is bold function

You can use to check if the particular item is a bold or not

 

Public Function IsBold(c As Range) As Boolean

On Error GoTo Handler

IsBold = c.Font.Bold

Exit Function

Handler:

If Err.Number = 94 Then IsBold = True

End Function

 

Privileges of a private limited company

Section	Description of the matter
3(1)(iii)	A Private Company need to have Minimum paid-up capital of Rs. 1 lakh as against Rs. 5 lakhs for Public Company.
12(1)	A Private Company can be formed by just two persons as against minimum seven persons required for incorporation of a Public Company.
58A	Deposits taken by Private Company from its members are exempt from the rigors of this Section. As per the provisions of this Section read with rule 2(b) of the Companies (Acceptance of Deposits) Rules, 1975 — amount received from its shareholders by a Private Company (provided the shareholder concerned furnishes at the time of giving the money to the Company, a declaration that the amount is not being given out of funds borrowed or accepted from others) is not included in the meaning of deposit. If the depositor ceases to be a shareholder, the deposits made by him cease to qualify for exemption from the date of such cessation
70(3)	A Private Company need not file Statement in lieu of Prospectus with ROC.
77(2 & 3)	There is no prohibition on a Private Company, which is not a subsidiary of a Public Company, to provide financial assistance to anyone for purchasing or subscribing for its own shares or of its holding Company.
81	A Private Company including subsidiary of a Public Company can issue its further shares to any person in any manner as it thinks best in its own interest
85 to 90	The Provisions of these Sections deals with kinds of share capital and that voting rights should be proportionate to the paid-up capital, prohibiting disproportionately excessive voting rights. These Sections are not applicable to a Private Company unless it is a subsidiary of a Public Company and such Company may issue share capital of any kind and with such proportionate or disproportionate or other voting rights as it may think fit.
108, 109, 110	The provisions of these Sections are about transfer of shares and debentures which shall not prejudice any power of a Private Company under its Articles to enforce the restrictions in rejecting a particular transfer of shares of the Company.
111(13)	The right of appeal to the Company Law Board against rejection of a transfer of shares is not available as long as the Private Company is only enforcing the provisions of its articles in rejecting a particular transfer. It appears from this section that a right of appeal will be available where the rejection is outside the provisions of the Private Company’s Articles. The right of appeal is also available where there is transmission by court sale or sale by other public authority [s. 111(11)]
149	Procedure for obtaining Certificate of Commencement of Business do not apply to a Private Company. A Private Company can commence its business as soon as the Certificate of Incorporation is issued by the Registrar of Companies.
165	Private Company is not required to hold statutory meeting or prepare any statutory report.
170 to 186	The Provisions of these Sections relating to General Meetings applies to a Private Company unless in any particular Section it is specifically expressed that the applicability is not intended or unless the Articles of a Private Company which is not a Subsidiary of Public Company make any other provisions in respect of any of the matters covered by these Sections. Relaxation in the length of Notice for calling General Meeting, contents and manner of Service of Notices, Explanatory Statements, Quorum for meeting, Chairman of meeting, Restrictions of voting rights, etc. can be made to the extent to which the Company makes provisions in its Articles.
192A	Passing of resolution by Postal Ballot is not relevant for Private Company.
198	Ceiling on overall managerial remuneration not applicable to a Private Company. A Private Company, which is not subsidiary of a Public Company, may remunerate those in management, by such higher percentage of profits or in any manner as it may deem fit.
204	Restrictions on appointment of any firm or body corporate to office or place of profit is applicable to a Private Company which is not a subsidiary of Public Company.
220	Only the Member of Private Company which is not a subsidiary of Public Company is entitled to inspect or obtain copies of Profit and Loss Account of the Company .
