Let me start with an example. Say John a young entrepreneur wants to start a business in Agricultural sector. He had a little exposure to market like from where to buy the products and where to sell them. He had invested a significant amount of money in Marketing his company as an agricultural products trading company. And he gets a customer named Jacob from Coimbatore who wants to buy 100 tons with initial delivery of 20 tons.
Jacob has sent Purchase order and John has replied with invoice for which both parties agreed, with terms as 10% payment at the time of LR copy and remaining before delivery and after verification at the Jacob’s Coimbatore warehouse. Once LR copy is generated and shared with Jacob. Jacob transferred 10% with that goods were delivered at the Comibatore warehouse.
Since Jacob was not available at the time of delivery John was handed over a cheque for the delivery. With the trust John returned after delivering goods and with getting payment as cheque. When John tired encashment of cheque it bounced. When John approached Jacob. He continuously delayed payment. With the help of lawyer John filed complaint and sent notice to Jacob for which he did not reply. And the case is in the court for more than 2 years.
This is the typical business fraud that normally happens with most of the new entrants into the business. According to news article from india today, “there are more than 38 lakh cheque bounce cases are pending before various courts in the country as of October 2008”.
What are the consequences of delaying justice to such cases. From the case above, John stopped doing any business with people who would only want to give cheque as payment.
Let’s analyze how this will affect the economy. John is not the single person who is not affected by delayed judiciary system. It is faced by most of such traders and is it ok to leave such people especially when they are involved in trading of such basic necessity like rice, dal, cereals, maize and all other agricultural products.
What will happen to the agricultural produce from state for example Punjab which produces more rice and state like TamilNadu which requires more rice for consumption. Since there is no trade the price of rice will decrease in Punjab due to which people stop producing rice gradually as from economics that as demand decreases supply decreases and so is the GDP of Punjab decreases.
On the other hand, what will happen in TamilNadu since there is very little rice to consume the price of rice increases making it less accessible converting it from basic need to need where exclusiveness occurs. Again, from economics as demand increases price increases which will eventually lead to inflation of that particular item. With this cascase effect the economy as whole is affected.
In the above case both the parties have followed the rules of offer and acceptance of offer of business laws. Where they initiate negotiation on pricing exchanged purchase order and invoice and finally price is paid as per the accepted terms and conditions. But still the business fails and have cascading effect on economy.
I always see there is deadline, timeline or ETA for every work done. Which is not followed only in judiciary system. Until and unless there is deadline specified for each case filed. That it must be decided within the prescribed time which can be different for different case.
Otherwise people like Jacob and John may affect development of whole country
As it is rightly said from the article ideasforindia “justice delayed is development delayed”
References :
Business Management 