Banking and the law: India - Revision history

Jyoti: /* Lockers */

2023-02-06T21:02:27Z

‎Lockers

Jyoti: /* Lockers */

2018-09-11T20:24:22Z

‎Lockers

Jyoti at 20:23, 11 September 2018

2018-09-11T20:23:25Z

Jyoti: /* CHANGES IN THE PIPELINE (2013) */

2018-09-01T23:36:28Z

‎CHANGES IN THE PIPELINE (2013)

Jyoti: /* Difference in signature */

2017-11-28T20:18:26Z

‎Difference in signature

Pdewan at 20:14, 10 January 2017

2017-01-10T20:14:02Z

Pdewan at 08:20, 19 February 2016

2016-02-19T08:20:39Z

Pdewan at 05:46, 6 February 2014

2014-02-06T05:46:30Z

Pdewan at 05:44, 6 February 2014

2014-02-06T05:44:06Z

Pdewan: Pdewan moved page Bounced cheques to Banking and the law: India

2014-01-26T12:09:28Z

Pdewan moved page Bounced cheques to Banking and the law: India

← Older revision		Revision as of 21:02, 6 February 2023
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	There should be a law to safeguard customer’s right to safety and security, or a convention of secret sharing for confidential information of high importance among more than one person. Of course, the appropriate authority might decide how a secret has to be shared bit by bit.		There should be a law to safeguard customer’s right to safety and security, or a convention of secret sharing for confidential information of high importance among more than one person. Of course, the appropriate authority might decide how a secret has to be shared bit by bit.
		+
		+
		+	=Negotiable Instruments Act=
		+	==Son discharge liability of deceased father/ HC==
		+	[https://timesofindia.indiatimes.com/city/bengaluru/son-must-discharge-dads-liability-if-cheque-issued-in-karnataka/articleshow/97014681.cms January 16, 2023: ''The Times of India'']
		+
		+	BENGALURU: A son is liable to discharge the liability of his deceased father under the Negotiable Instruments Act as a legal representative if the former has issued a cheque, the Karnataka HC observed in a recent order, reports Vasanth Kumar P.
		+
		+	Allowing a criminal appeal filed by Prasad Raykar from Davanagere, Justice K Natarajan pointed out that under Section 29 of the Act, if the legal representative of the deceased has issued a cheque, then he is liable personally.
		+
		+	The judge pointed out that appellant-complainant Raykar stated the accused, BT Dinesh, undertook to repay the amount, paid ₹10,000 and thereafter issued two cheques towards the rest of the amount.
		+
		+	Once the amount was already repaid, the question of taking contention that it is barred debt does not arise and it gets renewed. The accused, who once paid Rs 10,000 by cash and issued cheque to discharge the liability, is liable for discharging the liability of his father," the judge said.
		+
		+	"In this case, the accused is the son of the deceased, who borrowed the loan from the complainant and the accused agreed to repay and issued cheques. As a legal representative of the father, the accused is liable to repay the loan," the judge added.
		+
		+	Dinesh's father, Bharamappa, borrowed Rs 2.6 lakh from Raykar on March 7, 2003, for his business and family necessities, and agreed to pay 2% interest per month by executing a promissory note in favour of the complainant.
		+
		+	After Bharamappa died, the son paid Rs 10,000 to the complainant on June 10, 2005. Later, the interest as well as principal amount was calculated at Rs 4.5 lakh and the accused issued two cheques drawn on Vijaya Bank, Davanagere, for Rs 2.25 lakh each, dated June 7, 2006 and July 7, 2006, respectively. As both cheques got dishonored, Raykar filed a complaint under Negotiable Instruments Act. The trial court directed him to pay the sum to the complainant. Dinesh challenged the verdict before the sessions court, which acquitted him.
		+
		+	[[Category:Crime\|C
		+	BANKING AND THE LAW: INDIA]]
		+	[[Category:Economy-Industry-Resources\|C
		+	BANKING AND THE LAW: INDIA]]
		+	[[Category:India\|C
		+	BANKING AND THE LAW: INDIA]]
		+	[[Category:Law,Constitution,Judiciary\|C
		+	BANKING AND THE LAW: INDIA]]

