Investor Issues
How a Mumbaikar changed a banking law - in 90 days!
A few months ago, a cheque of Rs. 75,000 issued to a Mumbai businessman was repeatedly being returned and he instructed his lawyers to file a case under the Negotiable Instruments Act, 1882.
 
But the businessman, J.P. Vaghani, a partner of J.P. Electronics, a giant consumer electronics distributor in north Mumbai, was aghast at the lawyer's response.
 
"You can no more file the cheque bouncing case in Borivali (suburb) under Section 138 of the Act. It must be filed and fought in Kurla, the location of the bank from where it was dishonoured," advocate Mehul S. Shah advised.
 
This was the starting point of the untiring efforts of 69-year-old Vaghani over the past few months which resulted in a significant amendment to the Act, which got President Pranab Mukherjee's assent vide an ordinance on June 15.
 
"Advocate Shah informed that the new rule was as per a Supreme Court order last year by Justice T.S. Thakur, Justice V. Sen and Justice C. Nagappan. They ordered that a case under Section 138 must be initiated at the place where the branch of the bank on which the cheque was drawn is located," Vaghani told IANS.
 
The bench said: "In this analysis, we hold that the place, situs or venue of judicial inquiry and trial of the offence must logically be restricted to where the drawee bank is located."
 
The judgement became applicable retrospectively - implying that hundreds of thousands of pending cases in various courts around the country would witness inter-state transfers.
 
For Vaghani personally, it meant every time he would have to rush from Borivali to the Kurla court for hearings, seriously affecting his personal and professional life.
 
Moreover, the implications were enormous for the Indian economy, plagued with millions of dud cheque cases every year, he added.
 
Undeterred, Vaghani decided to do something about it and, if possible, get the apex court verdict reversed, but was advised against filing a public suit.
 
Instead, he started researching laws and constitutional literature and various court judgements of dud cheque cases before grabbing the bull by the horns.
 
His son, Rajiv J. Vaghani, explained how his father has been a perpetual crusader for various public causes since four decades and never rests till he gets things set right.
 
"I became aware of the legal complexities. On March 15, I wrote to the law minister of India, referring to last year's judgement, which was tantamount to harassment of the complainants and benefited the accused who issued the dishonoured cheques," Vaghani said.
 
"In such circumstances, if business takes place between Mumbai and Delhi and a Mumbai trader delivers material at Delhi and receives a cheque in Delhi which gets dishonored, then as per recent judgment, the Mumbai trader has to run to Delhi to file a case at the drawee bank's jurisdiction for recovery and again as per the court, dates arise at his own cost leaving all his business at Mumbai," Vaghani's letter stated.
 
He urged the minister to study the reasons behind the court order and initiate steps, including raising the issue in parliament, to revert to the original practice which was operative and undisputed.
 
Vaghani's plea apparently struck the right chord and on April 22, the union cabinet at a meeting chaired by Prime Minister Narendra Modi, cleared the amendment to the Act clarifying the jurisdictional issues for trying dud cheque cases.
 
"The main amendment is the stipulation that the offence of rejection/return of cheque under Section 138 of Negotiable Instruments Act will be enquired into and tried only by a Court within whose local jurisdiction the bank branch of the payee, where the payee presents the cheque for payment, is situated," the cabinet note said.
 
It added that this would increase the credibility of the cheque as a financial instrument and help traders and commerce in general, allow lending institutions and banks to continue extending finance to the economy without worrying about loan default on account of cheque bouncing.
 
This was not all. Owing to the complexities of passing it through the Lok Sabha and the Rajya Sabha, on June 10, the cabinet also decided to promulgate an Ordinance to the effect.
 
The crucial Ordinance was signed and promulgated by President Pranab Mukherjee on June 15 - proving a huge victory for Vaghani's efforts.
 
"However, the government has to clarify the status of those cases which have been returned by the courts and the concerned complainant/s did not re-file them till now at the local jurisdiction of the drawee/accused's bank," Vaghani urged.
 
Of course, the ordinance would have to be approved by both houses of parliament within six months of being promulgated.

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COMMENTS

Vaibhav Dhoka

2 years ago

Many a times judicial pronouncements are whimsical and leads to harassment of plaintiff or complainant.Going to courts in India is like getting self inflicted wound.Lawyers usually drag cases too long and thus plaintiff or complainant gets harassed.Judicial practices require review urgently.

Bulk of pickpockets on Metro are women: CISF
Be careful while travelling on the Delhi Metro as the teenaged girl disguised as a student or a woman carrying a toddler could be a pickpocket. Data collated by the Central Industrial Security Force (CISF), which guards the network, shows that over 95 percent of the pickpockets caught on the network are women.
 
Data shows that of the 149 pickpockets apprehended between January and May, 142 were women. A CISF officer dealing with women pickpockets on the Delhi Metro said that they camouflaged their intentions by clever modus operandi.
 
"There are several groups of woman pickpockets who randomly travel on the Metro. They board a train from one station and get down at the third or fourth one. They repeat this till they zero in on a target," the officer told IANS on condition of anonymity.
 
The officer said that women pickpockets travelling in the Metro are aged between 18 and 40 and nobody can easily detect them as pickpockets.
 
CISF spokesperson Hemendra Singh said that their raiding team had conducted 32 surprise checks between January and May and apprehended 149 pickpockets from the Metro premises.
 
As per CISF data, 354 pickpockets were apprehended in 2014 in 71 raids, while 466 pickpockets were held in 2013.
 
The CISF said that about 300 women pickpockets were held in 2014, while 421 were apprehend in 2013.
 
"We hand over the pickpockets to the Metro police when they are caught red-handed or based on passenger complaints. The CISF also conducts random weekly raids and drives out suspected pickpockets from the Metro premises," Hemendra Singh told IANS.
 
Asked how the pickpockets are identified, he said the CISF had a list of known pickpockets provided by Delhi Police. "We match the photographs of suspicious people with those provided in the list while monitoring CCTV footage."
 
He said another method was monitoring the movement of passengers who seemed to be hanging on in the Metro system without any definite destination.
 
Hemendra Singh said such suspects were also fined Rs.200 or Rs. 250 and warned of strict action so that they do not muster the courage to break the law.
 
The CISF is the designated nodal force for securing the Delhi Metro rail network that has 136 stations.

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Air India enforces stricter baggage rules in UAE
Passengers travelling by Air India and Air India Express from the United Arab Emirates (UAE) would face stricter rules on hand baggage from July 1.
 
"The free allowance for hand luggage would be restricted to eight kg on Air India and seven kg on Air India Express, inclusive of duty free items," Khaleej Times reported on Sunday.
 
"If the baggage weighs more than the free allowance, a fee of 60 Dirhams ($16) per excess kilo would be charged at the gate," said Prem Sagar, manager of Air India and Air India Express in Dubai and Sharjah.
 
"Most other airlines flying to India have already been charging excess baggage at the gates."
 
"Passenger hand baggage is assumed to be around seven to eight kilos whereas people sometimes carry 10-15 kg extra. An aircraft overweighed by two tonnes is not good for the aircraft's safety."
 
So far, UAE passengers flying on India's national carrier and its budget airline have enjoyed the luxury of carrying duty free items beyond the free allowance of hand baggage.
 
However, very often this went up to several kg and became a concern in overloading the aircraft.

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