Speedy Disposal of Cheque Bounce Cases: Supreme Court lays down Guidelines [Read Judgment]

Cheque Bounce Cases - Supreme Court - Taxscan

The Supreme Court issued a set of directions to expedite the trial of cheque dishonor cases under Section 138 of the Negotiable Instruments Act.

On March 7, 2020 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.

The Supreme Court set up a panel to suggest specific steps for quick disposal of more than 35 lakh cheque bounce cases across India.

The panel was constituted under the chairmanship of a former Bombay High Court judge, RC Chauhan, the panel has been asked to submit a report in three months suggesting measures to deal with the problem that has been clogging the subordinate courts.

The court had earlier pointed out that cheque bounce cases contributed to about 30 per cent of pendency of cases in the judicial system and when dishonour of cheques under the Negotiable Instruments Act was criminalised in 1988, no judicial impact assessment was done.

The order came from a five-judge bench headed by Chief Justice of India Sharad Arvind Bobde which had last week termed the problem as “grotesque” and said that the Central Government should come up with a law to create additional courts for a particular period of time to deal with dishonour of cheque cases.

A bench comprising Chief Justice of India SA Bobde, Justices L Nageswara Rao, BR Gavai, AS Bopanna and S Ravindra Bhat issued directions.

Firstly, High Courts are to issue practice directions to the Magistrates regarding conversion of summary trial to summons trial.

Secondly, the Magistrates shall hold enquiry before issuing summons to an accused who is residing beyond the territorial jurisdiction of the Court.

Thirdly, evidence on affidavit is permitted for enquiry under Section 202 of the Code of Criminal Procedure.

Fourthly, Suitable amendment to NI Act recommended to allow one trial for multiple cases arising out of the same transaction, notwithstanding the bar under CrPC.

Fifthly, High Courts to issue practice directions to Magistrates to treat service of summons in one case as deemed service against the accused in all other complaints arising out of the same transaction.

Sixthly, the Magistrates have no inherent power to review or recall issues of summons. Section 258 CrPCis not applicable to proceedings under Section 138 NI Act.

Seventhly, Section 258 CrPC is not applicable to proceedings under Section 138 NI Act.

Eightly, suitable amendments recommended to empower the Magistrate to recall and issue summons.

The bench had also observed prima facie that the Central Government has the obligation to create additional courts to ease the burden created on the judicial system by the Negotiable Instruments Act, as per the mandate of Article 247 of the Constitution.

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