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Monday,
May 20, 2002, Chandigarh, India  
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When your
cheque is dishonoured
Reliance
to make open offer for 20 pc in IPCL DSE, BSE to appoint
valuer for merger |
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Inflation
firm at 1.56 pc
One
needs government support to compete
War fear
to jolt Sensex
Capital
gain
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When your cheque is dishonoured THE Supreme Court has done commendable work in exposing the law on dishonour of cheques. There is a unique consistency and rare jurisprudential vision in its verdicts all of which have a proximity to denounce the defaulter and unequivocably splash a message “bouncers beware”. This mindset of the judiciary is a welcome sign. As has been observed by the Supreme Court that in regard to Negotiable Instrument, it has to be kept in mind that the law relating to Negotiable Instrument is the law of commercial world which was enacted to facilitate the activities in trade and commerce making provision of giving sanctity to the instruments of credit which could be deemed to be convertible into money and easily passable from one person to another. In the absence of such instruments the trade and commerce activities were likely to be adversely affected as it was not practicable for the trade community to carry on with it the bulk of the currency in force. The amended provision of the Negotiable Instrument Act 1881 is therefore a cut and paste enactment borrowing from all such laws. For meeting the challenges of globalisation, liberalisation and open market economy a sound cheque system needs to be evolved and this job is being done by our judiciary which does not spare a violator of cheques and whenever it gets an opportunity to dole the hole in this branch of law, it does so unhesitatingly. In India, for several decades, due to lacunae in the law, drawers of bounced cheques used to get away without facing any criminal prosecution. The Government of India therefore amended the Negotiable Instruments Act 1881. However, as is the bane with law breakers, they always tried to find loop holes to wriggle out of sticky situations and the same has been the case of drawers of bounced cheques. An unscrupulous bouncer of the cheque would now not be spared of by untenable assumptions and he would ultimately be roped-up on account of the various “presumptions” which are available in the provisions of the Act to meet such contingencies. In this article, I shall deal with role of “presumptions” on the offences under the Act. On “Presumptions” the Supreme Court in the case of Pankah Mehra V/s State of Maharashtra RLW 2000 (2) SC 204 has held that the court has to presume that the cheque was received for discharge of a legally enforceable debt until the drawer proves that it was not so. It is a legislative mandate that the court should proceed with this assumption unless the contrary is proved. The presumption of innocence would also not be available to the accused under the provisions of Negotiable Instrument Act. The Supreme Court in the case of MMTC Ltd. vs Mamedchal Chemicals & Pharma (Pvt.) Ltd. ruled that even if the cheque is dishonoured by reason that the payment of cheque had been stopped by the drawer, complaint under Section 138 would still be maintainable because presumption U/S 139 would arise and the court can not quash the complaint on this ground. In this case the court also observed that there is no requirement that complainant must specifically allege in complaint that there was a subsisting liability. Now, very lately the Supreme Court has even touched the limitation aspect of the subsisting debt or liability in the case of AV Murthy V/s. BS Nagabasa Vanna 2002 Cr. LJ 1449. It ruled that dismissal of complaint at the threshold on the ground that the amount advanced by complainant to the drawer of cheque was advanced four years back and hence there was no legally recoverable debt is erroneous and it was not proper. Consideration for cheque is presumed under section 118 & 139 of the Negotiable Instruments Act. The dismissal of the complaint on ground that cheque was drawn in respect of a debt or liability, which was not legally enforceable, was illegal. In the supracited verdicts the apex court has irretrievably settled the applicability of “Presumptions” provisions as contained in section 118 and 139 of the Negotiable Instruments Act 1881, as regard the “consideration” and debt or other liability. As has been perceived by the Supreme Court the legislature does not waste its words and ordinarily grammatical and full meaning is to be assigned to the words used while interpreting a provision of law. It is acknowledged that the legislature chooses appropriate words to express what it intends. In this perspective the incorporation of presumptions provisions in this Act is very much with the intention to defeat all the tactical ploy and subterfuge diatribes applied by the malefactors of the cheques and it looks that our Supreme Court is keen to ensure certainty in convicting a bouncer of cheque inspite of the technical loop holes as the accused might put forth from time to time. The rationale as contained in the aforesaid cited cases has injected a conceptual clarity on resorting to the provisions of presumptions whenever an erring drawer of a bogus cheque tries to frustrate the purpose of the Act by advancing untenable assumptions. Not only this but we are fully alive to the imperatives of a sound cheque system and in our anxiety to scare away the offenders, we are providing more stringent deterrents as spelled out in the negotiable Instruments (Amendment)
BIll 2001 introduced in the Lok-Sabha on 24.7.2001. This Bill interalia provides two years imprisonment instead of one year, increases the period for issue notice from 15 days to 30 days, provides discretion to the courts to waive the period of one month for taking cognizance of the case, prescribes procedure for dispensing preliminary evidence of the complainant, prescribes procedure for service of summons by the court, providing for summary trial of cases and making the offence compoundable under the Act. On repeal of the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act 1988 by the Repealing & Amending Act 2001 some confusion was created and some courts refused to entertain new complaints about bouncing of cheques but the Ministry Law & Justice clarified the position on 21.4.2002 and said that bouncing of cheques continued to be an offence under section 138 to 142 inspite of the repeal. It means Government is all keen that bouncing of cheques should not be countenanced.
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Reliance to make open offer for 20 pc in IPCL
Mumbai, May 19 The Union Government last night offloaded its 26 per cent in IPCL, the second largest petrochemicals company, to RIL at Rs 231 per share aggregating Rs 1,490.84 crore. The total investment for acquisition would be funded through internal accruals as the company had a cash flow of Rs 7,000 crore, sources said here. With this acquisition, RIL’s petrochemical production of 11.5 million tonnes per year would increase by over 1.33 million tonnes, Reliance said in a release here today. RIL’s sales of over Rs 58,000 crore would also rise by Rs 5,200 crore, it said adding, IPCL’s 14,000 workers and employees would join the Reliance family.
PTI |
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DSE, BSE to appoint valuer for merger
New Delhi, May 19 “An independent reputed valuer will be jointly appointed by the DSE and BSE to carry out a due diligence and valuation to arrive at networth of the bourse,” DSE President Vijay Bhushan told PTI. He, however, said the merger would depend on the SEBI guidelines for corporatisation that is meant to separate ownership, management and trading rights. SEBI had earlier appointed a panel, headed by a retired judge M. H. Kanya, to look into legal, financial and fiscal issues related to corporatisation and demutualisation of the bourses, including BSE. On the proposed merger between DSE and BSE, Bhushan said the members of DSE would be offered trading membership of the BSE at a concessional rate once they surrender their DSE membership.
PTI
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Inflation firm at 1.56 pc
New Delhi, May 19 The point-to-point price change as measured by Wholesale Price Index
(WPI) was contained, even as there was a drastic over 14 per cent hike in the price of other food articles. The index was near 6 per cent in the previous year.
PTI
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One needs government support to compete He goes on to add “I instantly changed my
mind and decided to go for business studies. I joined the MBA at PAU
and specialised in marketing. It gave me exposure into the world of
big business. Coming from a family of educators, the first time I saw
the inside of an industrial house was as part of practical training
for my B.E degree at Hero Cycles. During my studies I also had a
training stint with the Trident group of industries as well”. How I initiated Luckily for me I was picked up by the Vardhman Group of Industries, while I was studying only during their campus interview. I was placed in the strategic planning cell as a management trainee. Within three months of joining I was offered an interim promotion. However, I had already started dreaming for something big and of my own. Although
Vardhman’s was a pleasant and encouraging experience, yet I wanted
to work independently and experiment my own ideas and concepts. I
decided to resign from there and I did. I took over a sick
manufacturing unit and rechristened it as Aeon, which means something
going to last for ever. Aeon was literally giving practical shape to
my dream. This name had struck me in a dream only and when I found out
the meaning, it appealed me. Beginning phase I
had no big money, usually presumed to be required for starting new
ventures. I had Rs 1.4 lakh only, which was given to me by my father.
In fact it was a gift from my father’s provident fund. My father,
Prof D.V. Jindal is a reputed teacher of the city, who used to teach
English in the local Government College. Major achievement With this modest amount, I started manufacturing two types of sprockets for two specific French Mopeds, MBK and PGT. Within a span of three years I developed 62 types of sprockets used in most of the two wheelers on the roads. Since I needed money, I had to take loan from the bank. I put my residential house as collateral security with the bank and got two term loans. Besides, I also got a working capital of Rs 3.5 lakh from the State Bank of India, which provided me the loan under equity fund scheme. Later I changed to the Lord Krishna Bank. By now I have repaid all the loans and also got my residence released. My annual turnover had already touching Rs one crore and my target for the next year is more than double. My strength I do not believe in recession. If you are confident enough about your products, recession will always sound alien to you, as it sounds to me. I now hope to double my turnover. I have already started direct exports. I am exporting moped and bicycle parts, fasteners and related goods to different countries. Some observations Given my over a decade long experience in the business and industry I have not found much encouragement from the government. In fact the Export policy of the government is not very encouraging. The manufacturers have to earn and improve their technology of their own without any significant support from the government. Even the business and industrial organisations like the CII and the Engineering Export Promotion Council are mainly catering to the needs of the big industry and not the small and the medium enterprises which need more help. One of the greatest moments of my life so far has been when the Thapar Institute of Engineering and Technology invited me in March 2002 to nominate fellow Thaparians to get the entrepreneurship and encourage them for setting up new enterprises. During my recent visit to the United States, I found that it is the common man who formulates policies, programmes and other laws, which is quite contrary to what happens in India. Everything is done by the government. We need government support here to compete with China, Taiwan and other such countries. More over we need to introduce and implement single window system. Future plans My future plans include diversifying into a trading. I want to specialise in the export of brassware, handicrafts and other Indian products. Besides I want to build up partnerships in the foreign countries. I have already established my base in the USA, the Middle East and in the Caribbean. (As told to Naveen S. Garewal)
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by J. C. Anand War fear to jolt Sensex SOME kind of jinx is haunting the stock market. A fortnight back it appeared that the market was reviving. Major companies had reported better-than-expected results. Sensex had gained a 4.8 per cent rise and was up by 161 points. Even when the market closed on May 13, Sensex closed at 3442.49 points. Bajaj Auto had reported excellent results with net profit up by 98 per cent and EPS of Rs 51.21. Then the jinx touched the market again. The terrorist attack on an Army camp in Jammu raised the spectre of Indo-Pak war. Our Prime Minister, who is usually moderate in views, declared that India will soon act. Then there were reports of scams in a number of cooperative banks with Sanjay Aggarwal, CEO of Home Trade, as the chief culprit. As if it was not enough Ketan Parekh, one of the top brokers in Mumbai, was arrested on charges of swindling European Investment Limited of Rs 83 crore. Also Ketan Sheth guilt-edge chief was charged with diverting of Rs 70 crore from Seamen’s Provident Fund. It was but natural for the stock market to move down. The market even ignored the good news that the monsoon had arrived over Andaman and Nicobar Islands on schedule and the forecast was that even this year the monsoon rains would be normal. The El Nino which is reappearing this year will be of low potential and would not cause the kind of havoc it did some years back. The Sensex stood at 333.70 points when the market closed on May 17. I am quite clear in my mind that there would be no war with Pakistan at least till September as the monsoon season is bad for military operations. The USA is also anxious to prevent all-out war between Indian and Pakistan and is excercising a lot of diplomatic influence on both India and Pakistan. There may not be any war during the next three months or so but tension would continue to grip both the countries and the stock market in India. The terrorist activities, however, from Pakistan may even get more intense because of the scheduled Amarnath Yatra in July and of state Assembly elections in Jammu and Kashmir in October. It is futile to expect any substantial rise in the stock market