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Commentary: Re: Expeditious Trial Of Cases Under Section 138 Of N.I. Act 1881

Our Constitution guarantees us the right to life, as has been laid down under Article 21, stating that no person shall be deprived of his/her personal liberty except according to the procedure established under law.

When one talks about the aspect of personal liberty, it extends to the idea of having an access to Speedy Trials.

No person should be made to wait for years in order to achieve the ends of justice. Nobody should be made to visit courts endlessly and in recurring nature, just to get a recourse served. This unnecessarily elevates emotional turmoil, anxiety and exhaustion of efforts and time. It also leads to overburdening of courts with impending litigations and piling up of additional new pleadings.

In tune to achieve this very goal of speedy trials, a step has been taken by the Hon’ble Supreme Court to expedite matters pertaining to Section 138 of the Negotiable Instruments Act, 1881 (NIA ,1881)

On 10th March, 2021, a constitution bench of Hon’ble Supreme Court comprising of Chief Justice of India SA Bobde, Justices L Nageswara Rao, BR Gavai, AS Bopanna and S Ravindra Bhat, took Suo Moto cognizance to find the reasons for delay in disposal of the large number of cases pertaining to Section 138 of NIA, 1881 under Suo Moto Writ Petition (Criminal) titled as In Re: Expeditious Trial Of Cases Under Section 138 Of N.I. Act 1881.

For the very purpose of assisting the Hon’ble SC in finding the reasons and solutions for the same, Ld. Senior Advocates Siddharth Luthra, R Basant and Advocate K Parameshwar were associated as Amici Curiae.

Notices were also issued to the Union of India, Registrar Generals of the High Courts, Director Generals of the police of States and Union Territories, Member Secretary of the National Legal Service Authority, Reserve Bank of India and India Bank’s Association, Mumbai as the representative of banking sector, who were held in the capacity of Respondents.
A preliminary report was being submitted by the Amici Curiae on 11.10.2021.

In the report, a long list of reasons were carved out which were leading to the unnecessary delay in resolving the disputes pertaining to Section 138, NIA 1881.

Some of the issues raised in the report were addressed by the Hon’ble Supreme Court in the aforementioned order itself, and the rest of them which weren’t have been left for further deliberations which shall be conducted by a committee of experts headed under Retired Bombay High Court judge, Justice RV Chavan to suggest steps so as to expedite trials under Section 138, NIA, 1881.

The very essence of the order i.e. sections 138 to 142, inserted by Chapter XVII in the NIA Act, 1881, came into force on 01.09.1989.
As per Section 138 of NIA, 1881:
138 Dishonour of cheque for insufficiency, etc., of funds in the account:
Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for 19 [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both’

It was observed that these impending trials of the cases dealing with Section 138, NIA 1881, consumes a lot of precious time of the Courts and thus, they are left overburdened and with paucity of time cause of which disposal of other crucial Criminal cases becomes a task. In an attempt to rectify this scenario, the Negotiable Instruments Amendment Act was brought into picture in 2002, by which section 143 to 147 were inserted, which talked about summary trials, mode of issuance of summons and evidence of the complainant.
However, in spite of the aforesaid amendments, the long impending trials under NIA, 1881 continued to function and not much help could be offered by bringing Section 143 to 147 into the Act. This has led to increased workload on the courts and the rate of filing the complaints and disposal of the cases don’t go hand in hand.

The Amici Curiae after evaluating the responses filed by the Respondents listed seven major issues, which are more or less the reason, behind delayed proceedings under Section 138 of NIA, 1881:
  1. Service of Summons
  2. Statutory amendment to Section 219 of the Code of Criminal Procedure, 1973
  3. Summary Trials
  4. Attachment of bank accounts
  5. Applicability of Section 202 in The Code Of Criminal Procedure, 1973
  6. Mediation
  7. Inherent jurisdiction of the Magistrate

It is important to note, that the Amici Curiae made certain suggestions in order to rectify some of these issues which are as follows:-
  1. Service of Summons
    As per the preliminary report, this has been one of the major reasons for delay in disposal of complaints under NIA, 1881. It was suggested by the respondents that services of the summons should be sped up. Also, it was noticed that a lot of separate complaints were filed under the Section 138 for dishonour of multiple cheques in the same transaction. It was suggested, that the summons issued in one complaint should be deemed served for all other complaints as well, under the same transaction, which the Hon’ble SC agreed. On the lines of this very suggestion, the Hon’ble SC requested the High Courts to issue directions similar directions to Trial courts pertaining to service of summons in multiple complaints under single transaction.
     
  2. Statutory amendment to Section 219 of the Code of Criminal Procedure, 1973
    ‘219. Three offences of same kind within year may be charged together.
    1. When a person is accused of more offences than one of the same kind committed within the space of twelve months from the first to the last of such offences, whether in respect of the same person or not, he may be charged with, and tried at one trial for, any number of them not exceeding three […]

      It has been suggested by the Ld. Amici that a legislative amendment is needed in section 212 of Crpc, 1973 to avoid multiplicity of proceedings, where cheques have been issued as a part of single transaction, i.e. for one purpose. The Ld. Amici argued that if there are more than three offences, in the same transaction, even then there should be a joint trial.