	= Personal guarantees=		= Personal guarantees=

← Older revision		Revision as of 20:24, 11 September 2018
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	There should be a law to safeguard customer’s right to safety and security, or a convention of secret sharing for confidential information of high importance among more than one person. Of course, the appropriate authority might decide how a secret has to be shared bit by bit.		There should be a law to safeguard customer’s right to safety and security, or a convention of secret sharing for confidential information of high importance among more than one person. Of course, the appropriate authority might decide how a secret has to be shared bit by bit.
		+
		+	= Personal guarantees=
		+	==SC: Banks can invoke personal guarantees==
		+	[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F08%2F15&entity=Ar00502&sk=0D7269E2&mode=text Dhananjay Mahapatra, Agust 15, 2018: ''The Times of India'']
		+
		+
		+	''Scraps Order Of Company Law Tribunals''
		+
		+	Spelling trouble for industrialists whose personal guarantees helped corporate entities owned by them get huge loans only to later default, the Supreme Court has ruled that banks can act against guarantors even as proceedings under the Insolvency and Bankruptcy Code are on.
		+
		+	A bench of Justices Rohinton F Nariman and Indu Malhotra allowed an appeal filed by the State Bank of India, which challenged concurrent findings of the National Company Law Tribunal and the National Company Law Appellate Tribunal withholding banks from moving against guarantors. The tribunals held that since the corporate entity was already facing insolvency proceedings, and enjoyed a moratorium under the resolution plan, banks could not move separately against the guarantor.
		+
		+	The NCLAT, which had upheld the order in favour of V Ramakrishnan, MD of Veeson Energy System, had given a broad interpretation of IBC Section 14, holding it barred action against sureties.
		+
		+
		+	''' ‘Liabilities of guarantor and debtor separate’ '''
		+
		+	Challenging the NCLAT decision, SBI counsel Sanjay Kapoor and senior advocate C U Singh for Bharat Cooperative Bank (Mumbai) Ltd argued that a corporate debtor and a personal guarantor were separate entities. A corporate debtor undergoing insolvency proceedings under IBC did not mean a personal guarantor was also undergoing the same process and should enjoy immunity.
		+
		+	“As the guarantor’s liability is distinct and separate from that of the corporate debtor, a suit can be maintained against the surety, though the principal debtor has not been sued,” Kapoor said. Singh added that Section 14 spoke only of corporate debtors and not about guarantors.
		+
		+	Amicus curiae and senior advocate K V Vishwanathan said the idea behind Section 14 was that there be no stay of proceedings against the guarantor while the corporate debtor faced insolvency proceedings.
		+
		+	Writing the judgment for the bench, Justice Nariman said, “Section 14 refers to four matters that may be prohibited once the moratorium comes into effect.”
		+
		+	“A plain reading of the section leads to the conclusion the moratorium can have no manner of application to personal guarantors of a corporate debtor.”

← Older revision		Revision as of 20:23, 11 September 2018
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	[[Category:Crime\|C]]		[[Category:Crime\|C]]

		+	= Bank guarantees=
		+	==Bank guarantee can save property from attachment==
		+	[http://epaperbeta.timesofindia.com//Article.aspx?eid=31808&articlexml=Bank-guarantee-can-save-your-property-from-attachment-02032016017027 ''The Times of India''], Mar 02 2016
		+
		+	Lubna Kably
		+
		+	If there's a dispute over taxes, there's now a way for a company to prevent its property being attached. It can give a bank guarantee to the tax officer to prevent property, such as a factory, from being attached during the course of a tax assessment.
		+
		+	The Budget proposals provide that a tax official can revoke an order for provisional attachment of the property if the taxpayer furnishes a bank guarantee equal to the fair market value of the property, or of an amount sufficient to protect the interests of the revenue authorities. Within 15 days of receipt of the bank guarantee, or within 45 days if the case has been referred to a valuation officer, the order for attaching the property is to be revoked. This proposal will come in force from June 1, 2016.
		+
		+	Business entities operating in India, often find that their property, such as an office or a factory building, is attached by the tax authorities during the course of assessment. For instance, operations froze at Nokia's manufacturing facility near Chennai after it was attached by tax authorities in 2013. More recently, when Vodafone received a fresh tax demand of Rs 14,200 crore, the notice also said that Vodafone's assets in India could be seized if the disputed demand was not paid.
		+
		+	A high-level committee led by Justice Easwar had pointed out that tax officials have the power to provisionally attach a taxpayer's assets, with the permission of higher level authorities, if it was necessary to protect the interests of the tax de partment. Such attachment is supposed to be temporary -six to 24 months. However, in many cases, the taxpayer files a writ, or approaches the Authority for Advance Ruling and obtains a stay on regular assessment. This prolongs the duration of the assessment and the property remains attached causing disruption in business operations.The Budget proposals have taken the recommendations of this committee into consideration.
		+
		+	“The move enabling taxpayers to furnish a bank guarantee will help business houses to continue with their operations. It is a businessfriendly proposal,“ says Gautam Nayak, tax partner, CNK & Associates.

