SC Directs States to Submit Status Report on Speedy Disposal of Cheque Bouncing Cases


May 18, 2018

The Two-Judge Bench of the Supreme Court yesterday directed the Registrar Generals of all the High Courts to send a report to the Secretary General of the Court about the status of direction(s), issued or proposed by the High Courts for dealing with cases under Section 138 of the Negotiable Instruments Act in the light of the observations made by the Apex Court in the case of Meters & Instruments Private Limited & Anr. v. Kanchan Mehta[1] including the procedure of dealing with the matters ‘on line’.

The Apex Court has directed that the status report by the Registrar Generals may be sent on or before July 15, 2018.

The matter has been next listed for hearing on August 01, 2018.

In the case of Meters & Instruments Private Limited & Anr. v. Kanchan Mehta, the Apex Court had made some remarkable observations regarding dishonor of cheque cases and also issued directions for speedy disposal of cheque cases Section 138 of NI Act.

Speedy Disposal of cases under Section 138 of NI Act

The Supreme Court in the case took a strong note of increasing number of cases instituted under Section 138 of NI Act . The Court also stated that the magnitude of challenge posed by cases filed under Section 138 of the Act, which constitute about 20% of the total number of cases filed in the Courts (as per 213th Report of the Law Commission) and earlier directions of this Court in this regard, it appears to be necessary that the situation is reviewed by the High Courts and updated directions are issued.

Use of modern technology for speedy disposal of cases– The Court took into consideration use of modern technologies for enabling speedy disposal of cases under Section 138 of NI Act  and noted that use of modern technology needs to be considered not only for paperless Courts but also to reduce overcrowding of Courts. There appears to be need to consider categories of cases which can be partly or entirely concluded “online” without physical presence of the parties by simplifying procedures where seriously disputed questions are not required to be adjudicated. Traffic challans may perhaps be one such category.

Atleast some number of Section 138 cases can be decided online. If complaint with affidavits and documents can be filed online, process issued online and accused pays the specified amount online, it may obviate the need for personal appearance of the complainant or the accused. Only if the accused contests, need for appearance of parties may arise which may be through Counsel and wherever viable, video conferencing can be used. Personal appearances can be dispensed with on suitable self-operating conditions.

Other Directions Issued by the Court in the case

  • In every complaint under Section 138 of NI Act, it may be desirable that the complainant gives his bank account number and if possible e-mail ID of the accused. If e-mail ID is available with the Bank where the accused has an account, such Bank, on being required, should furnish such e-mail ID to the payee of the cheque.
  • In every summons, issued to the accused, it may be indicated that if the accused deposits the specified amount, which should be assessed by the Court having regard to the cheque amount and interest/cost, by a specified date, the accused need not appear unless required and proceedings may be closed subject to any valid objection of the complainant.
  • If the accused complies with such summons and informs the Court and the complainant by e-mail, the Court can ascertain the objection, if any, of the complainant and close the proceedings unless it becomes necessary to proceed with the case.
  • In such a situation, the accused’s presence can be required, unless the presence is otherwise exempted subject to such conditions as may be considered appropriate. The accused, who wants to contest the case, must be required to disclose specific defence for such contest.
  • In case the trial is to proceed, it will be open to the Court to explore the possibility of settlement. It will also be open to the Court to consider the provisions of plea bargaining. Subject to this, the trial can be on day to day basis and endeavour must be to conclude it within six months.
  • The guilty must be punished at the earliest as per law and the one who obeys the law need not be held up in proceedings for long unnecessarily.

The entire case can be accessed here.

Related Posts:

Landmark Judgments on Section 138 of NI Act in 2017

Gujarat HC: Use of Technology for Speedy Disposal of Dishonor of Cheque Cases

KNOW THE LAW- Grounds on which a Cheque can be Dishonored

[1] 2018 (1) SCC 560