RBI’s recent circular on cheque alterations—which can result in dishonoured cheques—may contravene certain sections of the Negotiable Instruments Act, say legal experts
Banking regulator Reserve Bank of India’s (RBI) circular which stipulates that clearing bank branches can return a cheque if it contains any alterations (despite the issuer countersigning amendments) except the date, may end up in a legal tussle.
Yesterday, Moneylife had reported on how the RBI has issued a new circular which stipulates that banks can return cheques that alter anything other than the date. (See here).
In its circular dated 22 February 2010, RBI states, “No changes/corrections should be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee’s name, courtesy amount (amount in figures) or legal amount (amount in words), etc., fresh cheque forms should be used by customers.” If there are any alterations on the cheque, except the date, customers will have to issue a fresh cheque. RBI believes that this move would help banks to identify and control fraudulent alterations.
But according to experts, the new circular possibly violates the Negotiable Instruments Act, 1881.
Legal experts say that in order to implement the circular, the Act has to be amended.
“RBI’s directions are contrary to Section 87 of the Negotiable Instruments Act. Amendments to the Act are necessary to enforce this notification of RBI. The notification cannot override the Act,” said a corporate lawyer, preferring anonymity.
If a cheque is presented to a bank with material alteration without the consent of the person who has issued it, the cheque can be dishonoured.
“If the cheque bounces despite the consent (of the issuer, if he makes any amendment attested with his signature) then it would be a violation of Section 138 of the Negotiable Instruments Act and bankers can face litigation. One cannot issue terms and conditions which contradict the law,” adds the lawyer.
Many ‘imported’ food items at our airports have their prices doctored, many of them make it to these high-priced stalls from the grey market, a few are even downright fakes
You can’t miss them, all over the country, in very pretty and brightly coloured boxes. Confectionary, biscuits, chocolates—all the big brand names. Cadburys, Nestle, Mars, Ferrero Rocher, Perfetti, Mentos, Chupa Chups, Oreo, Lotte, Hershey, Meiji, to just name a few. Some imported, some made in India.
The Indian brand names that used to exist till a few years ago have simply vanished. But that\'s not the real story.
The real story has to do with how we as a nation are being taken for a ride by those bringing in and selling many of these "imported" food items, usually without any adherence to local laws and requirements, and certainly at prices way above what the same product "made in India" costs. The "imported" tag, at work again, apparently. Despite decades of liberalisation.
And it is no secret out on the streets that a lot of all imported items are fake, as any buyer of wristwatches and handbags will tell you. Sellers will fool you if you fall for it. A customer has a choice, fair enough, and if you are in a market where street-legal products are being sold along with other stuff imported by the grey market route, then, well, it seems you have taken a conscious decision.
But what if you are in a no-choice no-option location like a high-security airport? Once in, no way out, and in the rush to get there, you didn\'t bother to get a bite or a drink? Familiar story, right? And all this at inflated prices which have no bearing on reality.
But look closer. Many of these "imported" items will not have any prices written on them, and if they do, then they will have maximum retail prices (MRPs) written either by hand using marker pens, or with cleverly placed stickers.
In addition, these vendors will often write "taxes extra", and charge that amount too, if you ask for a receipt. Very often, the tax information network (TIN) number and value-added tax (VAT) quoted will not be legit either.
And finally, the truth behind many of these grey-market imports is as follows; please believe my shipping background as well as strong nose here:
a) They could be outright fakes, and here, as a little bit of research will show, those Ferrer Roche walnut/coconut "chocolate balls" seem to be particularly popular favourites.
b) They could be from shipments which have been denied entry in other countries for multiple reasons—damage, expiry date, sub-standard classification, "seconds", or stolen.
c) They could be domestic products, double-wrapped in "imported" wrappers, and you wouldn\'t notice it because they\'ve been glued on so well.
Moneylife spotted a few such outlets at Chennai airport a few days ago, and promptly brought it to the notice of the AAI duty manager, who pretended to look very surprised about something happening right under his very nose. We then preferred a written complaint, and await further action.
You, too, can do so. If you are travelling through an airport in India and spot products beings sold at prices above MRP, or products which don\'t have an MRP properly printed on them, or appear to be "imported" but without the markings that certify them street-legal for sale in India, then please register a complaint at the duty manager\'s desk and also let us know at Moneylife, with a copy of the receipt, if possible.