Report
The decriminalisation of
this clause could lead to
investors, creditors, traders
and businessmen to misuse
the amendment especially with
payments to msme vendors
thus becoming another
nail in the coffin for small
businesses that are fighting
to survive the pandemic
post-dated cheque. Mr Masand explained how
this action was uncalled for and urged them
furthermore to reconsider their decision and take
into account the following:
1. This unjustifiable move will choke and
strangulate businesses and investments
especially post the Covid Pandemic, thus
creating devastating consequences.
2. The Garment industry works almost wholly
on extended credit terms, ranging from 90
days to 180 days. These are normal and
well-accepted trade terms, and most of this
credit is extended on the basis of Issuance
of Post-Dated Cheque/s payable after
the same period. The risk of selling goods
on credit is possible only because of the
effective, efficacious and deterrent remedies
provided by virtue of Section 138 of the
Negotiable Instruments Act. In the event of
the decriminalisation of this Act, the sanctity
of each transaction will be lost, and the entire
chain of business would be compromised.
3. Over the years this Act has achieved its goals
bringing trust, confidence, faith and assurance that
in case of failure to pay the dishonoured cheque
amount, Section 138 will take its own course. The
provisions of Section 138 instilled hope in CMAI
members, individuals and the business community
at large, helping generate economic as well as
business growth.
4. The proposed Decriminalisation of Section 138
of the Negotiable Instruments Act will likely
encourage mischievous offenders having criminal
tendencies to issue cheques in commercial
transactions casually without worrying about
consequences.
5. In order to carry out the legislative objective of
Section 138, it is absolutely reasonable to make it
more stringent and scrap the proposed move to
set an example in the minds of such offenders that
offences of such a nature will not be tolerated.
6. This Act should be imposed even more strictly in
present times, considering how financial stability
has been impacted and where misuse is likely to
be rampant.
16 I APPAREL I August 2020