	=Cheques=		=Cheques=

@@ Line 119: / Line 119: @@
 If the matter is referred for conciliation, a third person has to help the parties come to a settlement. Lok adalats function on similar lines. If the disputing parties are unable to settle, the matter can be taken to court again. Banks, however, are not happy with these develop ments. “This is a backward step in terms of recovery mechanism,” says Meenakshi A, head, operations, ING Vysya Bank
 =Difference in signature=
 ==Can invite penal action: Delhi HC==

← Older revision		Revision as of 20:18, 28 November 2017
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	Gupta blamed the company for presenting the cheque for clearance, claiming he had asked them to return the cheques so that he can issue a fresh one. HC rejected these contentions, imposing a punitive fine of Rs 25,000 on Gupta.		Gupta blamed the company for presenting the cheque for clearance, claiming he had asked them to return the cheques so that he can issue a fresh one. HC rejected these contentions, imposing a punitive fine of Rs 25,000 on Gupta.
		+
		+	=Lockers=
		+	== ‘Not simply a landlord and tenant relationship’==
		+	[http://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2017%2F11%2F28&entity=Ar02102&sk=AC849A17&mode=text Atanu Biswas and Bimal Roy, Security of my bank locker: Here are simple geometric solutions to protect valuables or confidential information, November 28, 2017: ''The Times of India'']
		+
		+
		+	In response to a recent RTI, the RBI and 19 PSU banks explained that “the relationship they have with customers with regard to lockers is that of lessee (tenant) and lessor (landlord)”, and no compensation will be given for theft or burglary of valuables in safe deposit boxes of public sector banks as the locker hiring agreement absolves them of all liability.
		+
		+	On one side of the coin, it might be true; the bank does not even know which valuables are kept in one’s locker. However, in a similar case in 2000, judging a revised petition on the ruling of the National Consumer Disputes Redressal Commission, the National Commission held that “the depositors had taken the lockers on rent only because of the security provided by the bank and it is not simply a landlord and tenant relationship”.
		+
		+	Consider the security concern of my valuables deposited in a bank locker. Can anyone give a guarantee of no foul play? There are two keys of a locker, and a depositor cannot access the locker with his key D without the help of the bank because one key B is retained by the bank, and unless both keys are used the depositor cannot open the locker. We are certain that neither D nor B can alone unlock the locker, and D+B can certainly unlock it. But, is there any guarantee that D cannot be reproduced, or there does not exist any other key X which alone or B+X can unlock the locker?
		+
		+	As a generalisation of the locker security issue, we argue that nobody alone should have access to any confidential information of any kind. Here we discuss some simple geometric solutions. Let us consider acase where N persons have keys to some confidential information and at least two persons should collude to access that information. From simple geometry, we know that two points can uniquely determine a straight line, and we would use this to find the keys.
		+
		+	Let us assume that the intercept of the straight line is used to access the information. Suppose each of the N persons is given a random point on the straight line. If any two among them come together, they can easily construct the straight line and find the intercept, which can be used to open the locker or the confidential file. If we want to guarantee that M out of N persons are needed to collude for accessing the confidential information, we might think of a polynomial of degree M-1 instead (a straight line is a polynomial of degree 1). All the N individuals will then be given a randomly chosen point on the polynomial.
		+
		+	If M persons collude, they will be able to construct the polynomial by their M points. No less than M persons will be able to reconstruct the key (for example, for M=2, there are infinitely many straight lines passing through a single point). Such an elegant geometric solution to this problem was given by Adi Shamir, a famous cryptologist from Israel.
		+
		+	Towards further generalisation, we may think of a situation where the manager together with M out of N assistant managers of an organisation, or U assistant managers in the absence of the manager, are eligible to access some confidential information. It is possible to develop suitable keys for such problems.
		+
		+	In another bank-locker problem, the bank may retain one key, and both the husband and wife will have one key each. Either husband or wife, along with the bank key, is eligible to unlock the locker. We may treat the random key B, which is in possession of the bank, as the centre of a circle with prefixed radius, and two randomly chosen points on the circumference of the circle will be the two keys for the husband and the wife. The distance between two points, the bank-key and the key with the husband, would yield the radius of the circle. Same would happen for the key with the wife along with the bank-key. This security feature can be generalised for more than two users as well.
		+
		+	There should be a law to safeguard customer’s right to safety and security, or a convention of secret sharing for confidential information of high importance among more than one person. Of course, the appropriate authority might decide how a secret has to be shared bit by bit.

