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Business

Decriminalising Bouncing of Cheques will Increase Hardship: Dipen Agrawal, President-CAMIT

by Himanshu June 21, 2020June 21, 2020
written by Himanshu June 21, 2020June 21, 2020
Decriminalising Bouncing of Cheques will Increase Hardship: Dipen Agrawal, President-CAMIT

Chamber of Associations of Maharashtra Industry & Trade (CAMIT) has strongly protested the move of Department of Financial Services, Ministry of Finance to decriminalise certain actions/omissions incorporated as economic offences under nineteen different Acts particularly the offence of dishonour of cheque under Section 138 of Negotiable Instruments Act 1881. Dipen Agrawal, President of CAMIT said that it is true that criminalizing procedural lapses and minor non-compliances increases the burden on businesses and hampers ease of doing business, and the law must uphold and reflect the values and beliefs of the society in the present time. The recent announcement by the government to decriminalise procedural defaults under the Income Tax Act, 1961, and the Companies Act, 2013 is highly praised by all stakeholders.

The executive branch of government should be extra cautious while decriminalising any offence and should ascertain beyond a reasonable doubt that the offence proposed to be decriminalised is a mere procedural lapse and has no large-scale impact across society; that whether the reasons for classifying the said action/omission as an offence, at the first instance, still exist or not; and it should be ensured that future perpetrators of the said offence will not equate decriminalisation as the legalisation of the offence decriminalised.

Decriminalisation of offence U/s 138 & 141 to reduce pendency of cases is like the SHO of Police Station avoiding registration of FIR for bringing down the crime rate in the area under his jurisdiction, emphasised Dipen Agrawal.

Mohan Gurnani, Chairman CAMIT said that, the proposed decriminalisation of offence U/s 138 and 141(3) of N.I. Act is opposed because they concern everybody whether he is a man on the street, a layman, a business magnate, an industrialist, or a banker.  Justice Delayed is indeed Justice Denied, more than 35 lakh cases U/s 138 are pending, which constitutes more than 15% of the total criminal cases pending in District Courts. The situation is alarming but decriminalising the offence U/s 138 is not the solution, on the other hand, it will burden the Civil side of the judiciary which is already witnessing pressure on it.

In 2017 government has inserted Section 143A & 148 to make the NI Act more effective and powerful by providing interim relief to the complainant to further strengthen the use of cheques and distinguish them from other negotiable instruments. Supreme Court of India has recently observed that more than half of the cheque bounce cases (about 18 lakh) are pending due to the absence of the accused. Gurnani demanded the government should formulate ways and means to compel the appearance of accused persons before the trial court.

Ashok Bafna, Executive President CAMIT said that the creditworthiness of cheques as a medium for settlement of consideration has increased considerably over the years after making dishonour of cheques an offence in 1988. Parliamentary and Judicial interventions over the time have attempted to smoothen the rough-edges for early disposal of cases U/s 138 of N.I. Act. These measures have built the confidence in the business community to do the business against Post Dated Cheques (PDC) and if the sanctity of cheques is reduced by decriminalisation of Section 138 & 141, it will harm the ease of doing business.

The goals of reduced pendency of cases & burden on business; enhance confidence among investor & ease of doing business; and revival of economy post-COVID-19 pandemic can be achieved by ensuring early and just disposal of cheque bounce cases added Ashok Bafana.

Concerted efforts by all the stakeholders i.e. Administration, Police, Banks, and Presiding Officers of Trial Court to develop consensus to adopt the suggestions made in the memorandum submitted by CAMIT, informs a press release issued by Sanjay K. Agrawal, Vice President (Nagpur) of CAMIT.

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