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Supreme Court directs amendments to speed up disposal of cheque bounce cases

The court, while referring the matter to a three-Judge bench for further follow-up, appreciated the work and contribution made by Amicus Curiae, Senior Advocate Siddharth Luthra and Advocate K. Parameshwa.

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ILNS: A five-Judge Constitution Bench of the Supreme Court on Friday issued directions that are expected to speed up trials in cases of cheque bounce, under Section 138 of the Negotiable Instrument Act across India.

The directions range from immediate commencement of enquiry after complaints to procedures of evidence collection and instruction to High Courts to issue practice directions for Magistrates.

The directions issued by the Bench of Chief Justice S.A. Bobde, Justices B.R. Gavai, S. Ravindra Bhat, A.S. Bopanna and L. Nageswara Rao are 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 this Court in Adalat Prasad (supra) and Subramanium Sethuraman (supra) 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 (supra) do 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 by an order of this
Court dated 10.03.2021.
8) All other points, which have been raised by the Amici Curiae in their preliminary report and written submissions and not considered herein, shall be the subject matter of deliberation by the aforementioned Committee. Any other issue relating to expeditious disposal of complaints under Section 138 of the Act shall also be considered by the Committee.

Earlier, the bench had constituted a committee headed by Justice (Retd) R.C. Chauhan, directing it to submit its suggestion, detailing the steps to be taken, after considering all the submissions made by the stakeholders, within three months.

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The court, while referring the matter to a three-Judge bench for further follow-up, appreciated the work and contribution made by Amicus Curiae, Senior Advocate Siddharth Luthra and Advocate K. Parameshwar. The bench listed the matter for further hearing after eight weeks.

9631_2020_31_501_27616_Order_16-Apr-2021

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