Centre differs with SC on additional courts for cheque bounce cases
- Unhappy with the response, the bench headed by Chief Justice of India (CJI) SA Bobde asked Solicitor General Tushar Mehta to appear in the case along with Additional Solicitor General (ASG) Vikramjeet Banerjee, who presented the note to the Court.
The Centre on Wednesday refused to play ball with the Supreme Court on a crucial reform suggestion to set up additional courts for expeditious trial of cheque bounce cases.
The top court which is examining measures to fast-track cheque bounce cases in a suo moto proceeding had on February 25 sought the view of the Centre to create additional courts for exclusive trial of offences under Section 138 of the Negotiable Instruments (N.I) Act. The Court cited Article 247 of the Constitution which empowers Parliament to create additional courts for better administration of laws.
In response, the Centre presented a three-page document comprising an Office Memorandum dated March 2, 2021 issued by the Department of Financial Services (DFS) and a two-page note attached with it.
The note altogether dismissed the suggestion for creating additional courts. It said, “One of the major factors for high pendency is delay in ensuring the presence of the accused before the Court for trial. It is understood that most cases are pending due to absence of the accused. Under such circumstances, it is not clear how additional specific courts would provide a solution to the problem of a large number of pending cases.”
Not happy with the response, the bench headed by Chief Justice of India (CJI) SA Bobde asked Solicitor General Tushar Mehta to appear in the case along with Additional Solicitor General (ASG) Vikramjeet Banerjee, who presented the note to the Court.
The bench, also comprising Justices L Nageswara Rao and S Ravindra Bhatt recorded in its order, “Prima facie we are of the view that the aforesaid Article 247 (of Constitution of India) confers a power coupled with duty on the Union of India to establish additional courts, for better administration of laws made by Parliament. There is no doubt or dispute about the fact that matters under the N.I Act have posed what by now has become an intractable problem, accounting for close to 30 to 40 per cent of the pendency in the trial courts and a very high percentage in High Courts as well.”
The note prepared by DFS said, “Instead of setting up additional special courts, certain measures may be considered to reform the existing processes…To address the concerns that many accused attempt to obtain stay and adjournment on flimsy grounds, Supreme Court may consider capping the maximum number of hearings, and if the accused does not appear despite the measures mentioned above, then the passing of ex-parte may be considered by the (trial) court.”
The note said that the root cause of delay in deciding cheque bounce cases was delay tactics employed by accused that could be resolved by measures such as levying penalty on non-appearance of accused, using coercive methods to secure presence of accused by way of attachment of property, deemed appearance despite repeated service of summons.
Reacting to these suggestions, the bench noted in its order, “Having gone through the measures and heard learned counsel on the said measures, we find that the measures are, to say the least, inadequate for the purpose.”
The bench asked ASG Banerjee, “In 30 per cent of cheque bounce cases, trial is help up as the accused is not being served summons. If you have come up with this suggestion to secure the presence of accused and hearing the case ex-parte, what is the solution…In this country, is it possible to have a trial with the accused in absentia. Cases are pending in our courts for this reason for over 15 to 20 years.”
As no solution was forthcoming, the bench proposed forming a Committee headed by a retired High Court judge having vast experience as a trial judge and asked Centre to suggest names of bureaucrats from the concerned Central Ministries to be part of the Committee. The Court posted the matter for hearing on Thursday.
The suggestion to set up additional courts for trial of Section 138 of N.I Act cases formed part of a preliminary report prepared by Court-appointed amici curiae senior advocate Sidharth Luthra and advocate K Parameshwar in October 2020.
Though the Act prescribes a six-month deadline for completion of trial in a cheque bounce offence, a case under Section 138 NI Act on an average takes three years and eight months to be decided, the report prepared by the amici curiae stated. Increase in institution of cheque bounce complaints and failure to serve summons on the accused were identified as the chief causes behind the backlog.
Their report stated that as on January 1, 2020, out of over 2.31 crore (over 20 million) criminal cases pending in the country, cheque bounce cases accounted for almost 15 per cent. One of their suggestions to speed up disposal of cheque bounce cases included creation of additional exclusive courts.
In addition, they pressed for a major overhaul in the court processes by way of electronic service of summons, summary trial of cheque bounce cases, compulsory mediation at the pre-trial stage, and attachment of property of accused to the extent of the amount presented in the cheque.