Section 138 Make ease of biz

Section 138 – Make Businesses Transparent, Fraud Free

April24, 2018 (C) Ravinder Singh ravinderinvent@gmail.com

 

Special session on Section 138 revealed there are over 16m to 25m Check Bounce cases pending in courts and courts on average take 4-5 years for deciding it. This has greatly reduced ECONOMIC ACTIVITY – CRIPLED Companies engaged in litigation.

 

Way back in 1975 I was responsible for Procurement at BTPS. All multinationals and reputed companies demanded ‘Payment Against Delivery’ or ‘Advance Payment’ but SMEs had to visit BTPS several times to collect tender documents, make bids, be present at the time of opening of bids, collect Supply Orders, Deliver Goods and Collect Payment.

 

India even today prefer ‘CASH PAYMENTS’ for Salary Payment for Contract or Casual Work or in Small Business or Purchase of Goods and Services in majority of the cases but in –

 

USA for half a century all Employees Were REGISTERED, WEEKLY salaries paid by Check, all Utility Bills & monthly installments for services paid by Check. For shopping of more than $10 – Credit Cards were used in 90% cases. Banks issued 1000 Checks on opening account with account holders name and address. Even if one forgets to put account number and drops Pay Check in Drop Box Banks would put the money in right account. ATMs dispensed cash so Bank Clients visit the Bank for Opening & Closing of Accounts. These days most transaction made Electronically.

 

Section 138 in India was being abused for Ensuring Payments for Goods & Services without declaring Goods & Services provided When Buyer Can’t Pay Against Delivery – CHEATING, FRAUDS, MONEYLENDING, MONEYLAUNDERING THRIVED.

 

Examples – 1.] A Congenital Cheat would Promise to get Rs.8 Cr Loan at low interest rate and demand 5% Service Charge – Collect UNDATED Checks worth Rs.40 Lakh, Present Checks without arranging LOAN – initiate Section 138 Case. 2.] A Person would file IT Return showing 10 times real income – Stand Guarantees for Scores of various Loans. 3.] Take New Loans from NBFC to pay for Pending Bank Loans without declaring liabilities. 4.] Bankers go after GUARANTOR than Borrower in most cases.

 

IMPROVED Section 138 – With EXPRESS COURTS

 

1.      GOI should MAKE Registration of All Products & Services Delivered COMPULSORY –

 

2.      Product & Service Provider to get his DUES immediately through Electronic Payment or Check Payment or Bank Draft. Introduce WEEKLY PAYMENT Of Salaries.

 

3.       Banks to FACILITATE PRODUCT & SERVICES BUSINESSES TRANSACTIONS than advancing BIG MONEYS as WORKING CAPITAL or BIG LOANS to ‘VERY LOW VALUE ADDED Businesses i.e. Gems & Jewelry, Trade’ which are better served by NBFCs.

 

4.      Points 1, 2 & 3 shall MINIMIZE WORKING CAPITAL requirements, and

 

5.      Banks to Maintain MINIMUM BALANCE IN CURRENT ACCOUNTS OF MSMEs than BULK Advances of Working Capital or LOW VALUE ADDED Businesses.

 

Ravinder Singh, Inventor & Consultant, INNOVATIVE TECHNOLOGIES AND PROJECTS

Y-77, Hauz Khas, ND -110016, Ind

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