This was reported in "Times of India, dated 20 February'2010, Mumbai edition, page 01".
(read article, as reproduced below)
MY PERCEPTIONS :
1. N.I.Act is not applicable to Blank or Post-Dated cheques.
2. N.I.Act is not applicable to third-party cheques given towards debt repayment of the original debt of another person.
3. Anticipatively, in near future, all institutional (Bank, NBFC, Credit Society, etc...) loan recovery cheques may have to be filed before the "Debt Recovery Tribunal" and may not be covered under the N.I.Act. - OR - even worse, since the loan is not a total debt, then maybe classified as a Civil debt, recovery of which may be filed before the Civil court, to recover the loaned amount.
4. This may be a Judicial ploy to segregate or weed out or reduce the huge backlog of N.I.Act cases, which run into lakhs of cases, just in Mumbai alone.
Keep Smiling .... Hemant Agarwal
Collateral cheques can’t bounce: HC
(reported in "Times of India, dated 20 February'2010, Mumbai edition, page 01")
Mumbai: The Bombay high court has ruled that banks cannot prosecute borrowers under the stringent anti-cheque bouncing laws if blank post-dated cheques issued by them as collateral security are dishonoured.
“It is doubtful if the provisions of Section 138 of the Negotiable Instruments Act can apply to a case in which a blank or post-dated cheque is obtained by a bank or money lender before or while sanctioning or disbursing loan amounts as security for the loan,’’ said Justice P R Borkar. The order is likely to come as a huge setback to lending agencies who ask borrowers to deposit blank post-dated cheques as security.
“Law-makers must not have intended or imagined that money lenders or banks would obtain blank or post-dated cheques while sanctioning/disbursing loans as securities and would use them to make debtors/borrowers repay the loan under threat of prosecution and punishment (under the cheque-bouncing law),’’ added the judge.
The court upheld the acquittal of Ahmednagar resident Rajendra Warma, who was prosecuted after a blank cheque issued by him for a loan was dishonoured.
‘Law is not meant for speedy loan recovery’
Mumbai: The Bombay high court has upheld the all-clear to Ahmednagar resident R a j e n d r a Warma in a blank cheque bouncing case. Ramkrishna Urban Cooperative Credit Society (RUCCS) had given a loan of Rs 2 lakh to Warma in 2000. Warma had issued 10 blank post-dated cheques at that time as security. One of these cheques, dated January 2008, bounced, following which RUCCS lodged a criminal complaint against Warma. The magistrate’s court held that Warma was not guilty under the Negotiable Instruments Act and acquitted him. It also held that while Warma had receipts to prove that he had repaid the entire loan amount in 2005, the bank failed to produce records after 2003.
The object of the law was “to encourage all major transactions, including commercial or business transactions through cheques, and to enforce credibility and acceptability of cheques in settlement of liability in general’’, the court said, adding: “The object was not to provide effective and speedy remedy for recovery of loans.’’