequate in dealing with the menace resulting from dishonour of the cheque," she said adding that the proposed amendments in the NIA would speed up disposal of cases and also provide for enhancing the punishment period from one to two years for offenders.

She said a distinction would be made between executive and non-executive directors of state or Central government undertakings whereby a non-executive director would not be liable for prosecution under the Act.

"The distinction will save the non-executive directors from harassment," the minister said.

PTI