224(1B)	The ceiling on the number of Companies an Auditor can audit, does not include audit of Private Limited Companies.
252	Minimum Directors for a Private Company is 2 (two) against 3 (three) in case of Public Co.
255 & 256	The Provisions of appointment of Directors and proportion of those who are liable to retire by rotation are not mandatory to a Private Company which is not a subsidiary of a Public Company
257	The provision requiring to give 14 days notice by new candidates seeking election as directors and depositing of certain amount (Rs. 500) are not mandatory for Private Company which is not a subsidiary of Public Company.
259	Central Government approval for increasing number of directors beyond the permissible maximum (presently 12) not required for Private Company which is not a subsidiary of Public Company.
262	The provision relating to manner of filling casual vacancy among directors and the duration of the period of office of those so appointed do not apply to Private Company which is not a subsidiary of Public Company.
263(1)	Appointment of two or more persons as directors by a single resolution can be done by Private Company which is not a subsidiary of Public Company.
264	Filing of consent of candidate for directorship with the Registrar of Companies is not applicable to Private Company which is not a subsidiary of Public Company.
266	Restrictions on appointment of director and subscription to qualification shares are not applicable to Private Company
268, 269	Central Government approval for amendments relating to appointment/re-appointment of a Managing Director/Whole-time Director/not liable to retire by rotation is not required by a Private Company which is not a Subsidiary of a Private Company.
270-273	Requirements of qualification shares holding by directors the time within which the qualification shares to be acquired and filing of a declaration by each director of the qualification shares held, is not applicable to Private Company
274(1)(g)	The disqualificationunder this Section does not include directorships of Private Company
274(3)	A Private Company which is not a subsidiary of a public Company may in its Articles provide special grounds for disqualification for appointment of person for the office of a Director.
275 to 279	The Directorships of Private Companies are not to be considered while calculating the limit on number of Companies in which a person can be director.
283 (3)	A Private Company may in its Articles provide special grounds for vacation of office of a Director .
292A	Provisions relating to formation of Audit Committee are not applicable.
293	Restrictions on certain powers of Board of Directors regarding selling, leasing, remitting or giving time for payments of debts, investing or borrowing moneys, or contributing to charities other than for political purpose are not applicable to a Private Company which is not a subsidiary of a Public Company
295	Restrictions on loans to directors/relatives, etc. does not apply to Private Company
300	No restrictions on interested directors from participating in the proceedings of the Board and exercising their votes are applicable to a Private Company which is not a subsidiary nor a holding Company of a Public Company
309, 310, 311	A Private Company which is not a subsidiary of a Public Company, is free from restrictions on payment of remuneration to the directors or increase in their remuneration. The procedures like filing Form 25C not required in case of Private Company
317	Restriction on period of appointment of managing director/manager for more than 5 years at a time do not apply to Private Company unless it is a subsidiary of a Public Company.
349, 350	Provision relating to the determination of net profits and ascertainment of depreciation shall not apply to a Private Company.
372A	Restrictions on giving loans or guarantees to other Companies or on making investment in the shares of other Companies do not apply to Private Company unless it is a subsidiary of a Public Company.
386, 387, 388	No. of Companies in which a person may be appointed as manager, the remuneration of a manager and the application of Sections 269, 310 to 312 and 317 in relation to managers do not apply to a Private Company unless it is a subsidiary of a Public Company.
409(3)	Powers given to the Central Government to prevent change in the Board of Directors are not applicable to a Private Company unless it is a subsidiary of a Public Company
416(1)	Restrictions on Contract by agents of the Company in which the Company is the undisclosed principal shall not apply to a Private Company which is a not a subsidiary of a Public Company.

