posted by Rahul Chimanbhai Mehta Rrg

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. .

by Rahul Chimanbhai Mehta Rrg



from Right to Recall Group http://ift.tt/1N1ekjb

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