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Home / India News / Freeze bank accounts, provide for post-summons mediation in cheque bounce cases: Amicus to SC

Freeze bank accounts, provide for post-summons mediation in cheque bounce cases: Amicus to SC

The two Amici Curiae, senior counsel Sidharth Luthra and advocate K Parameshwar noted in their report that a significant percentage of cheque bounce cases are pending at the stage of service of summons due to the lack of current address and whereabouts of the accused.

india Updated: Oct 13, 2020, 22:30 IST
Murali Krishnan
Murali Krishnan
Hindustan Times, New Delhi
Section 138 of the NI Act criminalises dishonour of a cheque when such a cheque given for discharge of a debt or liability is returned by the bank on account of insufficiency of funds in the concerned bank account.
Section 138 of the NI Act criminalises dishonour of a cheque when such a cheque given for discharge of a debt or liability is returned by the bank on account of insufficiency of funds in the concerned bank account.(HT PHOTO.)

Freezing bank accounts of accused, encouraging mediation and exploring alternative options to issue summons were some of the suggestions placed before the Supreme Court on Monday by the Amici Curiae to deal with the backlog of cheque bounce cases.

The two Amici Curiae, senior counsel Sidharth Luthra and advocate K Parameshwar noted in their report that a significant percentage of cheque bounce cases are pending at the stage of service of summons due to the lack of current address and whereabouts of the accused.

“It would be expedient to direct that banks, while issuing dishonour slips, under the Negotiable Instruments Act (NI Act), disclose the current mobile number, email address and postal address of the drawer of the cheque. Service of summons may be affected through SMS, WhatsApp, on the mobile number, email and postal address of the accused,” the report said.

The Central government, the Reserve Bank of India and the Indian Banks Association should consider establishment of a nodal service agency for effective service of summons through electronic processes, it added.

The Supreme Court had on March 5 taken suo motu cognizance of the pressing need for speedy trial and disposal of cases instituted under Section 138 of the NI Act.

Section 138 criminalises dishonour of cheque when such a cheque given for discharge of a debt or liability is returned by the bank on account of insufficiency of funds in the concerned bank account.

The apex court in its March 5 order noted that the huge pendency in cheque bounce cases under Section 138 posed great perils to the justice delivery system and appointed Luthra and Parameshwar as Amicus Curiae to assist the court and invite suggestions and solutions to deal with the issue.

Amicus Curiae, which literally translates as friend of the court, is a neutral lawyer appointed by the court to assist it in cases which require specific expertise.

The report by the two lawyers suggested that when a person against whom a warrant is issued has absconded or has concealed himself such that the warrant cannot be executed, then Magistrates could consider ordering attachment of the bank accounts of the accused to the extent of the cheque amount.

“The Magistrate could direct the concerned bank that the account of the accused, to the extent of the cheque amount shall stand frozen. If this procedure is adopted, it would act as a deterrent for the accused from evading the summons and trial,” it said.

The Amici Curiae also said that magistrates could direct parties to resort to mediation while issuing summons.

“In such cases, the summons may reflect a date for mediation and also a date for trial. A Standard Operating Procedure for post-summons mediation will have to be developed in consultation with the relevant stakeholders keeping in mind that the mediation is time-bound, cost-effective and does not become another tool in the hands of the accused to delay the trial,” the report stated.

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