The Supreme Court and Delays in Cheque Bouncing Cases

This April, a Constitution Bench of the Indian Supreme Court took up the issue of delays in cheque bouncing cases — i.e., complaints instituted under Section 138 of the Negotiable Instruments Act 1881 — and passed some important directions on how such cases should be run [Order dated 16.04.2021 in Suo Motu Writ Petition (Crl.) 2 of 2020]. It has also constituted a Committee to look at issues beyond these criminal procedure aspects which will take time in formulating its recommendations. On June 21, the Delhi High Court has taken the lead and made efforts (as recommended by the Supreme Court itself) to help secure implementation of the Supreme Court's order by issuing "Practice Directions". 

Given that judges, especially at the Supreme Court, have to budget the very limited time available to them and pick what they think are serious issues, it is great that the issue of delays in cheque bouncing cases caught their attention to this extent. At the same time, I remain extremely skeptical of the directions itself that the Supreme Court has proposed. I've extracted the directions below for completeness: 

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 this Court in Adalat Prasad (supra) and Subramanium Sethuraman (supra) 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 (supra) 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 by an order of this Court dated 10.03.2021.

8) All other points, which have been raised by the Amici Curiae in their preliminary report and written submissions and not considered herein, shall be the subject matter of deliberation by the aforementioned Committee. Any other issue relating to expeditious disposal of complaints under Section 138 of the Act shall also be considered by the Committee.

The Court concluded that these directions would help speed up disposal of cheque bouncing cases — only time will tell if that will be the case. What I am perturbed by is how the Court seems to have paid insufficient attention to detail while arriving at these conclusions, and failed to fully think through the kinds of unintended consequences which may ensue due to the proposed interventions in the process.

• Insufficient Data: The Constitution Bench order refers to the absolute number of pending cases (at around 35 Lakh), to remind us about how serious the problem is. But it is unclear whether there was any attempt to probe deeper behind the numbers. At another point in the order, some specific aspects  of the trial process are flagged as contributing to delays, such as the stage of issuing summons. But, these numbers don't tell us anything if we don't ask why are delays happening — is it because there are accused persons evading summons, or because courts are taking too long, or because accused persons choose to challenge the issuance of summons in the High Court which causes the trial to be stuck? All of these are different problems and require different solutions. This is just one example to show the kind of in-depth analysis that was needed to try and tailor solutions for this problem of delays in cheque bouncing cases — and it seems to be wholly absent from the order. It is not that what I am suggesting here is unthinkable; in fact, just recently a pilot study for identifying delays was commissioned by the Delhi High Court where this kind of a granular approach was adopted. The Supreme Court could have also taken the help of experts in the field — organisations such as Daksh have done wonderfully informative work on delays — but instead adopting something close to armchair problem-solving. 
• Unintended Consequences: Armchair problem-solving led the Court to propose three broad changes to how the existing system works to help reduce delays — directions (1) and (5). I fear that all of these directions might prove counterproductive and increase delays rather than curb them. First, we have the summary trial being converted to summons trial issue. Magistrates are now required to be more strict in converting cheque bouncing cases to summons trial cases, the thought being that more summary trials will obviously speed up disposal — great right? Maybe not. What this creates is yet another significant stage in the criminal process, which will be contested with arguments on both sides, and whichever side looses might well challenge the order before appellate courts which will only contribute to more delays. The same objection applies to Direction (5) which now allows for "deemed service" of summons where complaints are in respect of the same transaction — a court will need convincing of it being the same trial, which will take time, and accused persons will go and challenge that order issuing summons, as they already do. On top of which, I fear that this kind of "deemed service" might well be contrary to law — the Supreme Court has supplanted a judicial determination which occurs at the stage of charge to a prior stage. The key difference between these two is that while at that later stage the accused is present in court to contest the joinder of cases, at the stage of issuing summons we are asking the court to make that determination without giving the accused a right to be heard. 
• The Inherent Powers Issue: For the number of cheque bouncing trials that are pending, there are a fairly high number of 482 petitions / revision petitions pending before appellate courts where orders issuing summons are challenged — and often are successfully set aside. This is because it is quite common for totally unrelated persons to be summoned in such cases especially when companies are involved — complainants aren't expected to know internal management affairs, and usually arraign all known management personnel, some of whom may have had nothing to do with the cheque. In many of these cases, it is possible to prevent the irrelevant persons being summoned by asking the magistrates to be more careful. But in others, it is simply impossible to secure this outcome without letting the accused bring forth the relevant facts. Since the Supreme Court evidently agrees that the trial process can witness unbelievable delays and cause great hardship to parties, one would think that it would try and sponsor solutions which help curtail that process where possible. Instead, what the Court has done by Directions (6) and (7) is exactly the opposite — render it impossible for magistrates to try and do justice by curbing frivolous prosecutions. The Court could have looked at Section 251 and located therein a power to help magistrates achieve this objective [this issue has been discussed at length on the Blog] and create an environment which would have had beneficial consequences for all summons cases, going beyond the cheque bouncing offence alone. Instead, it chose to double-down on the logic which says magistrates cannot stop summons cases instituted on a complaint at any stage prior to judgment once an accused has been summoned. Not only does this worsen delays for trial courts, but also contributes to more 482 petitions in High Courts, which is where the aggrieved accused persons are likely to go seek reliefs.

Again, it might be that the Committee constituted by the Supreme Court suggests that the directions issued by the Constitution Bench might be reconsidered. It might also be that the directions end up dramatically reducing pendency for cheque bouncing cases and make this post look foolish. Even if that happens, I still think that the process of armchair problem-solving adopted by the Supreme Court in this instance is bound to create more problems than solutions, especially if the exercise is the product of a Constitution Bench.