Notice issued to Centre, RBI and the likes over need for expeditious disposal of trials under Section 138 of Negotiable Instruments Act

Supreme Court: Taking suo motu cognizance of the issue relating to the expeditious trial of cases under Section 138 of Negotiable Instruments Act, 1881, the bench of SA Bobde, CJ and L. Nageswara Rao, J has issued notice to the Union of India through Law Secretary, Registrar General of all the High Courts, the Director General of Police of all the States and Union Territories, Member Secretary of the National Legal Services Authority, Reserve Bank of India and Indian Bank Association, Mumbai as the representatives of Banking institutions.

The said action of the Court came after noticing that despite many changes brought through legislative amendments and various Supreme Court decisions mandating speedy trial and disposal of these cases, the Trial Courts are filled with large number of pendency of these cases. 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.

Here’s is what the Court suggested whule posting the matter on April 16, 2020 for further hearing:

  • there is a need to evolve a system of service/execution of process issued by the court and ensuring the presence of the accused, with the concerted efforts of all the stakeholders like Complainant, Police and Banks.
  • an information sharing mechanism may be developed where the banks share all the requisite details available of the accused, who is the account holder, with the complainant and the police for the purpose of execution of process. This may include a requirement to print relevant information, viz the email id, registered mobile number and permanent address of the account holder, on the cheque or dishonour memo informing the holder about the dishonour.
  • RBI, being the regulatory body may also evolve guidelines for banks to facilitate requisite information for the trial of these cases and such other matters as may be required.
  • a separate software-based mechanism may be developed to track and ensure the service of process on the accused in cases relating to an offence under Section 138 of N.I. Act.
  • RBI may consider developing a new proforma of cheques so as to include the purpose of payment, along with other informations mentioned above to facilitate adjudication of real issues.
  • a mechanism may be developed to ensure the presence of the accused even by way of coercive measure, if required, taking effect from Section 83 of Cr.P.C. which allows attachment of property, including movable property.
  • an effort may be evolved to recover interim compensation under Section 143A of the N.I. Act as well as fine or compensation to be recovered as per Section 421 of Cr.P.C.
  • 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. An Award passed at the pre-litigation stage or pre-cognizance stage shall have an effect of a civil decree.

“This measure of prelitigation ADR process can go a long way in settling the cases before they come to Court, thereby reducing docket burden.”

  • High Courts may also consider setting up of exclusive courts to deal with matters relating to Section 138, especially in establishments where the pendency is above a standard figure. Special norms for assessment of the work of exclusive courts may also be formulated giving additional weightage to disposal of case within the time-frame as per legal requirement.

The Court appointed Senior Advocate Siddharth Luthra as Amicus Curiae and Advocate K. Parameshwar to assist the amicus curiae in the matter.

[In Re: Expeditious trial of cases under Section 138 of N.I. Act, 1881, Suo Moto Writ Petition (Criminal), arising out of SPECIAL LEAVE PETITION (CRIMINAL) NO. 5464 OF 2016, order dated 05.03.2020]

Join the discussion

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.