Ten Bounced Cheque Cases In Online Banking Era That Had Gone Way Too Far

Introduction To Negotiable Instrument

  

A negotiable instrument is a transferable signed document that promises to pay the bearer a sum of money at a future date or on demand. Negotiable Instrument is a general term, and as per section 13 of Negotiable Instruments Act, there are three kinds of negotiable tools, it includes a promissory note[1], bill of exchange[2] or cheque [3] payable moreover to order to bearer.

The Negotiable Instruments Act came into force in the year 1881. Before this legislation was brought into force, laws relating to negotiable instruments were governed by English laws. Later the Act operates on the subject provision of Section 31 and 32 of the Reserve Bank of India Act 1934.

A Cheque is said to be bounced or dishonored when the bank can not clear it for want of sufficient funds in the account or various other reasons, some of it can be overwritten on the cheque, payment stopped by the account holder, signature mismatch, etc.

Dishonor of a negotiable instrument can be broadly committed in two ways, Dishonour by non-acceptance[4] and non-payment[5]. As per Section 138 of the Act, the disgrace of a cheque is a crime and is disciplinary by custody up to two years or with financial forfeit or with both.

The recipient must show the sign to the drawer with 30 days from the date of in receipt of “Cheque Return Memo” from the bank. The notice must be positioning that the cheque sum must be rewarded to the recipient within 15 days from the date of receiving of the notice by the drawer. After in receipt of the notice, if the drawer doesn’t make the sum within 15 days from the day of in receipt of the notice, then he has committed a wrong under Section 138 of the Negotiable Instruments Act.

The grievance should be listed in a judge’s court within a month of the termination of the notice period. It is vital in this case to refer an attorney who is well experienced and accomplished in this area of practice to proceed additional in the stuff.

On 18^th of February 2019, in the case of Sri Santhosh J v. Sri V Narasimha Murthy, High Court of Karnataka at Bangalore; proposed to amend the said act to address the issue of delay in the final resolution of cheque dishonor cases to provide relief to payees of the dishonored cheque. In addition to this, it will also discourage frivolous and unnecessary litigations and save the time of the Court.

After this proposal, certain amendments which are to be brought in the legislature were drafted in the form of The Negotiable Instruments (Amendment) Bill, 2017. After being passed by the Lok Sabha, the said Act is a step closer to becoming a law. In the age of net banking, businesses across India use cheques, including post-dated ones, to make and receive payments from vendors, suppliers, and customers.

The Rajya Sabha passes proposed amendments to be brought after this bill-

1. It aims to bring the provision enforce, under which the drawer of the cheque that has been dishonored to pay interim compensation to the complainant.
2. The Interim compensation that is to be provided shall not exceed the 20% of the amount of the cheque that was dishonored.
3. The interim compensation is to be paid by the drawer of the dishonored cheque in a summary trial or a summons case. The same is applicable even if he pleads not guilty to the charge made in the complaint.
4. The drawer of the cheque has to pay interim compensation within 60 days of the date of order. However, it is at the discretion of the bench to give an extension of further 30 days but not beyond that.
5. In the case when the drawer of the cheque is acquitted in the case, the complainant has to repay the drawer the interim compensation with interest. The repayment has to made within 60 days from the date of the order of the court.
6. An additional 20 percent compensation will have to be paid if the drawer goes for an appeal. This amount would be over the Interim compensation amount paid during the initial period of the suit. This clause aims to deter appeals.

Cutting across the party line, members of opposition parties including Congress supported the bill but suggested that the punishment must be more stringent to curb cheque payments defaults. Another view in the opposition of bill was that there is a presupposition that drawee is wrong and the payee is right, which is right, which is not good. In some instances, the payee is also a culprit.

During the debate on the bill, the Congress Leader Madhusudan Mistry said the penalty proposed was not enough to curb the fraudulent practices. They said the government should come out with laws in parallel with France and UAE, wherein the person who has committed default in the payment of cheque shall be barred from issuing a cheque for five years. This has proved to be an effective deterrence strategy, for that of an experimental law like this.

[1] Section 4 NI Act

[2] Section 5 NI Act

[3] Section 6 NI Act

[4] Section 91 NI Act

[5] Section 92 NI Act

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10 Facts That Nobody Told You About Type Of Privacy Torts

There are laws in each state which balances the Right to Privacy of every individual. Even if any media or newspaper seeks the privacy of anyone’s life, then they will be the charge for the invasion of privacy.

There are four types of Privacy Torts

1. Intrusion

This is the first type of Invasion of Privacy. This occurs when someone enters or spreads into another person’s private life. This includes a person recording the private conversation of another person’s that too without his/her knowledge, trespassing to another person’s property and taking photographs without his/her consent, and this counts as violating someone’s Right to Solitude. Even, news sources like Media have to be careful about the privacy of another person. If they intrude to the private life of public figures then they will be sued for invasion of privacy.

Read Also – New laws in India

2. Public Disclosure

It is the second type of Private Torts. This occurs when a person publishes embarrassing, hurtful, and offensive facts about another person’s life. If the media brings the private facts of the high-profile person to know of the public, then that person may sue them for the invasion of privacy. The media source may find guilty by the Court for Invasion of Privacy depending upon how they (Media) have obtained the information.

3. False Light

It is the third type of Private Torts. This occurs when a person produces the false statement or depicts the things in a false manner about another person. For Example, A writer distorts, embellishes or fictionalizes a story; he can characterize some random person in a way that perverts the truth. Defamation and false light publication are two completely different things. A person can fictionalize some random person or a known person in a story but without any malicious intention.

See more: Right to privacy

4. Appropriation

It is the fourth and last type of Private Torts. This occurs when someone uses the person’s image or name for the unauthorized commercial use that too without his/her consent, knowledge, and approval. For Example, A company cannot use the name or image of the celebrity for endorsement of a product without his/her consent. Photographs and images used in a news channel or newspaper, images and pictures of any incidental references used in the books and films, the Court will not consider them an appropriation. But if the media is using a person’s name, even only the part of his name without his/her approval and consent, then he/she may sue the media for invasion of privacy.