IN RE: EXPEDITIOUS TRIAL OF CASES UNDER SECTION 138 OF N.I. ACT 1881. Vs. IN RE: EXPEDITIOUS TRIAL OF CASES UNDER SECTION 138 OF N.I. ACT 1881.

JUDGEMENT

(1.) Special Leave Petition (Criminal) No. 5464 of 2016 pertains to dishonour of two cheques on 27.01.2005 for an amount of Rs.1,70,000/-. The dispute has remained pending for the past 16 years. Concerned with the large number of cases filed under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter the Act) pending at various levels, a Division Bench of this Court consisting of two of us (the Chief Justice of India and L. Nageswara Rao, J.) decided to examine the reasons for the delay in disposal of these cases. The Registry was directed to register a Suo Motu Writ Petition (Criminal) captioned as "Expeditious Trial of Cases under Section 138 of N.I. Act 1881". Mr. Sidharth Luthra, learned Senior Counsel was appointed as Amicus Curiae and Mr. K. Parameshwar, learned Counsel was requested to assist him.

(2.) The learned Amici Curiae submitted a preliminary report on 11.10.2020 which was circulated to all the Respondents. On 19.01.2021, the learned Amici Curiae informed this Court that only 14 out of 25 High Courts had submitted their responses to the preliminary report. The Reserve Bank of India had also filed its suggestions. Seven Directors General of Police had filed their affidavits putting forward their views to the preliminary report. The parties who had not filed their responses were granted further time and the matter was listed on 24.02.2021 for final disposal. During the course of the hearing, it was felt by a Bench of three Judges, consisting of the Chief Justice of India, L. Nageswara Rao, J. and S. Ravindra Bhat, J. that the matter had to be considered by a larger bench in view of the important issues that arose for determination before this Court. The reference of the matter to a larger bench was also necessitated due to the submission made by the learned Amici Curiae that certain judicial pronouncements of this Court needed clarification. We have heard learned Amici Curiae, Advocates for some States, the learned Solicitor General of India, Mr. Vikramjit Banerjee, learned Additional Solicitor General of India, Mr. Ramesh Babu, Advocate for the Reserve Bank of India and Dr. Lalit Bhasin, Advocate for the Indian Banks' Association.

(3.) Chapter XVII inserted in the Act, containing Sections 138 to 142, came into force on 01.04.1989. Dishonour of cheques for insufficiency of funds was made punishable with imprisonment for a term of one year or with fine which may extend to twice the amount of the cheque as per Section 138. Section 139 dealt with the presumption in favour of the holder that the cheque received was for the discharge, in whole or in part, of any debt or other liability. The defence which may not be allowed in a prosecution under Section 138 of the Act is governed by Section 140. Section 141 pertains to offences by companies. Section 142 lays down conditions under which cognizance of offences may be taken under Section 138. Over the years, courts were inundated with complaints filed under Section 138 of the Act which could not be decided within a reasonable period and remained pending for a number of years.