Page 14 - Banking Fiannce March 2018

LEGAL UPDATE

MSME council does not Cheque bouncing may lead to imprisonment
have jurisdiction over The government plans to amend the present law of punishment, making it a
non-bailable offence for defaulters. The Ministry of
debt issues Law and Justice is planning to present the amendment

The apex courtstated in the case of bill-aimed to cut down the pendency of nearly 20 lakh
Bank of India vs cheque bounce cases in India-in the Monsoon Session
Yadav Consultancy of Parliament.
Services, that the A time period would be given to both parties to settle
Debt Recovery Tri- the cases out of court, failing which the defaulter would be sent to jail, and
bunals (DRTs) are strict conditions would be imposed while giving bail.
presided over by people with judicial
experience. The Micro, Small and The Metropolitan Magistrate would first examine the complaint filed under
Medium Enterprises Facilitation Section 138 of the NI Act alongwith the affidavit and supported documents, and
Council has no jurisdiction and it was it is only after its scrutiny, the court will take cognizance and direct issuance of
summons. Though the government and courts are disposing the cases via hold-
the debt recovery tribunal (DRT)
ing special lok adalats at national and district levels, the pendency is still on a
which will decide the issues. More- higher side.
over, in this case, the parties had
submitted to the earlier orders of Companies Act
the tribunals and therefore the com-
missioner could not have challenged The appeal of the Bengal Chemists and Druggists Association was dismissed by
their jurisdiction. the apex court, challenging the order of the National
Company Law Appellate Tribunal, and asserted that
Samsung gets VAT relief the tribunal was well within its power to dismiss the
petition on the ground of delay. It was stated that
from Allahabad HC an appeal against a tribunal order needs to be filed

The Allahabad High Court recently within 45 days and a further period of 45 days may
ruled that be granted at the discretion of the appellate tribunal. The Limitation Act or the
Samsung (In- provisions of the Arbitration and Conciliation Act has no application in the case
dia) Electronics of the Companies Act 2013, the judgment clarified.
is not liable to
pay VAT (value- CBI books RP Info Systems for Rs. 515 cr fraud on
added tax) separately on the mobile Canara Bank and others
phone pack which also contains its
charger. The judgment explained The CBI has booked RP Info Systems and its officials for fraud to the tune of
Rs.515.15 crore on a consortium of banks, and carried out
that the primary intent of the con- searches at the residences of all the accused and the cor-
tract appeared to be the sale of the porate office in Kolkata, said officials. It is alleged that the
mobile phone and the supply of the
directors of the company, Shivaji Panja, Kaustuv Ray and
charger was at best collateral. The
Vinay Bafna, cheated Canara Bank and nine other mem-
predominant intent of the transac-
bers of the banking consortium to the tune of Rs.515.15 crore.
tion must be recognised. The charger
can possibly be purchases separately In a statement, Canara Bank said: "Under the consortium arrangement of 17
banks, Canara Bank financed a working capital limit of Rs.40 crore (4.69%). We
also. However, in case it is placed in
were not the leader of the consortium. The leader bank had already filed a case
a single retail package along with
the mobile phone, the primary intent with the CBI in May 2015. The account had already been treated as fraud by
our bank during October 2015 and reported to RBI. Consequent upon the leader
is the purchase of the mobile phone.
bank relinquishing its role as the leader of the consortium and as directed by
Also, the composite package bears a
CBI (BS&FC), Kolkata, we were authorised by the remaining member banks to
singular MRP, the court pointed out.
file a revised complaint with CBI which we have filed on 26.02.2018."
14 | 2018 | MARCH | BANKING FINANCE