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-This is a collection of articles archived for the excellence of their content.<br/>You can help by converting these articles into an encyclopaedia-style entry,<br />deleting portions of the kind normally not used in encyclopaedia entries.<br/>Please also fill in missing details; put categories, headings and sub-headings;<br/>and combine this with other articles on exactly the same subject.<br/>
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-[[Category: India |B]]
-[[Category: Law,Constitution,Judiciary |B]]
-[[Category:Name|Alphabet]]
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 =Cheques=
@@ Line 133: / Line 119: @@
 If the matter is referred for conciliation, a third person has to help the parties come to a settlement. Lok adalats function on similar lines. If the disputing parties are unable to settle, the matter can be taken to court again. Banks, however, are not happy with these develop ments. “This is a backward step in terms of recovery mechanism,” says Meenakshi A, head, operations, ING Vysya Bank

@@ Line 25: / Line 25: @@
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-=Banks cannot prosecute if collateral cheque bounces=
+=Cheques=
 [http://epaper.timesofindia.com/Default/Client.asp?skin=pastissues2&enter=LowLevel From the archives of '' The Times of India '' 2010]
@@ Line 41: / Line 78: @@
 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.
-=Cheque bounce: Directors get relief =
+==Cheque bounce: Directors get relief==
 [http://epaper.timesofindia.com/Default/Client.asp?skin=pastissues2&enter=LowLevel From the archives of '' The Times of India '' 2010]

← Older revision		Revision as of 05:46, 6 February 2014
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	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 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.
		+
		+	=Cheque bounce: Directors get relief =
		+
		+	[http://epaper.timesofindia.com/Default/Client.asp?skin=pastissues2&enter=LowLevel From the archives of '' The Times of India '' 2010]
		+
		+	''' Only Those Responsible For Conduct Of Business At Time Of Offence Liable: SC '''
		+
		+	TIMES NEWS NETWORK
		+
		+	New Delhi: The Supreme Court on Monday significantly narrowed down the liability of directors, who have been hounded under the Negotiable Instruments Act for dishonour of a cheque issued by the company.
		+
		+	Upholding the quashing of summons and case against a director initiated by National Small Industries Corporation, a bench comprising Justices P Sathasivam and Justice H L Dattu said not all directors were liable under Section 141 of the NI Act.
		+
		+	“Only those persons who were in-charge of and responsible for the conduct of the business of the company at the time of commission of an offence will be liable for criminal action,” said the bench.
		+
		+	“It follows from the fact that if a director of a company who was not in-charge of and was not responsible for the conduct of the business of the company at the relevant time, will not be liable for a criminal offence under the provisions,” said Justice Sathasivam, who wrote the judgment for the Supreme Court bench.
		+
		+	After discussing the vicarious liability of the managing director and other directors in cheque bouncing cases, the bench laid down guidelines, the broad contours of which are:
		+
		+	It is a complainant’s responsibility to explain how a director was vicariously liable. There is no presumption that every director knows about the issuance of the cheque that bounced.
		+
		+	Under Section 141, criminal liability can be fastened only on those directors who, at the time of the commission of the offence, were in charge of and responsible for the conduct of the business of the company.
		+
		+	Vicarious liability on the part of a person must be pleaded and proved and not inferred.
		+	If the accused is managing director or joint managing director, then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with.

	=What if a cheque bounces? Here's a guide to the legal recourse available to you=		=What if a cheque bounces? Here's a guide to the legal recourse available to you=