Report
Letters to Hon'ble Finance/Textile
Ministers for Decriminalisation of
Section 138
CMAI Vice President, Rajesh Masand recently wrote a letter to Smt Nirmala Sitharaman, Hon'ble
Finance Minister and Smt Smriti Zubin Irani, Hon’ble Textile Minister after recent media reports
suggested that Government was considering Decriminalisation of Dishonouring of Cheques under
Section 138 of the Negotiable Instruments Act
One of the largest Associations with
approximately 4,000 Manufacturers and
20,000 Retailers, CMAI is also one of the
oldest Associations in the Industry, having been
established in 1963. On behalf of the Members
of the Domestic Garment Industry of India,
CMAI expressed its shock and dismay of the
Government’s decision of decriminalisation of
Section 138 under the Negotiable Instruments
Act, pointing out to them that under the current
Covid-19 pandemic an economic crisis was most
likely to follow. An inevitable part of the crisis
would also include the inability of businessmen to
stick to their financial commitments and honour
cheques issued by them.
While under normal circumstances if a
deterrent dishonoured his cheques, this could
be taken as grounds for the affected party to
issue a notice under Section 138 and charge the
opposite party with a criminal offence. However,
with the decriminalisation of this clause, investors,
creditors, traders and businessmen could misuse
the amendment especially with payments to
MSME Vendors. Therefore this decriminalisation
will just become one more nail in the coffin for
small businesses that are today fighting to survive
the massive impact of this Economic shutdown,
the lasting effect of which will most likely be seen
in the next 12 months.
Mr Masand urged the Government in the
letter to understand the situation of small MSME
members who will be left helpless in the hands
of unscrupulous businessmen who may not play
fair and lure MSME Vendors with the safety of a
APPAREL I August 2020 I 15