 

Subtotal Values

The following are the values in subtotal for a function

 

=SUBTOTAL(function_num,ref)

• Function_num corresponds to the number of the function that you use to calculate the subtotal:

·         1  AVERAGE

·         2  COUNT

·         3  COUNTA

·         4  MAX

·         5  MIN

·         6  PRODUCT

·         7  STDEV

·         8  STDEVP

·         9  SUM

·        10  VAR

·        11  VARP

                               

• Ref is the cell range that you want to subtotal.

 

 

Service Tax on Builders

Please refer CBEC Circular No. 151/2/2012-ST, dated 10-02-2012, 108/02/2009-ST dated 29.01.2009 for taxability of the flats given to landowners and for valuation , please refer section 67(1) (iii) read with rule 3(a) Service Tax (Determination of Value) Rules, 2006.

 

You will get the answer of all your queries.

 

 

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Tax Planning - Tool to Reduce Cost - Indirect Taxes

“Tax planning” needs to be differentiated from tax evasion wherein one suppresses recording his sales/ services or undervalues the same deliberately. Tax planning involves the arrangement of ones affairs in a way in which one can pay the least amount of tax. Surprisingly there is any article on tax planning in indirect taxation though 100’s on direct tax. In India IDT accounts for double the DT if one were to add VAT. In these difficult times when everyone is trying to offer better quality / choice of services/ goods at lower prices and providing value added services, industry and trade may do well to look at this area in greater depth. In this paper an attempt has been made to touch on some possible areas of tax planning and also incidental value adds which may arise due to this exercise.

Tax planning under IDT could be in the following segments:

1.       Claiming an exemption- Small scale [ available upto Rs. 150 lakhs per independent entity manufacturing unbranded/ own branded goods] or Location based exemption which are now on the way out but available in some places. Examining whether services are as per definition or excluded ; in negative list; or exempted fully or partially. Today locating outside India is also an option for reducing costs which large business houses have found useful especially if they have global customers.

 

2.       Deciding on the method of doing business – Dealer, manufacturer, service provider [ centralized registration/ ISD] , through job workers, import with MRP or otherwise. Each would have to be examined on its effect on the final tax/ duty payable.   

 

3.       Deciding on form of organization- The option of being an SEZ, 100% EOU or a domestic unit could be examined. Here the net benefits considering the export incentives, attendant paperwork, ted tape and corruption are all major factors to be considered.

 

4.       Evaluating long term decisions considering the impact of IDT – Transaction structuring is a one time exercise but difficult to change once resources committed. As and when new products thought of being added, the alternatives could be examined.

 

5.       Claiming deduction from payment of tax – credits in the form of ITC [ Input Tax Credit – VAT] or cenvat credit [ Manufacturer/ service provider] Perhaps this is the area where maximum advantage could be possible. Not availing ineligible credits is also a value adder as indirectly it avoids cost of interest and penalty added to time and effort involved in resolving the dispute. Invariably the reduction in cost of goods used is a benefit of credit optimization exercise.

 

6.       Claiming a deduction from value for payment of duty/ tax – Invariably any deduction comes with conditions to claim the same. Hereagain the comparison and whether the IDT can be passed on would be critical to the decision. Decision to go under the regular scheme for those who account all transactions would invariably be advisable to the composition scheme under VAT.

 

7.       Examining the available benefits of doing certain transactions – Getting contract under International competitive bidding entails one to get some benefits in terms of import, local purchases for which oen needs to prepare proper documentation and make applications in time.

 

8.       Examining the benefits available to certain large customers – Certain sections have been given some benefits and like the Defense sector where the possible procurement of goods without payment of customs etc is possible.

 

9.       As an exporter ensuring all alternatives of import and export examined to minimize the cost of materials and maximize benefits as available under the Foreign Trade Policy. Accumulation of credits and their resolution for Exporters could also be a challenge worth looking at.

 

10.   Minimise the disputes and costs of litigation. Being clear on what one is doing avoids the sapping of resources as well as at times confidence of the person.

 

11.   Minimise the possibility of revenue audits [ pay in time and file returns in time] Once audit is fixed minimise the time of departmental audit cost [ interest/ penalty] by being ready.

 

12.   While interpreting laws to ones advantage have a policy of full disclosure in acknowledged disclosure to avoid charges of suppression and consequent penalty and longer period demands.

 

13.   Be updated to take advantage of changing laws. The recent high court decisions on reimbursement of expenses not being taxed, chit funds being out of net,  accommodation, supply of food by hotels not being taxable under service tax are examples of proactive change in billing.

