"Majority Lawyers Practising In Field Of Cheque Dishonour. Proposed Decriminalisation Would Put At Stake Their Livelihood, Career, Survival": Bar Council Of Maharastra & Goa

After the Delhi Bar Council, the Bar Council of Maharashtra & Goa has placed its "Strong Objection and Protest" to the proposed Decriminalization of Section 138 of the Negotiable Instruments Act. "The proposed Decriminalization will cause enormous suffering, hardship on investors, traders and businessmen at large, who would lose hopes in the judicial and democratic system and which will eventually encourage them to resort to old modes of recovery. On the contrary, proposed Decriminalization will erode public and investors confidence since the entire settled business and trade cycle which works of post dated cheque will be totally hampered", reads their letter to the Ministry of Finance. The Council objects to this attempt of classifying the offence under Section 138 of the Negotiable Instruments Act and terming the same as "Minor Offence", "Merely as Procedural Lapse" and "Minor Non Compliance" as a totally unreasonable and unrealistic approach thereby giving a total go bye to the consistent judicial pronouncements and contrary to the legislative history, intention, statement and objects of the past amendment brought in from time to time to make the same as more and more stringent and deterrent. "The proposed move virtually tends to negate the very basic scope and object of Section 138 of the Negotiable Instruments Act which was brought into action to inculcate the faith and confidence of trading community in the commercial transaction. The proposal is inconsistent with the letter and spirit of the very provisions of the Section 138 of the Negotiable Instruments Act and the amendments therein from time to time. Such a drastic and draconian step by the Government, if implemented, will on the contrary certainly create obstacles, severe impediments in ease of doing business and results will be cascading", it is averred. It is urged that the sentence imposed will be hardly executable if the offence is decriminalised since there are insurmountable hurdles for recovery of the fine imposed by the sentence in absence of fear of imprisonment thereby rendering the judgement to remain on papers only. It would be merely paper order making it mockery of the otherwise entire well established existing system. Execution of the judgment / order after taking its very essence of criminality will be extremely time consuming, tedious, complicated and a rather impossible task in absence of fear of any deterrent punishment as contemplated under the Act. The Execution of the judgment / order will also necessarily involve separate proceedings which will lead to multiplicity of litigation, increase burden on the existing system, costly and time consuming affair. It is contended that existing mechanisms and inbuilt safeguards in The Negotiable Instruments Act are ignored while making the proposal. That the law itself protects the interest of honest and bonafide Drawers /Defaulters at different stages which are as under :i] Section 138(c) in the Negotiable Instruments Act which contemplates issuance of statutory notice before taking any action where the drawer/defaulter is called upon and has the opportunity to arrange the payment of the amount covered by the cheque. It is only when the drawer despite such a notice and despite the opportunity to make the payment within the time stipulated under the statute does not pay the amount that the dishonour would be considered a dishonour constituting an offence under Section 138 of Negotiable Instruments Act will come into play, hence punishable. ii] Furthermore to protect the interest of honest and bonafide drawers Hon'ble Supreme Court has in 3 Judge Bench Judgement in the matter of C. C. Alavi Haji vs. Palapetty Muhammed, reported in (2007) 6 SCC 555 held as under: "17. ............ Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected." iii] Section 147 of the Negotiable Instruments Act already makes offence Compoundable at any stage even without permission of the court ; iv] Accordingly it is pertinent to note that after 2002 amendment, Section 147 of the Act confers implied power on the Magistrate to discharge the accused if the complainant is compensated to the satisfaction of the Court, where the accused tenders the cheque amount with interest and reasonable cost of litigation as assessed by the Court ( This is also reiterated by Hon'ble Supreme Court in Meters & Instruments Private Limited V/s. Kanchan Mehta reported in 2018 (1) SCC 560 ); v] Further the question "as to how proceedings for an offence under Section 138 of the Act can be regulated where the accused is willing to deposit the cheque amount..." was ...

"Majority Lawyers Practising In Field Of Cheque Dishonour. Proposed Decriminalisation Would Put At Stake Their Livelihood, Career, Survival": Bar Council Of Maharastra & Goa

Mehal Jain

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