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The Supreme Court on Friday registered a suo motu case for evolving a mechanism to ensure that cheque bouncing cases under Section 138 of the Negotiable Instruments Act (NI Act) are adjudicated expeditiously.
The Bench of Chief Justice of India SA Bobde and L Nageswara Rao opined that various duty holders such as banks, police, and legal services authorities were necessary to be heard during the process.
The Court therefore directed the Registry to register a suo motu criminal writ in the case as "Expeditious trial of cases under Section 138 of N.I. Act, 1881", and appointed Senior Counsel Sidharth Luthra as Amicus Curiae to assist the Court in the matter. Advocate K Parameshwar will assist Luthra.
Notice has been been issued to the Union of India through the Law Secretary, as well as to Registrars General of all the High Courts, Directors General of Police of all States and Union Territories, and the Member Secretary of the National Legal Services Authority. The Reserve Bank of India and the Indian Bank Association, Mumbai have also been impleaded as the representatives of banking institutions.
The order came to be passed in a case of dishonour of cheques which the Bench was hearing. The case had taken seven years for adjudication at the trial court stage and a total of fifteen years across various courts.
This amount of judicial time was used for a case under Section 138 of the NI Act, which requires that the trial be completed summarily within six months, the Court noted.
The amendment to the NI Act that criminalised cheque dishonour, as well as the judicial pronouncements on the same, reflect that the legislative and judicial intent was for the cases to be disposed of expeditiously, the Court noted.
The law requires evidence in these cases to be conducted within three months, trial to be concluded in six months, and as soon as possible, it was noted.
The Bench also noted the high pendency of these cases before district courts across the country. It was noted,
"A recent study of the pending cases, reflects pendency of more than 35 lakh, which constitutes more than 15 percent of the total criminal cases pending in the District Courts."
It added that the main reason for delay in adjudication of such cases was delay in ensuring the presence of the accused in the case. More than 18 lakh cases are pending due to absence of accused, the Court noted.
Despite provisions under the Code of Criminal Procedure (CrPC) and the duty of the police to serve summons, the accused remains absent, leading to delay in the adjudication of the cases, the Court has said.
The Court has identified the important role played by the banks in such cases. It is their responsibility to share details and information as mandated by law to ensure speedy disposal of cases, the order states.
The example of the case of Meters and Instruments Private Limited (supra) was cited. In this case, the Apex Court had directed the banks to give the details of e-mail of the accused to the payee/complainant for service through e-mail.
In this background, the Court has stressed on the need for ensuring the presence of accused in court, even if coercive steps may be required to be used under Section 83 of the CrPC.
Further, the Court has urged the RBI to consider developing a new proforma of cheques to include various other aspects in order to prevent cheques from being used as tools for frivolous litigation.
Another suggestion given by the Court is for the National Legal Services Authority (NALSA) to set up a scheme for pre-litigation settlement of these cases. The order states,
"The National Legal Services Authority, being the responsible Authority in this regard, may evolve a scheme for settlement of dispute relating to cheque bounce at pre-litigation i.e. before filing of the private complaint. This measure of pre- litigation ADR process can go a long way in settling the cases before they come to Court, thereby reducing docket burden."
The Court has also asked the High Courts to set up special and exclusive courts for adjudication of cases under Section 138 of the NI Act, especially in regions with higher pendency rate.
The matter will be heard next on April 16.