 

14.   ..many more

 While advising/ examining transaction w.r.t. IDT laws the other complementary areas of value addition could be as under:

a.       Advice on integration of IDT to main ERP- Very rarely even large business houses have SAP or other ERP linked to the VAT or Central excise or service tax. Duplication and more importantly manual/ excel errors are likely.

b.      Automation serves purposes of ensuring completeness of entries and ease of getting information. However the block to back dated entries should be built in. The overstaffing or under staffing issues could also be highlighted. 

c.       Management Information Systems do not normally highlight the information on IDT though the same constitutes 20-25% of cost in most organsiations. [ Ratio of purchases to sales should be somewhat equal to the ratio of credits to the total payment due. ] This could be a good preventive as well as corrective check on optimizing credits.

d.      The internal audit to include the areas of IDT check. [ 90% of organizations conducting internal audit do not have IDT in scope!!]

e.      In the IDT review some incidental errors in inventory levels, material usage, reconciliation, job workers stocks, obsolescence would also be incidental information for management.

The organizations which plan for IDT from the starting and when they go for expansion/ large project analysis would find that they are able to be more cost effective. Those who have built in the regular health check in their many models to ensure cost control and reduction would also benefit by the same.    

Madhukar N Hiregange

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How to check whether Tax Audit Applicable

A)   Individual, HUF, Firm  (as sec. 44AD will be applicable)

a)    Gross receipts of Individual carrying Profession exceeds 25 Lakhs or Turnover of any assessee carrying any business exceeds 1 crore, such assessee will be subject to tax audit

 

b)   Turnover < 1crore

1.     turnover  1 crore or less and 

2.     net profit less than 8% and 

3.     total income of assessee more than maximum limit chargeable to tax and

4.     assessee carrying eligible business, assessee will be subject to tax audit

 

c)    If any of  conditions in b) above are not satisfied: Assessee will not be subject to tax audit

 

B)   Other assessee( Company, LLP etc) (as sec. 44AD is not  applicable)

a)    turnover more than 1 crore , assessee will be subject to tax audit

b)   turnover 1 crore or less , assessee will not be subject to tax audit

c)    Applicability of Tax Audit u/s 44AE, 44BB, 44BBB is to be checked.

 

SEC 44AD: Tax audit is compulsory even if turnover less than 1 crore but profit is less than 8% for  

 

a)     "eligible assessee"(Individual, Huf, Firm, not LLP)  

b)     carrying "eligible business"( Manufacture, whole seller, Retailer, job worker, but profession and business of plying , hiring and leasing not covered, ) and 

c)     if the taxable income is  above the minimum limit of taxation. [Sec 44AD(5)] (See sec 44AD for more details)

 

Question  

a) Mr. X has Income the following income in the AY 2013-14

Salary Income                                                                    -              Rs.1,70,000/-

Business Income (T.O.- Rs.30 Lac)                                      -              Rs.   20,000/-

Total                                                                         Rs.1,90,000/-

Will he require to get his accounts audited as per Section 44AD.

 

b) What will be the situation when, he shows business income of Rs.1,90,000/- whose T.O. is Rs.99.00 lac.-- 

c) What will be the situation when, he shows business income of Rs.20,000/- whose T.O. is Rs.99.00 lac.-

 

Answer: As per Section 44AD (5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.

a)     As his total income does not exceeds the maximum amount which is not chargeable to income-tax, he will not liable to tax audit even if profit is less than 8% of turn over.

b)     As his total income does  exceeds the maximum amount which is not chargeable to income-tax, he will be liable to tax audit as profit is less than 8% of turnover and turnover does not exceed 1 crore 

c)     As his total income does not exceeds the maximum amount which is not chargeable to income-tax, he will not liable to tax audit even if profit is less than 8% of turn over.

