SC to cut backlog of cheque dishonour cases

Expressing concern over the pendency of “staggeringly high” numbers of cheque dishonour cases in district courts of major cities, the Supreme Court (SC) has issued fresh guidelines to reduce the backlog which included voluntary compromises and release of accused on probation.

A bench of Justices Manmohan and NV Anjaria, while dealing with the cheque bounce cases where the Bombay High Court reversed the concurrent finding of the district courts to release the accused, tweaked the 15-year-old guidelines on compounding of offences under the Negotiable Instruments  (NI) Act.

It said this court takes judicial notice of the fact that despite repeated directions by this court in various judgments, the pendency of cheque bouncing cases under the NI Act in district courts in major metropolitan cities of India continues to be staggeringly high.

Referring to data from the National Judicial Data Grid, the bench said as on September 1, the pendency of Section 138 cases in Delhi district courts was 6,50,283, Mumbai district courts was 1,17,190, and Calcutta district courts was 2,65,985. “This pendency is putting an unprecedented strain on the judicial system as in some States, cases under Section 138 of the NI Act constitute nearly fifty per cent of the pendency in trial court (in Delhi, section 138 NI Act cases constitute 49.45 per cent of total trial court pendency),”  it said.

Tweaking the existing top court guidelines, the bench underlined the necessity owing to a huge pendency of such cases and the falling interest rates in the last few years.

Under the revised guidelines, if the accused pays the cheque amount before recording of his evidence (namely defence evidence), then the trial court may allow compounding of the offence without imposing any cost or penalty on the accused.

“If the accused makes the payment of the cheque amount post the recording of his evidence but before the pronouncement of judgment by the trial court, the magistrate may allow compounding of the offence on payment of an additional 5 per cent of the cheque amount with the legal services authority or such other authority as the court deems fit,” it said.

The top court said similarly, if the payment of the cheque amount is made before the sessions court or a high court in revision or appeal, such court may compound the offence on the condition that the accused pays 7.5 per cent of the cheque amount by way of costs.

“Finally, if the cheque amount is tendered before this court, the figure would increase to 10 per cent of the cheque amount,” it said.

The bench said in its recent verdict that the offence under Section 138 of the NI Act was quasi-criminal in character and compoundable, for the proceeding was essentially a civil proceeding and open to the parties to enter into a voluntary compromise. “Not only a voluntary compromise bring the proceedings under Section 138 NI Act to an end, but the accused under the said offence are entitled to benefit under the Probation of Offenders Act, 1958,” the order read.

The top court decided to issue fresh guidelines saying the service of summons on the accused in a complaint filed under Section 138 of the NI Act continued to be one of the main reasons for the delay in disposal of the complaints. The punishment under the NI Act, the top court said, was not a means of “seeking retribution” but more a means to ensure payment of money and promote the credibility of cheques as a trustworthy substitute for cash payment.

The top court issued procedural guidelines fusing it with the new criminal procedural law Bhartiya Nagarik Suraksha Sanhita, 2023 (BNSS) and said that under Section 138 of the NI Act, service of summons shall not be confined to the prescribed usual modes but shall also be issued dasti, that is, summons shall be served upon the accused by the complainant in addition.