In mid-February, The Economic Times carried a notice under the heading 'Proclamation requiring the appearance of a person accused.' It was issued by A R Soni, judicial magistrate at Pune, seeking the appearance of Parvez Damania, a director of Sahara Airlines and managing director of Agritech Hatcheries Foods Ltd, in his court.
A few months earlier, on September 24, 1999 another notice had appeared in The Times of India -- this time in the case of Living Media vs Business India. It sought the appearance of Hiroo Advani of Business India Publications and was issued by the metropolitan magistrate in New Delhi.
Is it not amazing that these high profile persons cannot be traced by those who have monetary claims against them, i e by those people to whom they issued dud cheques? These are persons who are regularly featured in the media.
Parvez Damania, who shot into prominence when he launched Damania Airlines which set new service standards in the aviation industry, has remained a popular item in the gossip glossies even after his airline went into the red and was sold off. As a director of Sahara Airlines, he continues to make news whether it is his party appearances or his views on aviation. It is only when court officers seek him that he is so consistently unavailable that they have to convince a judge that he is concealing himself to avoid the service of a warrant and have a notice issued.
The Hiroo Advani case is stranger. He is a high profile lawyer and brother of Ashok Advani, publisher of Business India magazine. A weeks after this notice was published in The Times of India, Business India held a glittering bash, attended by all the movers and shakers of society. They included powerful politicians, businessmen and government officials --- but Hiroo Advani is apparently not traceable to his creditors.
While the corporate award from Business India was celebrated by society, the staff of its group ventures have been holding repeated demonstrations to claim their wages from the company. The media group, however, is unfazed by the negative publicity and is busy planning a public issue. Does this not imply that all talk of corporate governance is so much hogwash? After all, who is handing out awards and who is being honoured by their conferment?
The astonishing aspect of the Business India notice is that it was issued by Living Media, another powerful publishing house which brings out magazines such as India Today and Business Today. If Living Media has to resort to public notice in order to get Mr Advani to appear in court, one can only imagine the plight of all those who need to recover money from other defaulters.
The number of victims of cheque bouncing cases run into tens of thousands. In fact, there are almost 40,000 cases in courts around the country which have blocked up several hundreds of crores of rupees. The delay in punishing defaulters allows people to dishonour cheques with impunity. Court notices are ignored and most often officials who are sent to serve notices are allegedly bribed so they report that the defaulter is not traceable.
Some hapless traders based in Mumbai have formed what they call the Cheque Victims Grievances Forum, headed by Vijay Agarwal, Jitendra Parekh and K P Chhabria. The trio has set out a concise set of actions that are needed to tighten procedures and safeguard business. For nearly two years, they have been knocking at the doors of various members of Parliament, the judiciary and the bureaucracy to make them understand that a bounced cheques is often equal to the economic murder of a business/person.
That two years later, court notices are being published to track even the high fliers of the business world, is an indication of how well entrenched are the vested interests who have blocked all efforts of the Forum.
The cheque victims point out that it takes seven years for cases to come up for hearing. Going by the rate at which these cases are disposed off and new ones filed, the system will be so choked that justice, if one may call it that, may be dispensed only 30 years from now. The Forum says the number of new cases filed for cheque bouncing number nearly 20,000 every year.
They have demanded, among other thing, that punishment should be a deterrent. The minimum fine for this offence should be increased to 10 times the cheque amount and the minimum jail sentence should be one year, going up to ten years, depending on the number of cheques bounced or the amount of damage to the creditor. It also demands that false affidavits produced by defaulters should be treated as perjury.
It has also asked for the names of defaulters to be published and circulated through various trade associations. I would suggest the Forum move with the times and turn to the Net to step up action and to create a network. It should take a leaf out of the Chief Vigilance Commissioner's book and create a Website on which to post the names of defaulters.
The site will not only turn into reference material for traders but also help them avoid some potential defaulters, publishing names may embarrass some existing defaulters into cleaning up their act. It will force the government to take the Forum more seriously and turn it into a sort of unofficial watchdog to check duping of businessmen. This would also be less expensive than spending wasteful time in lobbying MPs who are socially close to the big defaulters.
The worst hit by such defaults are consumer finance companies and credit card companies. Both these cannot remain viable unless they find ways to deal with deliberate defaults and have resorted to unorthodox means of recovering their money. Some actually employ the underworld as recovery agents. All have prepared lists of 'high risk individuals' who are not considered favourably for the issue of credit cards or consumer loans. Ironically, these include journalists and lawyers.
So long as businessmen get away with issuing dud cheques, economic growth will continue to remain hobbled.
Cheques Victims Grievances Forum 301, Oriental House 29 Samuel Street, Near Masjid Station (West) Mumbai 400 003. Telephone numbers: (91) (22) 343 6653 / 341 2207. Fax: 341 2208.