Cheque Bounce Cases: Supreme Court asks Centre if it can set up Additional Courts

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In order to reduce pendency of cheque bounce cases which have reached 35 lakh across courts, the Supreme Court on Thursday asked the Centre whether it can create additional courts for expeditious disposal of such matters.

A bench comprising of Chief Justice S A Bobde and Justice L Nageswara Rao and Justice S Ravindra Bhat asked additional solicitor general Vikramjit Banerjee to inform it by next week whether the central government was willing to create additional courts under Article 247 for speedy disposal of cases under Negotiable Instrument Act (NI ACT).

Banerjee said he would seek instruction and inform the court by next date of hearing.

Article 247 of the Constitution gives power to Parliament to establish certain additional courts for the better administration of laws made by it or of any existing laws with respect to a matter enumerated in the Union List.

The top court was hearing a suo motu case to work out a mechanism for expeditious and just adjudication of cases relating to dishonour of cheques, fulfilling the mandate of law and reduce high pendency.

The bench told Banerjee and senior advocate Siddharth Luthra, appointed as amicus curiae in the matter, that there are certain judgements which say the legislature is duty bound to conduct an impact assessment before creating of a new offence under the law.

It sought to know whether the government was under obligation for establishing additional courts to deal with cases under the NI Act, which is a central law. Luthra gave certain suggestions to the court for evolving a mechanism for speedy disposal of such cases including sending of summons electronically through e-mail or social media.

He said that many cheque bounce cases are stuck in courts due to non-service of summons and since now a days most of the things are linked with Aadhaar, the summons can be served electronically.

Luthra further suggested that if a person absconds then under Section 83 of CrPC attachment proceedings can be initiated and his bank accounts could be attached because he may not be found but his account can be traced.

The bench sought to know from Luthra whether bank account of which the cheque was issue will be seized or any bank accounts can be attached.

Luthra said that under section 83, any properties of the accused can be attached, therefore any bank account can be seized.

He further suggested that mediation proceedings should be encouraged by the courts and cases which are in appeal can also be sent for mediation at least once for amicable settlement.

The bench said it will continue hearing the issue next week and sought to know the Centre’s view on the issue.

On January 19, the top court had asked various high courts and DGPs to file their response on the issue pertaining to expeditious disposal of cheque bounce cases.

It had said that high courts through registrar generals and states and Union Territories through their director general of police (DGPs) can file their response.

On March 5 last year, the top court had registered a suo motu case and decided to evolve a “concerted” and “coordinated” mechanism for expeditious disposal of such cases.

It had sought responses from the Centre and other stakeholders, including the Reserve Bank of India on the issue.

The apex court had passed the order while dealing with a plea related to dishonour of two cheques in January 2005, noted that a dispute of this nature has remained pending for 15 years in various courts and taken judicial time.

The top court had said that 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 a large number of pendency of these cases.

It had referred to a recent study of the pending cases and said it reflects pendency of more than 35 lakh, which constitutes more than 15 per cent of the total criminal cases pending in district courts.

The top court had appointed senior lawyer Siddharth Luthra and advocate K Parameshwar as amicus curiae to assist it in the matter.

It had noted that dishonour of cheque was criminalised in 1988 and the legislative intent was to “ensure faith in the efficacy of banking operations and credibility in transacting business on cheques.”

The top court had said that as per the legal mandate, endeavour must be made to conclude the trial in cheque bounce case within six months from the date of filing of complaint.

Referring to the study, it had said that more than half of the pending cases that is more than 18 lakh cases, are pending due to absence of accused and a mechanism may be developed to ensure the presence of the accused even by way of coercive measure, if required, including attachment of property.

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