Effectively Dealing With Cases of Section 138, Negotiable Instruments Act

Iustitiam morari iniustitia est- A Latin maxim that says that to delay justice is injustice. Along with the impartial disposal of cases by the court, one major requirement in timely justice. Speedy justice is a fundamental right and has time and again given importance by the Hon’ble Supreme Court in number of cases. Indian legal system has one of the largest backlogs of cases. On an average, cases take almost three to four years to get disposed. The reason for this delayed disposal of cases is contributed by a number of factors such as complex and comprehensive procedure of the Civil Procedure Code and Criminal Procedure Code, Judge-citizen ratio and vacancies of the Judges, frequent adjournments etc. The majority of the delay of cases is related to Section 138 of the Negotiable Instruments Act (hereafter, NIA)dealing with cases about dishonor of cheque.

Mr. Sidharth Luthra, a senior advocate in Supreme Court and Additional Solicitor General of India claimed in a recent report that the overall number of criminal cases pending before the courts is 2.31 crores. Only 35.16 lakhs of this total are related to cases brought under Section 138 of the Negotiable Instruments Act.

One of the biggest challenges the Indian judiciary faces in quickly resolving these issues is that, despite an annual increase in complaints, the rate of disposition does not keep pace with the amount of complaints being filed. The payee suffers irreversible loss, harm, and inconvenience as a result of the delay in disposal, and the confidence of the cheque’s issue is eroded.

Steps Taken by the Legal System

There have been many attempts made by the legal system to combat the issue of accumulation of cases and make sure to dispose them timely.

The Law Commission of India reviewed the statistical, infrastructural, and legal components of the docket explosion involving Section 138 in its 213th report, which was submitted in 2008, and made extensive suggestions. The research looked at the situation in depth and suggested modifications to the judicial system’s operation that would allow cases to be resolved more quickly. One major recommendation was the setting up of fast track courts and special courts.

Suggestions Recommended by the Supreme Court

In one of the recent suo moto Writ Petition as mentioned above, the Supreme Court gave a landmark standing suggesting speedy disposal of cases under Section 138 of NIA. To briefly discuss the background of the writ petition, the case was instituted through a special leave petition related to dishonor of two cheques. The dispute remained pending for over 16 years which should have been ideally disposed of by the lower court within 6 months. The trail court itself took 7 years to conclude the case. The Apex Court in this case observed that the legislature’s goal in enacting the Negotiable Instruments Act was to instill trust in the efficacy of banking operations and the legitimacy of transacting business with cheques. The criminalization of cheque dishonor was enacted in order to reduce the number of Section 138 offences. Despite multiple amendments and precedents set by various courts, the administration of justice has fallen short of the legislative goal. The trial courts are overburdened with pending matters. The primary reason that was concluded in this by the Supreme Court was the non-appearance of the accused before the court.

The Court gave few suggestions in order to conduct the timely disposal of cases. Firstly, the court laid that the service of the summons should be conducted in an expedited manner, the magistrate can provide services via speed post, e-mail, or any other manner that is faster. Moreover, communication modes such as SMS, Whatsapp, email etc can be used.  The court also stated that, as the principal shareholder in the transactions, the bank will play a significant role in supplying the necessary facts about the transactions and the individuals involved.

The bench also laid stress on the notion of pre- litigation mediation in these cases so as to save time of the court as well as the parties. The National Legal Services Authority, as the responsible authority in this matter, may develop a plan for pre-litigation settlement of cheque bounce matters. The pre-litigation Alternative Dispute Resolution (ADR) judgment will be treated as if it were a civil decree, helping to reduce the docket burden.

The Supreme Court advised that the High Court set up exclusive courts to deal with Section 138 issues, especially where there is a large backlog of cases, in light of the extent of the backlog. The High Court could provide additional rules in this regard, giving greater weight to cases being resolved within the legal deadlines.

Other Recommendations

Apart from these the Apex Court, recommended other useful suggestions, for effectively dealing with such cases. For example, it directed the magistrate to record reasonable grounds for converting a summary trail to summon trial and that the high court can frame guidelines directing the trial court to record reasons for converting the trials. Also, that the magistrate should conduct the inquiry on receipt of the complaints under Section 138, if the accused is not a resident of the court’s jurisdiction. The courts should next decide whether or not to prosecute the accused based on reasonable grounds.

Apart from the suggestions put forth by the Supreme Court via this writ petition, some other usefulrecommendations came from other judgmentsfor the speedy trial in Section 138 NIA cases. For instance, the evidence of the complainant must be conducted within three months of assigning the case. Endeavour must be made to conclude the trial within six months from the date of filing of the complaint. Lastly, the Trial, as far as practicable, must be held on a day to day basis unless reasons exist to do otherwise.

Conclusion

Dishonor of Cheque cases are one of the most common form of litigation matters that comes before the court. Due to the extensive number of cases ranging from very little amount to huge amounts, they pile up in the court rooms affecting the lives of the parties involved. Ideally the cases that should be solved within 6 months take 15 to 20 years to complete. It not only exploits the parties but is against the very idea of justice. The problem lies in the unnecessary delay done by the parties, their lawyers and sometimes the judges. The Supreme Court have time and again given recommendations and useful guidelines so that NIA cases are timely concluded and its high time to implement these.

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