NI Act S. 138 Cheque Bounce Cases: Supreme Court issues Comprehensive Directions [Read Judgement]

The Bench of Supreme Court Justices Manmohan and N.V. Anjaria noted that pendency of cheque bounce cases remains staggeringly high, with over 6.5 lakh pending in Delhi, 1.17 lakh in Mumbai, and 2.65 lakh in Kolkata. In Delhi alone, such matters constitute nearly 50% of the trial court backlog. The bench observed that prolonged trials undermine the credibility of cheques as a substitute for cash and place immense strain on the justice system.

To tackle delays, the Apex Court directed that service of summons not be confined to ordinary modes. Summons may also be served dasti (by hand) and through electronic means such as email, WhatsApp, and SMS. Complainants must provide contact details of the accused and file an affidavit of service.

Affective Ways Of Tax Planning for HUF, Partnership Firm and Will - CLICK HERE

District courts have been ordered to set up secure QR code or UPI-based online payment facilities. Summons must inform accused persons that they may directly pay the cheque amount through these links at the initial stage, enabling immediate settlement and early closure of proceedings.

Every Section 138 complaint must also be accompanied by a structured synopsis placed at the top of the file. The synopsis must include details of the parties, cheque particulars, dishonour memo, statutory notice, cause of action, and relief sought. This format is intended to provide magistrates with quick access to case essentials and prevent delays in cognizance.

The Court also revised its earlier compounding guidelines. If the accused pays the cheque amount before defence evidence, no costs are imposed. Payments made after defence evidence but before judgment will attract a 5% cost. If settled at the High Court stage, 7.5% of the cheque amount is payable as cost, while settlement before the Supreme Court will attract 10%.

Complete Referencer of GSTR-1, GSTR-1A, GSTR-3B, GSTR-9 & GSTR-9C - CLICK HERE

Trial courts have also been directed to use powers under Section 143A of the NI Act to order interim deposits where appropriate. Meanwhile, High Courts must ensure physical hearings after service of summons to encourage early resolution, with limited exemptions from appearance.

Additionally, Delhi, Mumbai, and Kolkata district courts must maintain dashboards tracking pendency, disposal rates, and settlement figures, with quarterly reports sent to their High Courts.

The apex court stressed that Section 138 proceedings are quasi-criminal in nature, intended to secure repayment and preserve cheque credibility, rather than impose retributive punishment.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates