Justice Delayed is Justice Denied: Cheque Bounce cases under Sec.138 N.I. Act

A 5-judge Constitution Bench of the Hon’ble Supreme Court of India in a Sou Motu petition has recommended amendments in Section 138 of the Negotiable Instruments Act, 1881 and issued several other guidelines in order to make the Act more efficient in disposing of the cases of dishonor of cheque in a speedy manner since there has been a huge backlog of cases on the matter pending for disposal which is raising questions on the efficacy of the existing laws.

The learned Amici Curiae as appointed by the Apex Court in its preliminary report submitted that total number of criminal cases pending in India as on 31.12.2019 was 2.13 crores, out of which 35.16 lakh cases pertained to Section 138 N.I. Act. He further stated that reasons for backlog of the cases is that there is a steady increase in new complaints every year but the rate of disposal of these cases do not match the rate of institution of new cases.

Facts of the case

A SLP was filed against dishonor of two cheques however, this dispute has been pending for last 16 years. Concerned with the huge number . of backlogs of the cases pertaining to Section 138 N.I. Act at various levels, the Apex Court decided to examine the reasons for the delay in disposal of such cases. Notices were issues in this regard.

Judgement

The Hon’ble Court observed that one of the reasons contributing to the delay of the cases is the conversion by the Trial Courts of complaints of Sec. 138 from summary trials to summons trial without reasons being recorded.

The Apex Court further observed that Trial Court exercising inherent powers under section 143 of the Act and also discharging the accused if the complainant is compensated to the satisfaction of the court is not a good law.

The Apex Court also provided following guidelines for speedy disposal of the complaints raised under section 138 of the Act –

• HC to issue directions to the magistrates to record reasons before converting trials from summary trial to summons trial under Section 138
• Evidence of witnesses on behalf of the complainant to be permitted to be taken on affidavit for the purposes of inquiry under Section 202 Cr.P.C., and also the Magistrate can permit only the examination of documents rather than insisting upon the examination of witnesses.
• Suitable amendments in the Act to include provision of one trial against a person having multiple cases registered under Section 138 committed within a period of 12 months, notwithstanding the restriction given in Section 219 Cr.P.C.
• Trial Courts have no inherent power to review or recall the issue of summons notwithstanding given under Section 322 of CrPC.
• Section 258 Cr.P.C granting power to stop the proceedings is not applicable to the complaints registered under Section 138 of the Act.
• High Courts to issue practice directions to the trial courts to treat service of summons in one complaint forming part of a transaction under Section 138 as deemed to be service in regard to all the complaints filed before the same court pertaining to dishonor cheques issued as a part of the said transaction.

Conclusion

Speedy trial is a Fundamental right as envisaged under Art. 21 of the Constitution of India which grants a person a right to speedy disposal of his case. Time and again the Hon’ble Supreme Court has reiterated the need of speedy trial and its importance in the justice delivery system. Therefore, while keeping this principle in mind the Apex Court has provided the above stated guidelines so that there can be speedy disposal of the backlog cases and also to lay down a better more efficient procedure for future complaints.

Delhi and Chhattisgarh High Courts have already issued practice directions pursuant to this order of the Supreme Court. This clearly suggests that the judiciary is efficiently working to retain its position as the custodian of rights.

The full judgment can be read here.

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