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In Re: Expeditious Trial of Cases Under Section 138 of Negotiable Instruments Act, 1881 (Suo Motu Writ Petition (Crl.) No. 2 of 2020)

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A Constitutional bench of the Hon’ble Supreme Court of India, comprising of Mr. Chief Justice S.A. Bobde, Mr. Justice L. Nageswara Rao, Mr. Justice B.R. Gavai, Mr. Justice A.S. Bopanna and Mr. Justice S. Ravindra Bhat, passed the following directions on April 16, 2021 to expedite the proceedings under Section 138 of the Negotiable Instruments Act, 1881 (“NI Act”), in view of the prevailing gargantuan pendency of complaints at various levels:

  1. High Courts may issue practice directions to the Magistrates to record reasons before converting trial of complaints under Section 138 from summary trial to summons trial.
  • An inquiry shall be held by the Magistrate before issuance of summons to the accused residing outside the jurisdiction of the court; on the completion of such inquiry, the Magistrate should conclude that sufficient grounds exist to proceed against the accused.
  • Section 202(2) of the Criminal Procedure Code (“Cr.PC”) is inapplicable to complaints under Section 138 of NI Act, in respect of examination of witnesses on oath. The evidence of witnesses on behalf of the complainant is permissible on affidavit. The Magistrate can, in suitable cases, restrict the inquiry to examination of documents without insisting upon examination of witnesses.
  • The SC recommended amendments in the NI Act for provision of one trial against a person for multiple offences under Section 138 of the Act committed within a period of 12 months, notwithstanding the restriction in Section 219 of the Code.
  • High Courts to issue practice directions to the Trial Courts for treating service of summons in one complaint under Section 138, forming part of a transaction, as deemed service in respect of all the complaints filed before the same court relating to dishonour of cheques issued as part of the said transaction.
  • There is no inherent power of Trial Courts to review or recall the issue of summons. This however does not affect the power of the Trial Courts under Section 322 of Cr.PC to revisit the order of issue of process in case it lacked jurisdiction to try the complaint.
  • Section 258 of Cr.PC is not applicable to complaints under Section 138 of NI Act.

The Courts, before which appeals against judgments in complaints under Section 138 are pending, should make an effort to settle the disputes through mediation. 

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