 

ICAI Revised syllabus of selected papers of Final Courses

Revision of syllabus of Group – I – Paper- 4 - Taxation – Part – II and Group – II – Paper – 7 - Section A: Information Technology of Intermediate (IPC) Course; and Group – II – Paper – 6 Information Systems Control and Audit and Group – II – Paper – 8 – Indirect Tax Laws of Final Course.

As per the decision of the Council taken at its 324th held in March, 2013, it is notified for information of students and the public at large that the examination in the following papers effective from November 2014 examination and onwards shall be held as per the revised syllabus, as specified by the Council in terms of its authority as vested in Regulation 28E (3) and 31(iii) in respect of Intermediate (IPC)/Accounting Technician Examination and Final Examination respectively.

 

Intermediate (IPC) Examination/Accounting Technician Examination (ATE) under Regulation 28E (3) of the Chartered Accountants Regulations, 1988.	Paper 4: Part I : No change Part II: Taxation i.e. Service Tax (25 Marks) and VAT (25 Marks) Paper 7: Section A: Information Technology (50 Marks)
Final Examination under Regulation 31 (iii) of the Chartered Accountants Regulations, 1988	Paper 6: Information Systems Control and Audit (100 Marks) Paper: 8: Indirect Tax Laws (100 Marks)

 

The detailed Revised Syllabi in respect of aforesaid papers of Intermediate (IPC) and Final Examinations are hereby attached for the information of students and general public.

It is clarified that there is no change in the syllabus of remaining papers of Intermediate (IPC) Course and Final Course, except as specified above.

Director,

Board of Studies

Form 15g - if declaration is wrong

In India, We take most of the laws/Rules as granted one & feel we are complying with rules without studying in depth of penalty provisions of law. Indian Income Tax Rules /sections are one of those laws. Most of the people feel or under impression that it is easiest law that any common person understand & can comply on his own without much study. This impression became more these days after introduction of E forms of ITR. This Article is intended to give more idea on how much dangerous to sign and submit Form 15G without knowing the impact of wrong declaration. Recently Income Tax Department has introduced new section - PART A1 in Form 26AS - Annual Tax Statement under Section 203AA of the Income Tax Act, 1961. PART A1 is related to Details of Tax Deducted at Source for 15G / 15H. So Income Tax Department can easily track use & misuse of Form 15G/H like TDS details on line. Form 15G/H is a type of declaration to be filed by an individual or a person (not being a company or the firm) in order to receive certain payments (dividends, interest on securities, interest other than interest on securities, national saving schemes, interest on units) without deduction of tax at source (TDS). Generally Banker will advise depositor to give Form 15G/H whenever new FD is created so that banker can save himself from liability of deducting TDS as per IT Act. Customer (depositor) will be happier to give Form 15G/H to avoid tax. Both are acting without knowing implication of wrong declaration of this Form. Form 15G/H is boon for a person who has Taxable Income less than maximum amount which is not chargeable to income tax. It is boon because he can get his full Interest Income without deduction at source by banker But Form 15G/H becomes a Suicide form for the people who had signed & given to banker ( may be wrongly guided/pursued by manager) if he has Taxable Income in that year ( salary, house property, business Income & other Income). Narrated in the impact part of this article. Difference between Form 15G and 15H Both the Forms are same. The difference is only that Form 15G has to be filed by persons below 60 years of age and Form 15H has to be filed by persons above 60 years of age. Here, the word person refers to individual or person (not being a company or firm). So, HUF and Association of Persons can also use this form. Certain points require strict attention regarding Form 15G/H:- 1) PAN is mandatory for making declaration using Form 15G/H from 01/04/2010. 2) Irrespective of the fact that Form15G/H has been filed or not, such income has to be mentioned under proper head while filing the return. 3) These Forms are deposited in two copies, one of which is forwarded to the IT department. So, the Income Tax Authorities can make further inquiries regarding the same income. 4) It should be deposited at the beginning of each financial year. 5) These Forms should be deposited at each and every branch where the deposit has been made. For example, if you have made deposits at three different branches of Axis Bank, then you have to submit the Forms at each branch separately. 6) These Forms can only be used for payments like dividends, interest on securities, interest other than interest on securities, national saving schemes, interest on units. For other types of payments, these forms cannot be used. 7) These Forms are not applicable for NRIs IMPACT OF WRONG DECLARATION Snap shot of declaration part of Form 15G herewith. Any Wrong declaration in this form will attract Section 277 of Income Tax Act. Since Income Tax Department has modified Form 26AS – Online Tracker of Income, It is adviseable for all assessee especially salaried class to resist themselves "NOT SIGNING" form Form 15G/H. Assessee will be penalized under 277 along with huge penalty for concealment & Interest from day of wrong declaration. Even your source of Income for that Fixed Deposit will be under scruitiny. It is always better to disclose correct Income. LAST but not least, any declaration or filing of Form including ITR will become SUICIDE ACT for people if they commit mistake knowingly or unknowingly. IGNORANCE OF LAW IS NOT ACCEPTABLE. Law is a specialized knowledge. So do act only if you know law in full. CA. Chikkerur C R B.com, MBA, DISA & LLB