during next five months or so. Even the industry is not doing well except for some sectors like banks, two wheelers and Indian pharma. The forecast is that the year 2002-2003 may not be any better than the previous year The Finance Minister has admitted that 50 per cent of the revenues go toward payment of interest etc. on debts. This is not a good news for Indian economy. An average Indian investor is in a dilemma on where to invest. The bank interest on deposit rates have gone so low that post-income tax return are very meagre. Investment in the stock market is both risky and unrewarding. Subscription to Public Provident Fund is an excellent proposition but the amount that can be invested has its limits. Investment in mutual funds has suffered due to the UTI debacle as well as guilt scams. Perhaps, the best strategy for investment would be to keep your funds in liquid form and to enter the stock market when the market goes down substantially. Be a “contrarian” and invest only in well-managed companies in those sectors of industries which are doing well as well as are expected to do well. The UTI Mastershare also offers good return when invested around Rs 9.30 or so for its Rs 10 face value unit. It has NAV of more than Rs 12 and is likely to pay 10 per cent dividend in October. It is also due for redemption next year. |
by R. N. Lakhotia Capital gain Q: My wife who is a housewife, was re-allotted a residential plot at Panipat by HUDA on 30.12.97, which was initially allotted on 11.10.94 in favour of my cousin. As per the conveyance deed executed on 6.9.2001, the cost of the plot after making payment of other dues by my wife was as under:- a) The price of plot 2,49,799 b) Interest and other dues 97,447 C) Stamp Papers 38,050 Total 3,85,296 The residential plot was sold by her on 6.9.2001 for Rs 3.13 lakh. There does not seem to be any capital gain, however, if any, same may kindly be intimated alongwith procedure to show it in the return. — Mr J. Jaggi, Chandigarh Ans: On the facts stated by you, there is no liability to tax in respect of capital gains accruing to your wife because she is having a capital loss and not capital gain. She is also entitled to the benefit of cost inflation index. You should show this transaction in the Income-tax return. IT rebate Q: A residential plot stands in the name of my wife. I approached the bank for loan of Rs 10 lakh for the construction of house for which I have to submit copies of income-tax returns filed by me, my son who is an employee and my wife who gets income on sale/purchase of shares. My income is from business. Kindly advise who can get the benefit of claiming income-tax rebate and interest paid by us to the Bank on the loan account, whether I, my son or my wife. — Darshan Singh Birdi, Ludhiana Ans:
On the facts stated by you, you alone will be entitled to the benefit of Income-tax rebate and interest in respect of housing loan because you are the owner of the residential plot on which the property is being constructed. Your wife as well as your son will not be eligible to any tax benefit because legally they are not the owners of the property. Tax rebate Q:
I am a Government employee and expect my annual income for the financial year 2002-2003 to be Rs 1,55,000/-. As per the current budget if an employee’s income exceeds Rs 1,50,000/- he is eligible a rebate of 10 per of saving he made. How can I avail a rebate of 20 per cent of saving I made (i.e. is there any means to bring down one’s income by way of donation and let me know the institutions to whom donations to make which are 100% exempted. — Pardeep Singh, Hoshiarpur Ans:
Please remember that when the Finance Bill was passed by the Parliament, the tax rebate @ 10 per cent in the case of tax payers having income over Rs 1,50,000 as per the Finance Bill passed it was enhanced to 15 per cent Thus, for the Financial year 2002-2003 the investments made for tax rebate for all the taxpayers having taxable income in excess of Rs 1,50,000 the rebate will be available @ 15 per cent. In your case to avail tax rebate of 20 per cent you may donate Rs 5,000 to National Defence Fund or Prime Minister’s Drought Relief Fund or National Children’s Fund, etc. etc., so that such donation will result into tax deduction @ 100 per cent which will thus reduce you taxable income to Rs 1,50,000 and therefore, you will be eligible to claim tax rebate @ 20 per cent. |
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“SOMEONE
has rightly said, if one door is slammed shut on you, hundreds others
open. Probably this is what happened with me and may be with hundreds
of other like me, for whom the implementation of the Mandal Commission
recommendations came as a rude shock. After completing Industrial
Engineering from Thapar Institute, I had made up my mind to appear for
the civil services examinations, but for the Mandal Commission
everything changed”, says Mr Vivek Jindal, Chief Executive Aeon
Engineering Enterprises.