Supreme Court recommends for amendment to Negotiable Instrument Act giving magistrate power to recall summons

Criminal SLP No. 5464 of 2016 was filed for dishonour of two cheques of amount of Rs.1,70,000/-. Case was filed under section 138 of NI Act.

Chapter XVII inserted in the Act, containing Sections 138 to 142, came into force on 01.04.1989. Dishonour of cheques for insufficiency of funds was made punishable with imprisonment for a term of one year or with fine which may extend to twice the amount of the cheque as per Section 138. Section 139 dealt with the presumption in favour of the holder that the cheque received was for discharge, in whole or in part, of any debt or other liability. The defence which may not be allowed in prosecution under Section 138 of the Act is governed by Section 140. Section 141 pertains to offences by companies. Section 142 lays down conditions under which cognizance of offences may be taken under Section 138.

But Section 138 of the NI Act was not decided within reasonable period resulting in pending litigation.Still courts continue to struggle with humongous pendency of complaints under Section 138 of the Act.

The learned Amici brought to the notice that there were separate complaints filed on same matter under section 138 Act. So he suggested that one way of reducing time spent on service of summons is to treat service of summons served in one complaint pertaining to transaction as deemed service for all complaints in relation to said transaction.

Accordingly, the High
Courts are requested to issue practice directions to Trial Courts to treat service of summons in one complaint forming part of a transaction, & file it before same court relating to dishonour of cheques.

After discuss with amicus Bench concluded that Inquiry shall be conducted on complaint U/S 138 of Act to check grounds to proceed against the accused, when he resides beyond territorial jurisdiction of court.

Section 258 of Code is not applicable to complaint under Section 138 of the Act & findings to contrary in Meters & Instruments (supra) do not lay down correct law. To conclusively deal with this aspect, amendment to Act empowering Trial Courts to reconsider/recall summons in respect of complaints u/s 138 shall be considered by Committee constituted by an order of this Court dated 10.03.2021.

The court also recommends for amendments where 1 trial should take pace against one person having multiple case under section 138 of the Act.

The matter will be listed for hearing after 8 weeks.

In Re Expeditious Trial Of Cases Under Section 138 of N.I Act.

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