Salary earners up to Rs 5 lakh need to file I-T return: CBDT

NEW DELHI: Unlike the past two years, salaried persons earning up to Rs 5 lakh annually will have to file income tax returns, ​Central Board of Direct Taxes (CBDT) said on Monday.

 

The CBDT had exempted salaried employees having total income of up to Rs 5 lakh including income from other sources upto Rs 10,000 from the requirement of filing income tax return for assessment year 2011-12 and 2012-13, respectively.

 

"The exemption was available only for the assessment years 2011-12 and 2012-13...the exemption provided during the last two years is not being extended for assessment year 2013-14," the CBDT said in a statement.Earlier in May, the CBDT had made E-filing of income tax return compulsory for assessment year 2013-14 for persons having total assessable income exceeding Rs 5 lakh. The CBDT said the exemption was given considering paper filing of returns and their processing through manual entry on system. It said the exemption has been not been extended as the facility for online filing of returns has been made "user-friendly with the advantage of pre-filled return forms". These e-filed forms also get electronically processed at the central processing centre in a speedy manner, it said. "Taxpayers are encouraged to file their returns electronically. E-filing is an easy, fast and secure method of filing of income tax return. Moreover, digital signature is not mandatory for these taxpayers...," the ministry added.

 

For filing returns, an assessee can transmit the data in the return electronically by downloading ITRs, or by online filing. Thereafter the assessee had to submit the verification of the return from ITR-V for acknowledgement after signature to Central Processing Centre. The tax department will set up special return receipt counters for salaried tax payers from July 25 to 31 at Pratayakshar Bhawan, New Delhi. "As returns of income above Rs 5 lakh have to be e-filed online mandatorily, the same will not be received at any of these special counters. Only paper return of income upto Rs 5 lakhs can be filed at these counters," the Finance Ministry added. In the past, the special counters operated from Pragati Maidan and Mayur Bhavan.

Get Unique records

Did you know in the excel you can list out the unique records and delete the duplicates. This function is available in ‘Data>>Remove Duplicates’

 

 

 

 

How effective are the Cheque bouncing provisions under negotiable instruments act, 1881?

