The Supreme Court Friday sought the Centre's response on a PIL seeking quashing of a provision in Negotiable Instruments Act relating to bouncing of cheques, claiming that it was unconstitutional and lakhs of persons, particularly poor were facing harassment.
New Delhi: The Supreme Court Friday sought the Centre's response on a PIL seeking quashing of a provision in Negotiable Instruments Act relating to bouncing of cheques, claiming that it was unconstitutional and lakhs of persons, particularly poor were facing harassment.
A bench of justices R M Lodha and the A R Dave issued notice to the Secretary Department of Financial Services, Ministry of Finance, on the PIL filed by Yeshwanth Shenoy, a Mumbai based advocate challenging the Constitutional validity of Section 138 of the Act.
"It is an important issue which needs consideration," the bench told Attorney General G E Vahanvati who opposed the petition on the ground that it lacked proper data or material to justify the allegations.
The apex court had earlier issued notice to the Law Ministry on the issue.
Shenoy in his petition contended that in cases relating to bouncing of cheques there were differences between "unwillingness to pay" and "inability to pay," as punishment is justifiable only in cases where there is unwillingness and no punishment can be or should be given for inability to pay.
He alleged that persons were taking advantage of this provision in various financial institutions who hold the personal liberty of the debtors in ransom until repayment of a debt.
Claiming that the provision violated personal liberty of a citizen under Article 21, the petition said, "Sec.138 of the Negotiable Instruments Act has miserably failed to pass the test of reasonableness for it does not guarantee liberty to an 'honest drawer' of a cheque who is subsequently hit by a fate of destiny making him unable to pay his debt.
"Sec.138 of the Negotiable Instruments Act is grossly violative of India's international obligations under the International Covenant for Civil and Political Rights, 1966 to which India is a signatory (Ratified by India on 10 April 1979)," it alleged.