      In the tune of this submission, a judgment delivered by the Hon’ble SC, Vani Agro Enterprises v. State of Gujarat & Ors. was referred to, wherein there were four dishonoured cheques, for which separately four different complaints were filed. Since, there were more than three complaints, thus the Hon’ble SC directed the Trial Court to fix al these complaints on the same date. Therefore, it becomes evident on the face of it that Section 219 of Crpc, 1973 needs to be amended suitably especially for complaints arising out of section 138, NIA 1881.
       
  3. Summary Trials
    As per Section 143 of NIA, 1881:
    143. Power of Court to try cases summarily-
    1. Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), all offences under this Chapter shall be tried by a Judicial Magistrate of the first class or by a Metropolitan Magistrate and the provisions of sections 262 to 265 (both inclusive) of the said Code shall, as far as may be, apply to such trials: Provided that in the case of any conviction in a summary trial under this section, it shall be lawful for the Magistrate to pass a sentence of imprisonment for a term not exceeding one year[…]’

      As per this section, the Magistrate has the authority to convert any summary trial to summon trial, if the sentence of imprisonment exceeds one (1) year.

      The Ld. Amici argued that this leads to undue lag and unnecessary delay in disposing the complaints under Section 138, NIA 1881. Thus they suggested, in order to convert a summary trial into summon trial, the Magistrate should record valid and relevant reasons. Agreeing to these contentions, the Hon’ble SC directed the High Courts to pass such directions to Trial Courts.

      This practice suggested by Ld. Amici is important in nature, or else the very essence of bringing Section 143 of NIA 1881 becomes futile. As per section 143, it becomes important to apply summary trials to complaints under section 138 of NIA, 1881 n order for speedy redressal of these cases.
       
  4. Applicability of Section 202 in The Code Of Criminal Procedure, 1973
    ‘202. Postponement of issue of process.
    1. Any Magistrate, on receipt of a complaint of an offence of which he is authorised to take cognizance or which has been made over to him under section 192, may, if he thinks fit, postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding: […]’

      This notion remains debatable where matters under section 138, NIA 1881 are concerned. There have been views expressed, that merely cause the accused remains outside the scope of jurisdiction of the court, doesn’t mean that the Magistrate has to postpone the issuance of the process in every case. However, in the present writ, Ld. Amici was of the view that the Magistrate should hold an enquiry for the want of sufficient grounds in order to proceed against the Accused, to which the Hon’ble SC has well agreed.
      Another important facet under Section 202 of Crpc, 1973, addressed by the Amici Curiae is its (2) provision i.e.-

      ‘202(2) In an inquiry under sub- section (1), the Magistrate may, if he thinks fit, take evidence of witnesses on oath: Provided that if it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session, he shall call upon the complainant to produce all his witnesses and examine them on oath.’

      However, it is important to mention that the section 143, NIA 1881 explicitly mentions that evidence by the complainant can be given in an Affidavit by him/her which shall be treated as an evidence in all trials, inquiries and section 202(2) of Crpc, 1973 shall not override it. The Ld. Amici Curiae coincided by this view and held that only in exceptional cases should the Magistrate personally examine the accused. In the normal course of hearings, evidence by the way of affidavits should be relied upon, making section 202(2) inapplicable on cases under section 138 of NIA, 1881.
       
  5. Inherent jurisdiction of the Magistrate
    The Ld. Amici relied on Section 258 of Crpc 1953, which reads as follows –

    258. Power to stop proceedings in certain cases. In any summons- case instituted otherwise than upon complaint, a Magistrate of the first class or, with the previous sanction of the Chief Judicial Magistrate, any other Judicial Magistrate, may, for reasons to be recorded by him, stop the proceedings at any stage without pronouncing any judgment […]

    Thus, they emphasized that a holistic reading of section 143 of NIA, 1881 and section 258 of Crpc 1973 confers a power on Trial courts to recall or revoke the issuances of process in cases under section 138 of NIA, 1881.

    However, the Hon’ble SC didn’t agree to this view. Placing reliance on the judgments delivered by the Hon’ble SC in in Adalat Prasad v. Rooplal Jindal and Ors. and Subramanium Sethuraman v. State of Maharashtra & Anr., the Hon’ble SC asserted that the principles held in these judgments are correct in law: the judge only has power to interpret a statute, and not change it. Section 258 of Crpc 1973 does not hold any stance in cases pertaining to section 138 NIA, 1881.

    However, the Hon’ble SC has directed the committee so constituted to deliberate on this contention and check whether an amendment to the act should be made or not.
     
  6. The other recommendations made by the learned Amici Curiae in relation to Attachment of bank accounts to the extent of the cheque amount and all other relevant issues forming part of the preliminary report along with the written submissions of the learned Amici Curiae, shall be considered by the aforementioned Committee.

    However, on the issue of pre summon mediation, the Ld. Amici contended that there are innumerable cases pending at the appellate stage, which can be settled through Mediation. The courts before which such appeals are impending are thus directed to explore the opportunity of mediation.

    Also, the Committee has been directed to explore the possible need of creating additional courts to hear complaints in relation section 138 of NIA, 1881, in order to lessen the burden.

Conclusion:
This order can be revolutionary in nature, if it serves the very purpose for which it was delivered rightfully. The matter has now been listed after 8 weeks before a Ld. Three-judges bench.

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