How effective are the Cheque bouncing provisions under negotiable instruments act, 1881? Introduction: Section 138 to 147 were incorporated in Negotiable Instruments Act, 1881(NI Act) with a view to promote the efficacy of the banking operations and to enhance the credibility of the cheques in business transactions. The NI Act makes the drawer of cheque liable for penalties in case of dishonour of cheques due to insufficiency of funds or for the reason that it exceeds the arrangements made by the drawer. The NI Act also contains sufficient safe guards to protect the drawer of cheques by giving him an opportunity to make good the payment of dishonoured Cheque when a demand is made by the payee. This Article analysis’s the effectiveness or lack of effectiveness of the cheque bouncing provisions. Scheme of NI Act with regard to cheque bouncing Before we get into the main topic, it is necessary to refer to the relevant provisions relating Offence and procedure for filing of complaint under Section 138 of the N I Act. When an offence under the Act is deemed to have been committed An offence under the NI Act shall be deemed to have been committed, if the following conditions are satisfied (Section 138): • Cheque must have been drawn by a person(the drawer) in favour of a payee on his bank account for making payment • Such payment must be either in whole or partial discharge of a legally enforceable debt • Cheque must have been returned by the Banker to the payee or holder in due course due to insufficient balance in the account of the drawer or it exceeds the arrangement he had with the bank, Proviso requires fulfillment following additional conditions • Cheque must be presented within a period of 6 months from the date of cheque or its validity period which ever is earlier. (Cheque validity period is now reduced to 3 months) • The payee or holder in due course must demand payment of the cheque amount by written notice within 15 days of receipt of notice • Such notice must be issued within 30 days from the date of receipt of intimation of dishonour from bank and • The drawer of cheque fails to pay demanded sum within 15 days from the date of receipt of the notice Presumption in favour of holder There is a presumption in favour of the holder of cheque that he received the cheque in discharge of a legally enforceable whole debt or part of the debt, Unless contrary is proved, (Section 139). When cause of action arises for filing a complaint? Once the drawer fails to make payment within 15 days from the date of receipt of notice from the payee, the cause of action arises for filing a complaint on expiry of notice period period. The complaint has to be filed within 30 days from the date of cause of action and in the relevant court of Metropolitan Magistrate or Judicial Magistrate having jurisdiction. Recently the Supreme court in the case of MSR Leathers V S planniappan & Anr, reversed its earlier judgment in Sadanandan Bhadran v. Madhavan Sunil Kumara and held that a payee or holder of a cheque can now issue a statutory notice to the drawer each time the cheque is dishonoured and institute proceedings on the basis of a second or successive statutory notice as well. Section 142 of Act mandates that no court shall take cognizance of the offence unless a complaint in writing is given by the payee or holder in due course as the case may be and such complaint has to be made within one month from the date of cause of action. Amendments to NI Act Now let us examine how the amendments made to NI Act with the insertion of Sections 143 to 147(effective from 06.02.2003) brought strength to deal with certain deficiencies noticed in the Act. Salient features of amendments are as follows:- • Time limit for issuance of notice: It increased the time limit for issuance of notice for demanding payment of dishonoured cheque amount from 15 days to 30 days from the date of receipt of banker’s Memo of dishonour.(Section 138} • Punishment term: Imprisonment term has been extended up to 2 years in place of one year. similarly fine can be levied up to twice the amount of the cheque dishonoured {Section 138} • Mode of service of summons: Approved serving of summons by post/courier approved by session’s court for speedy trial/ prosecution. In case of refusal to receive summon, it shall be deemed to have been duly served on certification by the authorized person of postal dept or courier for this purpose{Section 144} • Evidence on affidavit: Evidence of complainant may be given by him by way of an affidavit and such an evidence can be a basis for issuance of summons. A discretion has been given to court to accept affidavit on evidence and only on request of the accused summon. {Section 145} • Bankers Memo as evidence: Allowed acceptance of Bankers memo of dishonour as prima facie evidence {Section 146} • Compounding of offence: Another notable feature is that Section 147 provides for compounding of the offence which means an escape route is provided for avoiding imprisonment even during the trial. It is evident from the above amendments that the main thrust of these amendments was to provide for a speedy and time bound trial. Courts have been given power to try the offence by summary trial for expeditious disposal of 138 cases and Section 143 states that endeavor shall be made to complete the trial within 6 months from the date of the complaint. How effective is the NI Act after these amendments? Despite existence of well framed law on paper, why the number of pending cases u/s 138 is quite alarming. Let us now look for the possible causes for delay in 138 cases which can be avoided or improved for better result.It is very disappointing to note that cheque bouncing cases are taking at least 3- 5 years just like a civil suit for recovery of money. Thus the very purpose of the NIAct is defeated by the slow process. 