Challenges to the Judiciary? Why India’s Cheque Bounce Backlog Refuses to Budge

An analysis of the persistent backlog of cheque-bounce cases under Section 138 of the Negotiable Instruments Act, examining why repeated judicial reforms have failed to reduce pendency and why structural changes to the statutory framework may be necessary.

The growing pendency of cheque-bounce cases under Section 138, Negotiable Instruments Act, 1881 (NI Act) reflects more than judicial delay. It exposes the limits of procedural reform where the statutory framework itself continues to incentivise litigation and strain the capacity of trial courts.

Introduction

The Ministry of Law and Justice told Parliament in December 2024 that just over 43 lakhs cheque-bounce cases were awaiting disposal.¹ As of September 2025, Delhi’s District Courts alone were sitting on 6,50,283 pending complaints under Section 138, NI Act, a figure that makes up close to half of all criminal case pendency in the capital’s trial courts.² Mumbai and Kolkata tell a similar story, but on a smaller scale.³

That number should trouble a common person who is suffering from a cheque being dishonoured, but not filing the complaint as being deterred by the backlogs they are watching. Five years earlier, the same courts were sitting on roughly 35 lakh Section 138 matters. In this interval, the Supreme Court did not sit idle; it delivered at least three rounds of comprehensive directions aimed squarely at speeding up these trials, but where it lacked, upon the government or upon the mechanism, for implementation of those guidelines laid down. Due to which the pendency grew anyway. So, the central question is whether procedural reform alone can fix this, or the backlog problem will take over the guideline or mechanism.

The scale of the backlog

The National Judicial Data Grid’s data over the past six years is not encouraging. As of 31 December 2019, the Amici Curiae appointed by the Supreme Court reported that Section 138 complaints made up close to 35.16 lakhs of the roughly 2.31 crores criminal cases pending across trial courts nationwide, in the court’s own words, an intractable problem accounting for close to 30 to 40 per cent of trial court pendency.⁴ In April 2021, the court handed down its first major set of correctives. By December 2024, the government’s own figure placed before Parliament had climbed to 43,05,932, an increase of roughly eight lakhs cases in the very years the guidelines were meant to be working.⁵ The September 2025 metro-wise breakdown, Delhi’s 6.5 lakhs, Mumbai’s 1.17 lakhs, Kolkata’s 2.65 lakhs, is simply the most recent, most granular confirmation of the same upward trend.⁶ However, the latest data on the pendency of cases under Section 138 is not public on any platform; we have to wait for the court or Parliament to provide numbers.

So, anyone claiming the judicial reform project has succeeded now has to explain why the topline number kept climbing through 15 years of judicial intervention rather than falling.

Judicial attempts to solve it

The court’s engagement with this backlog began in Damodar S. Prabhu v. Sayed Babalal H., where the court introduced a graded cost scheme in which the cost payable by the defaulting party increased if settlement was delayed.⁷ Four years later, in Indian Bank Assn. v. Union of India, the court issued further directions to speed up trials, including allowing evidence to be filed through affidavits and simplifying trial procedures.⁸

The most consequential intervention came in April 2021. The Constitutional Bench in Expeditious Trial of Cases Under Section 138 of NI Act, 1881, In re, acting on a suo motu writ petition and a preliminary report from its own Amici Curiae, found that Magistrates were routinely and mechanically converting summary trials into full summons trials without proper reasons, creating long delays, and directed High Courts to issue practice directions to Magistrates to record clear and sufficient reasons.⁹ It also constituted a Committee under Justice R.C. Chavan, a former Judge of the Bombay High Court, to study more structural fixes.¹⁰ That Committee’s 2022 Report proposed dedicated Special NI Courts to be piloted first in the five districts with the worst pendency in Maharashtra, Rajasthan, Gujarat, Delhi and Uttar Pradesh.¹¹

Four years on, in September 2025, the backlog forced the court to give extensive guidelines.¹² In Sanjabij Tari v. Kishore S. Borcar, the Delhi, Mumbai, and Kolkata District Courts were directed to maintain live dashboards tracking pendency, disposal rates, settlement percentages, and average adjournments, with quarterly reports sent to their High Courts.¹³ Summons shall be served through electronic means.¹⁴ Further, trial courts are ordered to set up QR-code or UPI payment links so that an accused can settle the cheque amount, the moment the summons is served, rather than waiting for a full trial to run its course.¹⁵ The court also affirmed the Karnataka High Court’s view that no separate summons is required at the pre-cognizance stage under Section 223, Nagarik Suraksha Sanhita, 2023, removing a procedural step that had itself begun generating fresh litigation.¹⁶

In Gian Chand Garg v. Harpal Singh, the court held that a voluntary compromise between the parties can bring Section 138 case to an end even after conviction.¹⁷

Why pendency persists despite judicial reforms?

The problem lies in the Act structure itself. The courts can make guidelines, but the architecture of the Act generates so much litigation that it causes delays in the trial. It requires careful examination and reforms, which may be introduced by the legislature through amendments. Therefore, it is important to analyse the specific provisions of the NI Act which are causing high volume of litigation.

Section 138 sits in an uncomfortable space between civil recovery, criminal punishment, and the procedure of summary trials, which later elaborate to trials after 145(2) applications. Though 145(2) applications and allowing evidence/cross-examination are part of natural justice and also appreciated by the Supreme Court in Mandvi Coop. Bank Ltd. v. Nimesh B. Thakore¹⁸. The offence is complete the moment a cheque bounces for insufficient funds, the account is closed, stop payments are made, or the drawer fails to pay within 15 days of a demand notice, or any other kind of endorsement as has been elaborated by the Supreme Court time to time.¹⁹ The entire architecture of the provision is built around recovering money rather than punishing for its own sake.²⁰ Moreover, cheque holders often turn courts into recovery agents by paying minimal court-fees, which in some States are as low as INR 2.²¹ Now, this makes it very easy to file a complaint under Section 138 in the very first instance as a recovery mechanism.

