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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Do you know why Lawyers Wear Black Coat??

Why do Lawyers Wear Black and white Uniform?

Every profession has a certain dress code, and the people belong to a particular profession are recognized by their attire.  Such as Doctors are recognized by their white aprons, engineers by their helmets and so on. In this way, lawyers are identified by their black and white attire. Though the color of lawyer’s attire is the same lawyers have a dress code that differs from country to country.  It is considered that lawyers have one of the most elegant dress code compared to other professions. Lawyers are considered as one of the best-dressed professionals. Whereas in some countries like Canada the uniform for lawyers is a red and white dress.  But in most of the countries, the dress code is white and black. In some European countries, the lawyer uses a traditional black-winged jacket over their dress. In countries like India, both men and women lawyer follow this dress code. Most of the lawyer across the globe wear formal wear in white and black combination.

A white shirt and black trousers and a coat with a white neckband are common attire for lawyers. We often wonder about the logic behind the black and white dress code. There is a reason behind it, we will discuss it in the following article.

The history of the black coat dates back to the 17th century

The origin of the black and white dress code lies in the 17th century. The black and white color is not chosen randomly. There is a valid logic behind the black and white color code for the lawyers. In February of 1685, King Charles II died. People began wearing a black and white gown to offer to mourn his death. From that time this uniform for lawyers is designed. If we see the previous pictures, we can find people used to wear a wig and a gown that was to award a degree of anonymity to lawyers and judges.  We can find that attire in old photos. Since that time the white and black dress has become an official dress code for the lawyers.

Why Black and White Color ??

There is a reason behind this too. Choosing a black color for the lawyer’s uniform has two reasons. First of all, in the old times, there was no availability of dyes in the large quantity. The purple color was signified to royalty, so the only fabric color left was black. This was the reason why black was an obvious choice. Another reason behind this is black is considered a color of authority and dominance. A person in a black coat looks more powerful and impactful. Also black color represents submission to a certain thing. As priests wear a black coat to show their submission to God, lawyers wear the black outfit to show their submission to justice. Black is a prominent color that offers sheer elegance. It is observed that people wearing black outfits look more impactful and elegant.

Lawyers wearing a black coat look extremely elegant and powerful.  

The other color white is chosen for its pure feel. The white color signifies goodness, innocence, and purity. In every legal battle, a lawyer is the only hope of justice for every individual. This color of hope is chosen to make individuals believe in the judicial system. In Indian judicial system wearing a black coat or robe over a white shirt and a white neck, the band is mandatory as this system is influenced by British rulers. There is an /advocate’s Act of 1961 which states every lawyer should wear a black robe or coat with a white shirt and a white neckband.

Why a white neckband? Is there any specific reason?

In countries like India, not only a black coat and a white shirt symbolizes an advocate but a small neckband makes a lawyer recognizable. Every lawyer in the judicial system wears a white neckband. The white neckband is reserved only for the lawyers. So what makes it so important to use a white neckband?

The white neckband on the layer’s shirt also has its origin in England. In the old courts of England, the barristers used to wear these as a part of their uniform. This style was adopted by the Indian lawyers as the Indian judicial system is influenced by the British judicial system. A lawyer’s neckband is a white piece of cloth where two white cloth bands are joined together. These two bands represent the tablet of law and tablets of stone.  This is designed according to Christian belief. These were used by Moses that inscribed ten commandments that are adapted from a burning bush on Mt. Sinai. The neckband is considered as the first example of a uniform code law. The shape of a lawyer’s white neckband represents the laws of God and men

Wearing appropriate clothes in a courtroom is extremely important. The judicial system is considered as one of the most respectable system so showing respect to the system and the people involved in the system gets essential. In almost every country except the USA, it is extremely important to follow a particular dress code in a courtroom.  In USA participants in the civil proceeding have a lot of flexibility in their dressing. Even though there is not the freedom to dress up as you want. The most important thing to note is the judges in the courtroom can throw you out of the courtroom if you dress up inappropriately. This is the reason why not only lawyers but every individual who participates in the court should follow a certain dress code. The basic rule for dressing is to dress up conservatively. Wearing casual and shabby clothes in the courtroom is considered as disrespect to the law.

Depending on the reason why you are summoned to court a solid black or navy suit with a formal white shirt and a tie will pass through any judge’s standards. A negative dress up will leave an impact on what the juries think about you. 

This blog was originally shared at Legodesk