1. Recently it is reported in a news paper that about 30% of pending in the country are relatable to NI act cases and violations under MV act which is a cause for huge concern. This is an indicator of the state of affairs. One of the reasons is less number of judicial magistrates in comparison to the increasing number of 138 cases. 2. Banks have been offering loans more liberally and collect post dated cheques in advance and in many of the cases the judgment of the financial capacity is wrong or in their endeavor is to reach targets for loans disbursal 3. In many of the courts, Magistrates are caught in dilemma about as to whether CRPC is to be followed or special provisions of NI act to are to be followed. A discretion has been given to the courts and every magistrate has to exercise such power judiciously. 4. It is noticed that some of the courts still follow the archaic system of for serving of summons which takes at least 6 months while the upper time limit of 6 months is specified for disposal. E-mails /Fax/fast courier are not used for serving of summons and In many cases, the accused manages with the post department dak server and returns the summon resulting in serving of summons second time. 5. Adjournments are granted liberally and no efforts are made to complete evidence and cross examination on the same day. This is the usual practice adopted by the advocate of the accused for mutual benefit. What is the way forward ? Newly inserted provisions of the Act would be rendered nugatory if complaints filed under Section 138 of the Act are not disposed of expeditiously. The judicial system itself is portrayed in poor light, when Section138 cases take 3 to five years before they are finally adjudicated by the Magistrate. • There should be fast track courts to deal exclusively 138 cases. • Number of unfilled vacancies of posts of Magistrates must be kept to the minimum. • The Courts have to be strict in not allowing adjournments to the accused and endeavor should be made to dispose off cases within 6 months from the date of complaint or a maximum period of one year. • Appeals should not be allowed unless the accused gives valid reasons or brings out deficiencies in judgment of lower court. • Frivolous appeals should be dismissed as sufficient safeguards exist to take care of interests of accused. Once fine levied or imprisonment should not be reduced in appeals so that the punishment acts as deterrent. • Amendments should be made to empower Courts to direct accused for deposit of full amount of the cheque before the trial starts as it will compel accused to settle for compounding at the earliest. • Courts must adopt suitable and effective procedure to achieve the objective of the Act. Even the Supreme court in its recent judgments interpreted the provisions and reversed its earlier judgments to strengthen the faith in the NI act and it remarked that any narrow interpretation will benefit offenders and not the payee. Recent trend of Supreme court judgments In the case of Ms. Laxmi Dyechem Vs State of Gujarat & Ors leathers Vs Palaniappan division bench of Apex court set aside the verdict of Gujarat High Court which had held that criminal proceedings for dishonouring of cheque can be initiated only when the cheque is dishonoured because of lack of sufficient amount in the bank account and not in case where a cheque is returned due to mismatch of signature of account holder. In the case of MSR Leathers V S planniappan & Anr , the Apex court reversed its earlier judgment in Sadanandan Bhadran v. Madhavan Sunil Kumara (1998) 6 SCC 514 and held that a payee or holder of a cheque can now issue a statutory notice to the drawer each time the cheque is dishonoured and institute proceedings on the basis of a second or successive statutory notice as well. Conclusion: At a time when the Apex court and other courts have been passing landmark judgments to strengthen faith in cheques, the Inter Ministerial group’s suggestion for settlement of cheque bouncing cases out of court by invoking arbitration and conciliation, Lokadalats on the lines of section 89 of CPC comes as a shocker, Another big road block is likely to come. If suggestions of IMG, are accepted, it may result in going back to the days of filing of suits for recovery of money. Instead of this the Government aught to focus on improving the infrastructure facilities and efficacy of the courts which will facilitate expeditious disposal G. S. Rao Deputy General Manager(Legal) OCL India Limited Tags: Cheque bouncing, NI Act References: Judgments of Supreme court.