Decriminalization of Negotiable Instrument Act -section 138 and 143(1) will benefit defaulters: FAM registered opposition to proposed change in law
Mumbai: Central government thought that in this difficult time of coronavirus pandemic business ease should be given so they intended to introduce Decriminalization of Negotiable Instrument Act -section 138 and 143(1) Minor offences, little did they know that it will face opposition from trader community only. Largest traders association in Maharashtra opposed the move in the letter sent to Finance minister Nirmala Sitharaman saying decriminalization of section 138 and 143(1) will encourage several fraudsters to adopt measures for several illegalities that may follow which were only addressed under the Negotiable Instruments Act 1881.
If such punishable offences are repealed / decriminalized, illegalities are more fully in the form of cheating will crop up abundantly in the name of business and transactions.
Federation of Associations of Maharashtra (FAM) is Apex body of traders, merchants, entrepreneurs and businessmen of Maharashtra. There are 700 Associations under its umbrella. FAM is registered its objection on the recent central government proposed Decriminalization of Negotiable Instrument Act -section 138 and 143(1)-Minor Offences for Improving Business Sentiment and Unclogging Court Processes, said FAM president Vinesh Mehta.
Vinesh Mehta said that, “we have raised some points on the Decriminalization of section 138 and 143 (1) like with decriminalization, the payee party who already is in distress will be further burdened by mounting rounds of litigation expenses, while the issuer/payer Company and its directors will sit upon the bounced money and reap its benefits/interests. This move will help the fraud companies in a big way.
He said that, “Instead of making the Law stringent and strict on the persons who have intention to cheat and purposefully and deceitfully subsequently criminalization will increase and it will be a modus operandi adopted by several cheaters and schemers to deceive persons who have to be duly paid. The government should refrain from making any such change in Negotiable Instrument Act which blows the trust/sanctity of cheques, the banking sector, the businesses and the common man who treat the cheques as a guaranteed payment. By decriminalization of Section 138 the whole section would become futile and render toothless and the very purpose of this Section/Act would be defeated.”
As we have 700 member association, before registering opposition we had discussion on our level and in our discussion we agreed on 10 corrections instead of Decriminalization of Negotiable Instrument Act -section 138 and 143(1)- so that to strengthen existing criminal provisions in section 138, he said
The 10 suggestions to strengthen act
1. The notices under the Negotiable Instruments Act are served by courts and not through the police department.
2. The notice may be served by all means including email, SMS, WhatsApp communication also to make it faster.
3. The stamp duty to file the cases be reduced and should be charged/recovered from defaulter when the case is decided finally.
4. The cases of the Act should be resolved within a limited time frame say 6 to 12 months from the date of filing of the case.
5. The security deposit should be fifty percent of the default amount if a bail application is applied to avoid imprisonment.
6. Exemption to personal appearance should be stringent unless grounds are certified by transparent written certification/authority.
7. In case of conviction the term of imprisonment should be minimum 4 years or more as per the default amount as against current provision of two years. .
8. In case the bail application is furnished on behalf of accused, and accused absconds, then Suo motto case of Section 420 of IPC is registered by the court against the person applying for bail on behalf of the accused.
9. In addition to penalty as per law interest is added to the default amount for the delay period from the date of cheque disbursement date initially with defined rate of Interest.
10. The charges for default for Domestic Companies/Foreign Companies and High Net Worth individuals should be double or based on some defined slabs.