Since the criminalisation of defaulting of cheque payments in 1988 by amendment of the Negotiable Instruments Act 1881, the Supreme Court has made many attempts to contain and reduce mounting arrears created by such cases. Much of that good-natured effort, it would seem going by statistics, has proved to be in vain. Nevertheless, the Supreme Court cannot be faulted for not making an effort. This indefatigable spirit is perhaps what animated a Division Bench in Sanjabij Tari v. Kishore S. Borcar & Anr. [2025 INSC 1158 (“Sanjabij Tari”)] to pass a fresh series of guidelines / directives, to curb arrears in cheque bounce cases.
Getting the Right Pendency Data
There can be no doubting the general observation that there is a deluge of cheque bounce cases in the system. The Court gives a sense of perspective to this by citing data from the National Judicial Data Grid (NJDG) to state that the figures for Delhi alone are 6.5 Lakh cases as of 01.09.2025 (Para 33).
The tenor of the judgment suggests that it is this sky-high pendency figure which has prompted the Court into giving directions. This shows us the importance of having data at hand. Unfortunately, it also shows us the difficulty in getting the “right” data which we face in India. One would think that using NJDG is as good as it can get to make a statement about caseloads. But as Prashant Reddy and Chitrakshi Jain explain in Tareekh Pe Justice, NJDG cannot be seen as that gold-standard. The website itself accepts this, and carries a disclaimer on the figures being given and requires visitors to cross check the correctness of the information.
The ordinary citizen access for NJDG does not seem to allow searching for statute-specific data and perhaps this is a unique feature that is available to those with special access, so we do not know exactly what the Court saw (it would be nice for everyone to have this access!). It is safe to assume, though, that this data was also not wholly accurate, given how the NJDG data presentation leads to double counting. In its gross figures, the NJDG often adds smaller miscellaneous applications filed within cases, besides the cases themselves, leading to an inflation of the total figures.
Given that pendency is anyway quite high in cheque bounce cases, overestimation here perhaps does not cause huge problems. There may be other situations though where uncritical reliance on NJDG data by a Bench does cause serious trouble. One hopes that day does not come to pass.
What to make of the Guidelines?
Having got the data part out of the way, we can turn our attention to the guidelines / directions itself that are issued in Paragraph 36 of Sanjabij Tari. A part of this is the Court restating / tweaking earlier directives, perhaps with a hope that their enforcement with some renewed vigour will lead to better results. The old is complemented by the new, where emphasis appears to be on pushing the system to (1) secure swift appearance of accused parties and, linked to this, (2) encourage settlements once they have appeared. Within these, I only want to deal with one part viz. the Court’s move to remove application of Section 223 of the Bharatiya Nagarik Suraksha Sanhita 2023 ['BNSS'] from these proceedings [Guideline E].
Section 223 BNSS is a new clause (unlike a lot of the statute) by which a court is now required to give the accused an opportunity to be heard before the court takes cognizance of an offence. The Court has approved the view taken by a Karnataka High Court judgment without adding any explanation. This view is that the Section 223 pre-cognizance notice part will not apply to cheque bounce cases since (i) these case are prosecuted under a special law (Negotiable Instruments Act 1881) and (ii) the offence is quasi-criminal where speed in the trial is key.
It is unfortunate that the Court has dealt with a legal issue in such a summary fashion, because on closer scrutiny neither of these reasons hold water. A special criminal law must prescribe a different method of proceeding for it to override the general procedural law in the BNSS, and there is nothing within Section 142 of the Negotiable Instruments Act 1881 which overrides Section 223 BNSS. This is why the Supreme Court itself has extended Section 223 BNSS to other special criminal laws, such as the Prevention of Money Laundering Act 2002.
Which naturally brings up the other point — you need this pre-cognizance hearing for serious crimes like money laundering, but not ‘quasi-crimes’ like cheque bouncing. The nature of the cheque bouncing crime is an issue which came up in another context recently on the blog — the right of a victim to file an appeal in such cases. While on the hand courts see the cheque bounce crime as 'quasi-criminal', a bench of the Supreme Court in Celestium Financial emphasised on the very clearly 'criminal' nature of this offence to hold that the complainant in such cases was at par with victims in other, traditional, offences. Interestingly, Sanjabij Tari neither cites nor refers to Celestium Financial.
One may disagree with the approach in Celestium Financial and want to support the view that a cheque bounce case is really 'civil sheep in wolf's clothing'. Unfortunately though, this view is just not supported by law. There is no legally defined category of 'quasi-crime' in Indian law and when the legislature decides to deal with offending conduct by means other than criminal proceedings, it has prescribed punishments other than jail time. No matter how innocuous we make cheque bounce cases appear by likening them to civil disputes, it does not change the reality that a conviction for this offence can result in imprisonment and loss of liberty — the core component of proper crime.
Conclusion
There is no disputing the fact that cheque bounce cases contribute hugely to arrears within the legal system, making it a natural target for attention by the Supreme Court. Prior to Sanjabij Tari, multiple attempts have been made by issuing directives and guidelines but without lasting or measurable success, and whether this most recent round of efforts will meet a different fate is something only time can tell.
At the same time though, if we look deeper, perhaps there is a different lesson to be learnt here, especially with the repeated reference by the Supreme Court to the idea that cheque bounce are not real crimes but 'quasi-criminal' in nature. Why not actually take that step and conjure a set of remedies that deliver on this premise by changing the infraction in question from being a crime with possible jail time to something which can be dealt with outside of the proper legal system by means of penalties and other, non-penal, sanctions. The judiciary cannot take that step, as much as it may want to.
It is soon going to be four decades since Parliament decided to experiment with levying penal sanctions for dishonour of cheques. The experience of these past four decades suggest that whatever benefits the move has brought to financial transactions, it is significantly outweighed by the harm that it has caused to the integrity and stability of the judicial system. Maybe it is time to call it a day on the offence of cheque bouncing altogether?
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