Section 138 NI Act: Supreme Court accepts Amicus suggestions on special courts to hear cheque bounce cases

The Supreme Court on Thursday accepted the suggestions of amicus curiae to set up special courts to hear cheque bouncing cases under Section 138 of the Negotiable Instruments Act (NI Act) [In Re: Expeditious Trial of Cases under Section 138 of NI Act, 1881]..Senior Advocate Sidharth Luthra and Advocate-on-Record K Parameshwar, who were appointed as amicus curiae in the suo motu case taken up by the Supreme Court to ensure expeditious disposal of Section 138 cases, had submitted a report calling for the setting up of Special NI Courts by the Central government..Today, the Bench of Justices L Nageswara Rao, BR Gavai and S Ravindra Bhat accepted the suggestions..The note submitted by the amicus had suggested that retired judicial officers be appointed to helm these Special NI Courts. This scheme, it was advised, could be tested on a pilot basis in five judicial districts with the highest pendency in the five states with the highest pendency of Section 138 cases - namely, Maharashtra, Rajasthan, Gujarat, Delhi and Uttar Pradesh. The viability of utilising services of retired judicial officers can be examined based on the results of the pilot study, the apex court was informed.Taking this suggestion on board, the Bench today directed the Registrar General of the Supreme Court to communicate its order to the High Courts in the five states/union territories. These High Courts are required to submit affidavit in response to the proposed pilot scheme..In March 2020, the Court had registered a suo motu case for evolving a mechanism to ensure that cheque bouncing cases are adjudicated expeditiously. Then, in April 2021, it had constituted an expert committee to give suggestions for arresting the pendency of Section 138 cases. It had also passed the following directions, among others:The High Courts are requested to issue practice directions to the Magistrates to record reasons before converting trial of complaints under Section 138 of the Act from summary trial to summons trial; We recommend that suitable amendments be made to the Act for provision of one trial against a person for multiple offences under Section 138 of the Act committed within a period of 12 months, notwithstanding the restriction in Section 219 of the Code; The High Courts are requested to issue practice directions to the Trial Courts to treat service of summons in one complaint under Section 138 forming part of a transaction, as deemed service in respect of all the complaints filed before the same court relating to dishonour of cheques issued as part of the said transaction..In the note submitted by the amicus, it was revealed that 20 High Courts had complied with these directions. However, the High Courts of Madras and Sikkim did not comply, and the High Courts of Uttarakhand, Patna and Odisha did not submit action taken reports..The note further highlighted that as of November 8, 2021, there was a pendency of 26,07,166 Section 138 cases. As on April 13, 2022, this pendency increased to 33,44,290. Therefore there was an increase in pendency of 7,37,124 cases in a period of just over five months. It was also stated that NI Act cases contribute to 8.81% of the total criminal cases pending in the courts. Further, 11.82% of the total criminal cases that are stagnating due to appearance/service related issues are NI Act cases..The amicus report had also suggested that Section 138 cases be resolved through mediation, and had advised on the creation of a mechanism to facilitate the same. It had also urged for the creation of a National Portal for Summons for such cases."Amongst the causes of delay in prosecutions is on account of the avoidance of summons by accused, delays in execution of warrants and other dilatory tactics employed by the Accused in ensuring that the trial does not commence. A National Portal for Summons may help tackle with this singular problem of accused invariably residing in different jurisdictions," the amicus report had stated..The apex court on Thursday directed that a pilot study must be conducted by the five High Courts (Maharashtra, Rajasthan, Delhi, Uttar Pradesh and Gujarat) in their five respective districts with highest pendency of NI cases and it also issued guidelines for the said pilot study: 1. Duration: 1 year from 01.09.2022 to 31.08.20232. The study shall be conducted in 25 special courts. One Special Court shall be established in each of the 5 judicial districts which have been identified as having the highest pendency by each of the five High Courts ofthe states(mentioned above) with the highest pendency of NI Act cases. 3. Presiding Officers and Staff: Retired judicial officers and retired courtstaff, preferably those who have retired within the past 5 years, may be employed.4. Identification of requirements like information technology support must be identified by July 2022. Even the contractual terms of employment of presiding officers, human resources and court staff to be completed by July 2022.5. The president officer and all the staff must be paid fixed honorarium for their one year contract period. 6. Training: "The identified judicial officers, who are to preside over the Special Courts, be imparted specialised training. A four-week training programme by the State Judicial Academies on topics of substantive, procedure and evidence law related to the offences under the NI Act shall be conducted for them", the apex court directed. 7. The Special Courts shall adjudicate upon only those cases in which summons have been duly served and the accused has entered appearance through a lawyer or in person. Furthermore, oldest cases must be identified and they must be dealt with in chronological order.8. Identification of cases, advance and weekly list of cases, preparation of list of mediators and the procedure for functioning of courts must be completed by the end of July 2022..The five High Courts are, therefore, directed to file affidavit regarding progress and compliance report on or before 21.07.2022. The case will be listed again on 26.07.2022 to review the further proceeding..[Read Order]