Develop new proforma of cheque, Supreme Court urges RBI

Mangalore Today News Network

New Delhi, Mar 07, 2020: The Supreme Court suggested that the Reserve Bank of India (RBI) should consider developing a new proforma of cheque which includes purpose of payment, a step which the court opined would increase credibility of cheques and prevent its misuse, Hindustan Times reported.

 

Besides, the top court, with a view to speed up trial of accused in cheque bounce cases under Section 138 of the Negotiable Instruments Act (which fastens criminal liability for cheque bouncing), also asked banks to consider developing an information sharing mechanism to share details of the accused with the complainant and the police.

Such details should include email address, mobile phone number and address of the accused so that the presence of the accused at the trial can be ensured.

“With ensuring the credibility of cheques, it is equally important that cheques are not allowed to be misused giving cause to frivolous litigation. The Reserve Bank of India may consider developing a new proforma of cheques so as to include the purpose of payment, along with other information mentioned above to facilitate adjudication of real issues”, a bench of Chief Justice of India SA Bobde and justice L Nageswara Rao held.

The decision was given on March 5 in a cheque bounce case from Gujarat which was contested for more than 15 years in various courts right up to the Supreme Court.

The apex court noted that one of the main reasons for delay in deciding cases under section 138 was due to the absence of the accused before the court for trial.

“As per recent study, more than half of the pending cases, i.e. more than 18 lakh cases, are pending due to absence of accused”, the court observed.

In order to evolve a concerted mechanism for speedy adjudication of cheque bounce cases, the court registered a suo motu case titled ‘Expeditious trial of cases under Section 138 of NI Act, 1881’. It also requested senior advocate Sidharth Luthra and advocate K Parameshwar to assist the court as Amici Curiae (friend of the court) in the matter.

Notice was issued to the central government, all high courts, the Director General of Police of all the states and union territories, the National Legal Services Authority, RBI and Indian Bank Association, Mumbai as the representative of banking institutions. The case will be heard next on April 16.

The court, in its order, noted that the problem of absence of accused persisted despite service of summons to the accused through speed post, courier, e-mail or through a police officer.

In order to address this issue, the court said that banks, being an important stakeholder in such cases, have the responsibility to provide requisite details and facilitate speedy trial mandated by law.

“An information sharing mechanism may be developed where the banks share all the requisite details available of the accused, who is the account holder, with the complainant and the police for the purpose of execution of process. This may include a requirement to print relevant information, viz the email id, registered mobile number and permanent address of the account holder, on the cheque or dishonour memo informing the holder about the dishonour”, the court said.

Besides, the court also asked the RBI to evolve guidelines to facilitate procurement of requisite information for the trial of these cases.

“A separate software-based mechanism may be developed to track and ensure the service of process on the accused in cases relating to an offence under Section 138 of NI Act”, the court suggested.

It even batted for coercive measure against the accused including attachment of property to secure the presence of the accused.

“Further, a mechanism may be developed to ensure the presence of the accused even by way of coercive measure, if required, taking effect from Section 83 of Cr.P.C. which allows attachment of property, including movable property”, the judgment said.

In addition to the above, the Supreme Court also urged high courts to consider setting up of exclusive courts to deal with matters relating to Section 138 in places where the pendency of such cases is high.