Dishonouring a cancelled draft is no crime
S. MURLIDHARAN (From Hindu Business Line )
December 27, 2012:
A payee cannot haul a bank under Section 138 of the Negotiable Instruments Act for not honouring a demand draft that is cancelled by the person who got the draft made before being presented to it, held the Delhi High Court in State Bank of Patiala v. Nascent Educational and Development Society. A demand draft, unlike a cheque, is issued by a bank for consideration already received and hence cannot possibly be dishonoured on the ground of lack of funds; but a bank cannot be compelled to honour the draft in the face of a cancellation instruction by the person who got it issued from the bank. The payee, therefore, has no recourse to the bank including proceeding against it under Section 138 of the Act for criminal liability in such circumstances. However, he can proceed against the debtor under the civil laws.
Employer’s gratuity offer must be on a par with Gratuity Act’s
S. MURLIDHARAN
December 28, 2012:
Section 4(5) of the Payment of Gratuity Act allows an employer to offer an employee a gratuity scheme better than the one enshrined in the Act.
An employer can’t in its scheme deny interest on gratuity, already assured by the Act, the Supreme Court ruled in Y.K. Singla v. Punjab National Bank.
The appellant was proceeded against for entering into a criminal conspiracy in granting loan in his capacity as a bank employee. His gratuity was withheld pending completion of the proceedings.
The gratuity he received on acquittal was without interest. The bank contended that according to its scheme, no interest was payable while the proceedings were on. The Supreme Court ordered payment of interest from the date of his retirement in 1996 till the payment of gratuity in 2010.
(The author is a New Delhi-based chartered accountant.)
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