Sections 118 and 139 hand the complainant a presumption in his favour: once execution of the cheque is admitted, the burden shifts to the accused to show the debt was not legally enforceable.²² That presumption is one reason complainants have every incentive to file the odds, at least at the outset, initially run in their favour.

Under Section 143-A, the trial court may ask the accused to pay up to 20 per cent of the cheque amount before the case is decided; however, this comes into force only when, after notice, the accused marks their presence. Moreover, this is not mandatory, but it is at the discretion of the courts.²³ Therefore, in a practical sense, when the service of summons is delayed, and the accused does not appear, this provision does not achieve its intended objective of early interim relief.

Under Section 148, the appellate court may also require a deposit before hearing the appeal against the convictions. These provisions were meant to prevent unnecessary delays, but they also keep money at stake throughout the case. This makes parties more likely to continue the litigation instead of settling the dispute early. Both provisions exist to discourage frivolous defence and appeal, but they also mean every stage of Section 138 case carries real money on the table for both sides, which keeps parties litigating rather than settling early.

A single transaction generates several cheques, which multiply matters further. Each dishonoured cheque has its own cause of action until they arise out of the same course of transaction for the same period of time. The Supreme Court clarified that mere multiplicity of complaints arising out of different cheques dishonoured under the same agreement or transaction under Section 138, NI Act does not constitute abuse of process when statutory requirements are fulfilled.²⁴ Consequently, parallel cases crowd the judicial system, each is queuing to get attention from the courts.

The civil-recovery character of the offence has been debated at the doctrinal level too. In 2018, the court held that Section 258, Criminal Procedure Code, 1973, which allows a Magistrate to stop proceedings mid-way in a summons case, even applies to Section 138 trials, because the object was compensation rather than conviction.²⁵ The Constitution Bench in 2021 disagreed with the point, holding Section 258 inapplicable, without disturbing the broader recovery-first characterisation.²⁶ While this interpretation is doctrinally correct, it has eliminated a mechanism for early termination of proceedings. Disposal is once again dependent upon compounding, mediation, and trial as the principal avenues.

Why pendency persists despite procedural reforms?

The honest answer is that the guidelines have not yet delivered the expected results. The curve of numbers should have flattened; however, it kept climbing.

Service of summons remains the single most cited bottleneck, as identified by the Supreme Court in multiple cases. Banks and financial institutions file a large share of Section 138 complaints. The non-appearance of accused persons hinders the expeditiousness of trials, which is one of the main causes of the backlogs. Due to such high numbers of backlogs, the trial courts are also constrained to give longer dates for hearing the matters.

The adjournment in the trial courts makes the situation worse. In Section 138 cases, the accused has little incentive to hurry proceedings toward a conviction, which leads to a long drift in the case. Consequently, hearing dates are scheduled months apart, causing the case to drift for extended periods. Although Section 147 makes every offence compoundable. But in practice, parties usually only consider it after spending time and money on a trial. Making it only partly successful.

The Special NI Court pilot from September 2022 to August 2023 across five courts in five high-pendency States, with Delhi, reported that it is already operating 72 dedicated NI Act courts. However, there is no sign that it has been implemented beyond five States. The results of the pilot project are not made public. Therefore, it is important to provide data and, if necessary, make it pan-India, even with statutory backing.

The court can explore settlement options at the very first appearance of the parties or upon the receipt of a complaint under Section 138, NI Act.²⁷ However, a case being referred to mediation typically adds 108 days to the total time required to dispose of it. Further, the case being referred to mediation typically adds 3.3 hearings to the number of hearings required to dispose of the case.²⁸ Therefore, the mediation may be more of a delay-causing factor.

Thus, these are the issues that are very complex and require big changes in the system of NI Act cases. Mere giving guidelines would not reduce the cases. Fundamental problems need to be addressed.

Conclusion

So where does this leave the problem. The 15 years of judicial effort, three major rounds of directions, one committee, one pilot project, and the number has still gone up, not down. That is not a small thing to admit, but the data does not really leave room for a softer conclusion. The guidelines were not wrong in what they tried to fix, they were mostly aimed at real bottlenecks, service of summons, mechanical conversion of trials, absence of dedicated courts. The problem is that identifying a bottleneck and actually removing it are two different things, and this article has tried to show that the gap between the two is where most of the backlog is sitting right now.

A few things stand out if one is honest about it. The Special NI Court pilot ran for a full year and nobody has said what came of it, that alone tells you something about how these reforms get treated once the order is passed. Mediation, which is usually assumed to be the easy fix, turns out to add hearings rather than remove them, at least going by the numbers this article has relied on, so pushing every case toward mediation without being selective about it may end up adding to the very problem it is meant to solve. And Section 143-A, on paper a strong tool for early relief, does nothing for an accused who never shows up because the summons never reached him in the first place.

None of this means Sanjabij Tari is a wasted effort. The dashboards it has ordered for Delhi, Mumbai and Kolkata are, if nothing else, a way to actually check the claim being made here in a year’s time, instead of waiting for the next reply in Parliament. But going by everything that came before it, the fair thing to say is that the guidelines have earned some scepticism, not blind faith. Whether the backlog finally starts moving in the right direction will depend less on what the court says next and more on whether anyone follows through on what it has already said.