Supreme Court proposes fast-track courts to clear dishonoured cheque cases

A view of the Supreme Court of India. File   | Photo Credit: Shanker Chakravarty

A Constitution Bench of the Supreme Court on Thursday proposed setting up fast-track courts for a limited time to clear dishonoured cheque cases, which form over 30% of the backlog in courts across the country.

The five-judge Bench led by Chief Justice of India Sharad A. Bobde termed the pendency of cheques cases a “grotesque” problem. The Bench suggested that even retired judges could preside in these “temporary” additional courts to clear pending cheque cases.

Solicitor General Tushar Mehta welcomed the proposal of additional courts from the Bench, but said the idea would require “wide-ranging consultations” at the highest level.

Mr. Mehta’s submission indicated a softening of its earlier position against setting up additional courts to exclusively hear cheque cases.

On March 2, the Finance Ministry had issued a memorandum suggesting other alternatives to curb pendency in cheque dishonour disputes.

Power, obligation

But, on March 3, a three-judge Bench led by Chief Justice Bobde dismissed the Ministry’s memorandum and reminded the government that it had both power and an obligation under Article 247 of the Constitution to set up “additional courts” to better the administration of laws enacted by Parliament, including the Negotiable Instruments Act, which deals with cheques. The CJI, to buttress the importance of the issue, overnight placed the issue before a Constitution Bench.

Taking the cue, on Wednesday, Mr. Mehta, who was asked to be present before the Constitution Bench, said the government was open to the idea but would need time to hold detailed consultations on the court’s proposal.

The court agreed and scheduled a hearing for March 10.

The apex court had registered a suo motu case last year to evolve a “concerted” and “coordinated” mechanism for expeditious disposal of cheque cases. The court had found that over 35 lakh cheque bounce cases were pending in courts all over. The court had appointed senior advocate Siddharth Luthra and advocate K. Parameshwar as amici curiae in the suo motu case.

In their report, Mr. Luthra and Mr. Parameshwar made various suggestions for preventing delay in cheque dishonour cases.

These include having the Centre, Reserve Bank of India and the Indian Banks Association create a nodal service agency for effective service of summons through electronic process.

They have also recommended empowering local Magistrates to order attachment of the bank account of an absconding accused to the extent of the cheque amount.

“Since bank accounts are linked to Aadhaar, the court can always issue directions to the bank concerned to attach all bank accounts to the extent of the cheque amount,” their report in the Supreme Court explained.

Unique number

One of their other suggestions was generating a unique number for a dishonour memo, which when fed into a system would reveal the details of the account holder.

“The online banking platform may also be modified to ensure that once there is a dishonour on grounds of insufficient funds, a computer generated notice may automatically be sent to the account holder stating that the cheque has been dishonoured due to insufficient funds,” their report said.

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Printable version | Apr 23, 2021 1:51:38 PM |

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