Directions To Expedite Cheque Bounce Cases : Supreme Court Seeks Status Report From High Courts On Compliance

The directions were as follows :

1. 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.
2. Inquiry shall be conducted on receipt of complaints under Section 138 of the Act to arrive at sufficient grounds to proceed against the accused, when such accused resides beyond the territorial jurisdiction of the court.
3. For the conduct of inquiry under Section 202 of the Code,evidence of witnesses on behalf of the complainant shall be permitted to be taken on affidavit. In suitable cases, the Magistrate can restrict the inquiry to examination of documents without insisting for examination of witnesses
4. 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.
5. 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.
6. Judgments of the Court in Adalat Prasad v Rooplal Jindal and others (2004) 7 SCC 338 and Subramanium Sethuraman v State of Maharashtra (2004) 13 SCC 324 have interpreted the law correctly and we reiterate that there is no inherent power of Trial Courts to review or recall the issue of summons.This does not affect the power of the Trial Court under Section 322 of the Code to revisit the order of issue of process in case it is brought to the court's notice that it lacks jurisdiction to try the complaint.
7. Section 258 of the Code is not applicable to complaints under Section 138 of the Act and findings to the contrary in Meters and Instruments Private Ltd and Another v Kanchan Mehta and others (2018) 1 SCC 560do not lay down correct law. To conclusively deal with this aspect, amendment to the Act empowering the Trial Courts to reconsider/recall summons in respect of complaints under Section 138 shall be considered by the Committee constituted the Court on 10.03.2021

The order was passed by a bench comprising Chief Justice of India SA Bobde, Justices L Nageswara Rao, BR Gavai, AS Bopanna and S Ravindra Bhat in the suo moto case In re Expeditious Trial of Cases Under Section 138 NI Act.

The Bench has asked the Amicus Curiae in the matter Senior Advocate Sidharth Luthra to submit a response to the Committee's report submitted on 17th December 2021.

This was after the Amicus submitted that certain issues have been highlighted in the Committee's report which need to be evaluated and responded to. 

"The report will have to be considered. There are certain issues regarding scope of the survey, manner in which courts have to be added, certain pay scales which have to be seem in terms of all india judges parameters. A response will have to be filed", Mr Luthra said.

The Bench dictated the following order after the proceedings today :

"List after two weeks. Amicus to file response to report of committee in meanwhile. Registrar general of HC's directed to file status report regarding compliance of directions given in order dated 16th April"

Draft Scheme For Expeditious Disposal Through Online Mediation:

The Amicus suggested that a draft scheme for expeditious disposal of cases may be formulated where the pending matters can be put for online mediation

"There's a large number of pendency already, our suggestion is, these cases may be put for online mediation so matters can be resolved. At times what happens is parties want to settle and invariably there's gap within the system. If this scheme is put in place with time bound mediation, number of these cases will be reduced", Mr Luthra said.

The Bench then asked the Amicus to formulate a model scheme which can be examined by the Court.

"Come up with model scheme then we can ask High Courts to replicate or issue schemes on their own. Show the elements of the scheme", Justice Nageswara Rao said.

A constitution bench of the Supreme Court had on 16th April last year issued a set of directions to expedite the trial of cheque dishonour cases under Section 138 of the Negotiable Instruments Act.

The Court had on March 10th last year directed the formation of a Committee under Chairmanship of former Bombay High Court judge Justice RC Chavan to consider steps to be taken for expeditious disposal of cheque bounce cases under Section 138 of the Negotiable Instruments Act.

The Court had found it appropriate to form a committee to consider all the suggestions made in this case and submit a report clearly specifying the steps that must be taken to facilitate an early disposal of these cases through the Country at all levels if Judiciary. The Committee was asked to consult any expert it wishes to in the matter, and submit its report in 3 months of its first meeting.

The Court had asked the Union of India to provide such secretarial assistance including whole time or part time secretary to the Committee, allocate space for functioning of committee and provide for allowances that may be necessary.

It was on March 7 last year that the bench of CJI Bobde and Justice L Nageswara Rao registered the suo moto case to devise methods for expeditious trial of Section 138 NI Act cases.

Case Title : In Re Expeditious Trial Of Cases Under Section 138 of N.I Act