March 23, 2015
https://www.facebook.com/mehtarahulc/posts/10152675015831922
How section-138 of Negotiable Instrument in India is being used by lenders to rob borrowers !!
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section-138 of Negotiable Instrument Act says "if X writes a cheque to Y and cheque bounces and Y complains, then X will be imprisoned for upto 1 years or even upto 2 years !! "
.
Now what lenders do is --- when they loan say Rs 1 lakh, then ask borrower to give a cheque of Rs 100,000 or sometimes twice , with NO DATE ON IT !!
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And when borrower fails to repay, the lender writes current date and deposits it and then drags the borrower to the court !!
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And threat of prison is used for repayment of loan or more amount
.
=====
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Solution I propose is
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1. The cheques should have expiry date of 90 dayes after chequebook was issued by bank
.
2. Only CURRENT date should be put on the cheque. i.e. if X gives cheque to Y , then X must put current date and if cheque is undated, then Y must returns it , but Y cannot put date on cheque. Also, if cheque is post dated even by 1 day, then Y must return it.
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3. Jurors should decide if the cheque given was undated or post dated.
.
IOW, section-138 NE-act should be applied ONLY on current-dated or pre-dated cheques and NOT on undated or post-dated cheques.
.
Otherwise, this "imprisonment on failure to pay debt" will create huge poverty and will only benefit naxals and missionaries.
.
https://www.facebook.com/mehtarahulc/posts/10152675015831922
How section-138 of Negotiable Instrument in India is being used by lenders to rob borrowers !!
.
section-138 of Negotiable Instrument Act says "if X writes a cheque to Y and cheque bounces and Y complains, then X will be imprisoned for upto 1 years or even upto 2 years !! "
.
Now what lenders do is --- when they loan say Rs 1 lakh, then ask borrower to give a cheque of Rs 100,000 or sometimes twice , with NO DATE ON IT !!
/.
And when borrower fails to repay, the lender writes current date and deposits it and then drags the borrower to the court !!
.
And threat of prison is used for repayment of loan or more amount
.
=====
.
Solution I propose is
.
1. The cheques should have expiry date of 90 dayes after chequebook was issued by bank
.
2. Only CURRENT date should be put on the cheque. i.e. if X gives cheque to Y , then X must put current date and if cheque is undated, then Y must returns it , but Y cannot put date on cheque. Also, if cheque is post dated even by 1 day, then Y must return it.
.
3. Jurors should decide if the cheque given was undated or post dated.
.
IOW, section-138 NE-act should be applied ONLY on current-dated or pre-dated cheques and NOT on undated or post-dated cheques.
.
Otherwise, this "imprisonment on failure to pay debt" will create huge poverty and will only benefit naxals and missionaries.
.
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