Dont collect debt like goons

Written by Indu Bhan | Indu Bhan | Updated: Jun 6 2012, 09:22am hrs
No relief for corrupt babus

The apex court in the case of Narendra Trivedi vs State of Gujarat, said that it would not be appropriate for it to reduce the minimum punishment of six months prescribed for corrupt officials under the Prevention of Corruption Act. It should be borne in mind that the corruption at any level does not deserve either sympathy or leniency. In fact, reduction of the sentence would be adding a premium. The law does not so countenance and, rightly so, because corruption corrodes the spine of a nation and in the ultimate eventuality makes the economy sterile, In this case, the apex court dismissed the appeal of two Gujarat civic body officials convicted for demanding and accepting bribe of R50 from complainant Gajendra Jagatsinh Jadeja. The two officers were arrested and sentenced to rigorous imprisonment for six months by the trial court for demanding bribe for issuing certain property records. The sentence was also affirmed by the Gujarat High Court and the Supreme Court.

Guarantors liable to pay

Maintaining that financial institutions cannot act like goons in recovering debts, the Supreme Court has ruled that a guarantor is liable to pay the loan if the debtor fails to clear it. However, it said that the guarantor/surety holders cannot insist that the creditor must first exhaust all remedies against the principal debtor before recovering debts from them. In view of the provisions of Section 128 of the Indian Contract Act, 1872, the liability of the guarantor/surety is co-extensive with that of the debtor. Therefore, the creditor has a right to obtain a decree against the surety and the principal debtor, the apex court said. In the case of Ram Kishun vs State of UP, Kishun had stood as a guarantor to a bank loan raised by Ganga Prasad, who died without clearing it. The UP government had recovered the loan arrears from Kishun by auctioning his entire stretch of land for R25,000 to recover dues worth R8,500. While the sale consideration was three times the outstanding dues, the balance was not returned to the owner.

Cheque bounce cases

Can a person be tried for cheque bouncing even before the expiry of the 15 days notice period issued by a complainant The issue has been referred to a larger bench by the Supreme Court following conflicting views by it and various high courts. Two questions have been framed for consideration. Firstly, can cognisance of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881, be taken on the basis of a complaint filed before the expiry of the period of 15 days stipulated in the notice required to be served upon the drawer of the cheque And secondly, if the answer to the first question is in the negative, can the complainant be permitted to present the complaint again notwithstanding the fact that the period of one month stipulated under Section 142 (b) for the filing of such a complaint has expired In this case, Yogendra Pratap Singh had challenged the Allahabad High Courts order that quashed the cognisance taken by a magistrate on a complaint filed against Savitri Pandey, who has issued the four cheques which had bounced. Singh had served a notice on September 23, 2008, calling upon her to pay the amount. However, no payment was made till the filing of the complaint on October 7, 2008. The complaint was later quashed by the high court on the ground that the same was premature as it was filed within 15 days of service of notice.

indu.bhan@expressindia.com