'Amend Section 138 NI Act To Allow One Trial For Multiple Cases From Single Transaction': Supreme Court Issues Directions For Expeditious Trial Of Cheque cases [Read Order]



 The Supreme Court of India recently in comprising of bench of Chief Justice of India SA Bobde, Justices L Nageswara Rao, BR Gavai, AS Bopanna and S Ravindra Bhat has recommended an amendment empowering Magistrate to recall summons in respect of complaints under Section 138 Negotiable Instrument act. (In Re Expeditious Trial Of Cases Under Section 138 of N.I Act)

The Constitution Bench observed that Section 258 of the Code of Criminal Procedure is not applicable to complaints under Sectio138 of the Negotiable Instruments Act and the Magistrates are not empowered to discharge the accused if the complainant is compensated to the satisfaction of the court.


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However, the bench observed that amendment to the NI Act empowering the Trial Court to reconsider/recall summons may be considered on the recommendation of the Committee constituted in this regard.

Facts of the case

A Special Leave Petition was filed against dishonor of two cheques 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, pending at various levels,  The Division Bench of this Court consisting of two judges  the Chief Justice of India and  Justice L. Nageswara Rao, decided to examine the reasons for the delay in disposal of these cases.

Notices were issued to the Union of India, Registrar Generals of the High Courts, Director Generals of Police of the States and Union Territories, Member Secretary of the National Legal Services Authority, Reserve Bank of India and Indian Banks’ Association, Mumbai as the representative of banking institutions.


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Contention of the Parties

According to the learned Amici Curiae the reasons for the backlog of cases is that while there is a steady increase in the institution of complaints every year, the rate of disposal does not match the rate of institution of complaints.

The learned Amici Curiae identified seven major issues from the responses filed by the State Governments and Union Territories a) Service of summons b) Statutory amendment to Section 219 of the Code c) Summary trials d) Attachment of bank accounts e) Applicability of Section 202 of the Code f) Mediation.

Learned amici curia submitted some recommendations  relating to attachment of bank accounts to the extent of the cheque amount, pre-summons mediation and all other issues which are part of the preliminary note and the written submissions of the learned Amici Curiae shall be considered by the aforementioned Committee, in addition to other related issues which may arise during such consideration. It is further contended by the learned Amici Curiae that though there is no specific provision permitting the examination of witnesses on affidavit, Section 145 permits the complainant to be examined by way of an affidavit for the purpose of inquiry under Section 202.


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 He suggested that Section 202 (2) should be read along with Section 145 and in respect of complaints under Section 138, the examination of witnesses also should be permitted on affidavit. Thereafter  in the submission  the learned Amici Curiae that one trial for more than three offences of the same kind within the space of 12 months in respect of complaints under Section 138 can by an amendment.

Further, ,Amici Curiae submitted that cases pending at the appellate stage and before the High Courts and this Court can be settled through mediation.

Observation of court & Judgment

The Court Observed, "From the responses of various High Courts, it is clear that the conversion by the Trial Courts of complaints under Section 138 from summary trial to summons trial is being done mechanically without reasons being recorded. The result of such conversion of complaints under Section 138 from summary trial to summons trial has been contributing to the delay in disposal of the cases.


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Section 143 NI Act deals with the Power of Court to try cases summarily. It provides that the provisions of sections 262 to 265 (both inclusive) of the said Code shall, as far as may be, apply to such summary trials.

In Meters and Instruments Private Ltd and Another v Kanchan Mehta and others (2018) 1 SCC 560, the Supreme Court had observed that that Section 143 of the Act confers implied power on the Magistrate to discharge the accused, if the complainant is compensated to the satisfaction of the court. It was held that apart from compounding by the consent of the parties, the Trial Court has the jurisdiction to pass appropriate orders under Section 143 in exercise of its inherent power. While holding that this is not a good law, the bench made following observations:

The bench observed that Conferring power on the court by reading certain words into provisions is impermissible.


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"The judgment of this Court in Meters and Instruments (supra) in so far as it conferred power on the Trial Court to discharge an accused is not good law. Support taken from the words "as far as may be" in Section 143 of the Act is inappropriate. The words "as far as may be" in Section 143 are used only in respect of applicability of Sections 262 to 265 of the Code and the summary procedure to be followed for trials under Chapter XVII. Conferring power on the court by reading certain words into provisions is impermissible. A judge must not rewrite a statute, neither to enlarge nor to contract it. Whatever temptations the statesmanship of policy-making might wisely suggest, construction must eschew interpolation and evisceration. He must not read in by way of creation.. The Judge's duty is to interpret and apply the law, not to change it to meet the Judge's idea of what justice requires. The court cannot add words to a statute or read words into it which are not there."

The bench further noted, Trial Court cannot be conferred with inherent power either to review or recall the order of issuance of process.

The Trial Court cannot be conferred with inherent power either to review or recall the order of issuance of process. As held above, this Court, in its anxiety to cut down delays in the disposal of complaints under Section 138, has applied Section 258 to hold that the Trial Court has the power to discharge the accused even for reasons other than payment of compensation.


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The bench issued the following directions to expedite the trial of cheque dishonour cases under Section 138 NI Act:

  1. The High Courts are requested to issue practice directions to the Magistrates to record reasons before converting trial of complaints under Section 138 of the Act from summary trial to summons trial.
  2. Inquiry shall be conducted on receipt of complaints under Section 138 of the Act to arrive at sufficient grounds to proceed against the accused, when such accused resides beyond the territorial jurisdiction of the court.
  3. For the conduct of inquiry under Section 202 of the Code,evidence of witnesses on behalf of the complainant shall be permitted to be taken on affidavit. In suitable cases, the Magistrate can restrict the inquiry to examination of documents without insisting for examination of witnesses
  4. We recommend that suitable amendments be made to the 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.
  5. The High Courts are requested to issue practice directions to the Trial Courts to treat 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.
  6. Judgments of the Court in Adalat Prasad v Rooplal Jindal and others (2004) 7 SCC 338 and Subramanium Sethuraman v State of Maharashtra (2004) 13 SCC 324 have interpreted the law correctly and we reiterate that there is no inherent power of Trial Courts to review or recall the issue of summons.This does not affect the power of the Trial Court under Section 322 of the Code to revisit the order of issue of process in case it is brought to the court's notice that it lacks jurisdiction to try the complaint.
  7. Section 258 of the Code is not applicable to complaints under Section 138 of the Act and findings to the contrary in Meters and Instruments Private Ltd and Another v Kanchan Mehta and others (2018) 1 SCC 560 do not lay down correct law. To conclusively deal with this aspect, amendment to the Act empowering the Trial Courts to reconsider/recall summons in respect of complaints under Section 138 shall be considered by the Committee constituted the Court on 10.03.2021


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