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SUPREME COURT OF INDIA
S.A. BOBDE, CJI., L. NAGESWARA RAO, J.
Makwana Mangaldas Tulsidas - Petitioner
Versus
The State of Gujarat and Anr. - Respondents
Special Leave Petition (Criminal) No. 5464 of 2016
Decided On : 05-03-2020
Dishonour of Cheque - Expeditious trial of cases under Section 138 of N.I. Act, 1881 - Chapter XVII of the Negotiable Instrument Act, 1881, Section 138, Section 144 of the Act, Sections 62, 66 and 67 of Cr.P.C. - The court discussed the legislative intent behind the criminalization of cheque dishonour, the mandates for expeditious trial, the factors contributing to delay, and the need for a coordinated mechanism involving banks, police, and legal services authorities to ensure the expeditious adjudication of these cases.
Fact of the Case:
The case relates to the dishonour of two cheques, leading to a civil suit, which was criminalized in 1988 under Chapter XVII of the Negotiable Instrument Act, 1881. The court noted the prolonged pendency of such cases and the legislative intent to ensure faith in banking operations and provide a strong criminal remedy.
Finding of the Court:
The court found that despite legislative mandates for expeditious trial, the trial courts were burdened with a large number of pending cases, primarily due to delays in ensuring the presence of the accused before the court for trial. The court emphasized the need for a coordinated mechanism involving banks, police, and legal services authorities to address the delay and ensure expeditious adjudication of these cases.
Issues: The issues revolved around the delay in the disposal of cases relating to cheque dishonour, the factors contributing to the delay, and the need for a coordinated mechanism to ensure expeditious trial and adjudication.
Ratio Decidendi: The court emphasized the legislative mandates for expeditious trial, the need for a pragmatic approach in issuing summons, the use of modern technology, and the role of banks, police, and legal services authorities in ensuring the expeditious adjudication of cases under Section 138 of the N.I. Act, 1881.
Final Decision: The court registered the matter as a Suo Moto Writ Petition (Criminal) with the caption ‘Expeditious trial of cases under Section 138 of N.I. Act, 1881’ and appointed Amicus Curiae to assist in evolving a coordinated mechanism for expeditious adjudication of these cases. The court issued notices to various stakeholders, including the Union of India, High Courts, Director General of Police, National Legal Services Authority, Reserve Bank of India, and Indian Bank Association, and listed the matters for further hearing.
Certainly. Based on the provided legal document, here are the key points:
The judgment emphasizes the necessity of a coordinated mechanism involving banks, police, and legal services authorities to ensure the expeditious adjudication of cases under Section 138 of the Negotiable Instruments Act, 1881, in compliance with legislative mandates and leveraging modern technology to address delays and reduce case pendency (!) (!) .
Despite legislative provisions and court mandates for speedy trials, there is significant pendency and delay in trial courts, primarily due to issues such as the absence of the accused, which contributes to prolonged case durations, sometimes extending up to 15 years (!) (!) (!) .
The court underscores the importance of pragmatic and realistic approaches in issuing summons, including proper addressing, use of electronic communication, and assistance from police or nearby courts to serve notices effectively (!) (!) .
It advocates for a multi-modal service mechanism, including service through speed post, courier, email, or police, and stresses the role of banks in providing requisite details of the accused, such as email IDs, mobile numbers, and addresses, to facilitate faster service and trial processes (!) (!) .
The development of a software-based tracking system to monitor service and ensure the presence of the accused is recommended, along with guidelines from the regulatory authority to facilitate information sharing and streamline proceedings (!) .
To prevent misuse and frivolous litigation, the court suggests that cheques should include details such as the purpose of payment, which can aid in proper adjudication, and considers the possibility of developing new cheque formats (!) .
The court highlights the importance of coercive measures, such as attachment of property, to secure the presence of the accused when necessary, and proposes mechanisms for recovering interim compensation and fines efficiently (!) .
Recognizing the high volume of cases, the court encourages the development of pre-litigation settlement mechanisms, such as settlement through designated authorities, which can effectively reduce the docket burden and facilitate quicker resolution (!) (!) .
