2020 (3) TMI 1312 - SC - Indian Laws

Trial of cases relating to Dishonor of Cheque and default in payment after a demand notice - 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 - pendency of more than 35 lakh which constitutes more than 15 percent of the total criminal cases pending in the District Courts - HELD THAT - 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) TMI 750 - SUPREME COURT and Meters and Instruments Private Limited and anr. v. Kanchan Mehta 2017 (10) TMI 218 - SUPREME COURT would show the following mandates with regard to the expeditious trial of cases of this nature. 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 - 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 services Police Officer or any other person e-mail or through a Court having territorial jurisdiction. There is a need to evolve a system of service/execution of process issued by the court and ensuring the presence of the accused with the concerted efforts of all the stakeholders like Complainant Police and Banks. One step in such direction was taken by this court in the case of Meters and Instruments Private Limited where it had directed the banks to give the details of e-mail of the accused to the payee/complainant for service through e-mail - Banks being an important stakeholders in cases of this nature it is their responsibility to provide requisite details and facilitate an expeditious trial mandated by law. An information sharing mechanism may be developed where the banks share all the requisite details available of the accused who is the account holder with the complainant and the police for the purpose of execution of process. The High Courts may also consider setting up of exclusive courts to deal with matters relating to Section 138 especially in establishments where the pendency is above a standard figure. Special norms for assessment of the work of exclusive courts may also be formulated giving additional weightage to disposal of case within the time-frame as per legal requirement - the status of directions issued or measures adopted by the High Courts may be assessed and a best suited mechanism in this direction may be considered. Let the matter be registered separately as Suo Moto Writ Petition (Criminal) with the caption Expeditious trial of cases under Section 138 of N.I. Act 1881 . Issue notice to the Union of India through Law Secretary Registrar General of all the High Courts the Director General of Police of all the States and Union Territories Member Secretary of the National Legal Services Authority Reserve Bank of India and Indian Bank Association Mumbai as the representatives of Banking institutions - List both the matters on 16.04.2020.

Summary

Issues involved:
1. Delay in disposal of cases related to dishonour of cheques under Section 138 of the Negotiable Instrument Act, 1881.
2. High pendency of cases in Trial Courts due to various factors.
3. Challenges in ensuring the presence of accused before the Court for trial.
4. Need for a coordinated system involving stakeholders like Banks, Police, and Legal Services Authorities for expeditious adjudication of cheque bounce cases.
5. Suggestions for evolving mechanisms for pre-litigation settlement, use of modern technology, and potential decriminalization of dishonour of cheques of small amounts.

Detailed Analysis:
1. The judgment highlighted the significant delay in disposing of cases related to dishonour of cheques, emphasizing the legislative intent behind criminalizing cheque dishonour to ensure faith in banking operations and provide a strong criminal remedy. Despite mandates for expeditious trials, the Trial Courts face a high number of pending cases, necessitating a holistic approach to address delays.

2. One major factor contributing to high pendency is the delay in ensuring the presence of accused individuals before the Court for trial. The judgment referenced the need for a pragmatic and realistic approach by Magistrates in issuing summons, utilizing various methods of service, including police assistance, to serve notices effectively.

3. The judgment discussed challenges in executing further processes after summons are served, highlighting the reluctance of police agencies to act promptly in private complaint cases. It suggested the need for a coordinated effort among stakeholders like complainants, police, and banks to ensure the presence of accused individuals and facilitate expeditious trials.

4. To address the challenges and streamline the adjudication process, the judgment proposed mechanisms for information sharing among banks, complainants, and police to track accused individuals effectively. It recommended the development of software-based systems for process service and emphasized the role of Banks in providing necessary details for trial proceedings.

5. Additionally, the judgment suggested exploring pre-litigation settlement mechanisms, leveraging modern technology for online adjudication where feasible, and potentially considering decriminalization of dishonour of cheques involving small amounts. It called for a concerted, coordinated effort among duty-holders like Banks, Police, and Legal Services Authorities to develop schemes for expeditious adjudication of cheque bounce cases in line with legal requirements.