The establishment of exclusive courts for handling cases under Section 138, especially in high-pendency areas, is recommended, along with setting performance norms for timely disposal (!) .
The use of modern technology, including online or paperless courts, is encouraged to reduce court congestion and facilitate remote adjudication, especially for cases with straightforward issues (!) (!) .
The court also considers the possibility of decriminalizing minor cheque dishonours and shifting such cases to civil jurisdiction, to better reflect the nature of the offence and reduce criminal caseloads (!) .
Overall, the judgment calls for a collaborative effort among all stakeholders—banks, police, legal authorities, and courts—to develop schemes and measures that ensure swift and just adjudication of cheque dishonour cases, fulfilling legislative intents and reducing case backlog (!) .
The matter is to be registered as a separate Suo Moto Writ Petition for the purpose of evolving and implementing these mechanisms, with notices issued to relevant authorities and stakeholders for further proceedings (!) (!) .
The court has appointed senior advocates as Amicus Curiae to assist in the process and has scheduled further hearings to facilitate the development of these mechanisms (!) (!) .
Please let me know if you need a detailed explanation on any specific point.
ORDER :
This Petition relates to dishonour of two cheques on 27.01.2005, for a total amount of Rs. 1,70,000/-, tried and contested over a period of 15 years up till this Court. A matter which is supposed to be disposed of summarily by the trial court in six months, it took seven years for this case to be disposed of at the trial court level. A dispute of such nature has remained pending for 15 years in various courts, taking judicial time and space up till this Court.
2. Dishonour of cheque, which originally gave cause of action to file a civil suit, was criminalised in the year 1988, with the insertion of Chapter XVII in the Negotiable Instrument Act, 1881. Cheque dishonour, followed by default in payment after a demand notice, became punishable under Section 138 with imprisonment or fine which may extend to twice the amount of the cheque or both.
3. The legislative intent behind the above-mentioned amendment was to ensure faith in the efficacy of banking operations and credibility in transacting business on cheques. It was to provide a strong criminal remedy in order to deter the high incidence of dishonour of cheques and ensure compensation to the complainant. Subsequent amendments in the Act and the pronouncements of this Court reflect that it was always perceived that these cases would be disposed off speedily so as to preserve the object of criminalisation of the act.
4. Despite many changes brought through legislative amendments and various decisions of this court mandating speedy trial and disposal of these cases, the Trial Courts are filled with large number of pendency of these cases. A recent study of the pending cases, reflects pendency of more than 35 lakh, which constitutes more than 15 percent of the total criminal cases pending in the District Courts. Further, there is a steady increase in the docket burden.
5. A plain reading of Chapter XVII of the N.I. Act, 1881 and the judgments of this Court in Indian Bank Association & others v. Union of India and Ors., (2014) 5 SCC 590 and Meters and Instruments Private Limited and Anr. v. Kanchan Mehta, (2018) 1 SCC 560 would show the following mandates with regard to the expeditious trial of cases of this nature:
(b) The evidence of the complainant must be conducted within three months of assigning the case.
(c) Endeavour must be made to conclude the trial within six months from the date of filing of the complaint.
(d) The Trial, as far as practicable, must be held on a day to day basis unless reasons exist to do otherwise.
Though, these mandates exist, they cannot operate in vacuum without addressing the factors attributable to the long delay of disposal of cases, urging holistic consideration.
6. One of the major factor, for high pendency is delay in ensuring the presence of the accused before the Court for trial. As per recent study, more than half of the pending cases, i.e. more than 18 lakh cases, are pending due to absence of accused.
7. This Court in Indian Bank Association (supra), has held that Magistrate should adopt a pragmatic and realistic approach while issuing process to ensure the presence of the accused. The direction was passed as follows:-
8. Taking effect from Section 144 of the Act, Sections 62, 66 and 67 of Cr.P.C. and directions of this Court, the Magistrate may opt for one or many of the methods of service of summons, including service through speed post or the courier s
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