CHEQUE OUT THE SETTLEMENT OPTION - TOI Ahmedabad-01 May

CHEQUE OUT THE SETTLEMENT OPTION

With over 5.7 lakh cheque bouncing cases pending in courts in Maharashtra and just 56 courts to handle them exclusively, judges say amicable solutions should be encouraged

Swati Deshpande I TNN

The disposal rate is a mere 5-10%. Convictions are very low. The delay in disposal is very long—sometimes crossing even seven years. The pendency, by its sheer numbers, is unmanageable. There are over 5.7 lakh cheque bouncing cases in Maharashtra with just 56 courts to handle them exclusively. Given the humungous pile up, the judiciary is suggesting that the best way to deal with the situation is by encouraging parties to settle the matter amicably. “This is necessary,’’ suggested Justice Dilip Bhosale of the Bombay High Court at a conference on case management of bounced cheques, “because it would not be possible to overnight increase the strength of judges and provide them with infrastructure.’’ The Chief Justice of India KG Balakrishnan said more magistrates to exclusively deal with complaints of dud cheques is the need of the hour.But even he agreed that amicable settlements should be encouraged in these cases.He,however,added that the settlement ought to be spurred on by courts preferably at the start of the criminal trial. He said in many cases parties try and settle at the fag end of an appeal after several years have elapsed from the date of offence and at that stage courts could perhaps impose costs for any such settlement.The high court, taking the lead to promote settlement through lok adalats, organised one especially for cheque bouncing cases on Saturday. The result was that of the 14,000 referred, 9,500 were settled. Chief Justice Swatanter Kumar, who addressed the judges and magistrates while outlining the current grim scenario of a huge backlog of cheque bouncing cases, also stressed on the need for expeditious disposal. Mutual settlement of cases involving dishonoured cheques has been encouraged by the Supreme Court too. In Mumbai alone, out of the 1.62 lakh cheque bouncing cases pending, 65% pertain to financial institutions and courts ought to “make concerted efforts to convince such institutions to go before a lok adalat for amicable settlements as provided under section 147 of the Negotiable Instruments Act,’’ said Justice Bhosale. For the common man, a settlement is an option where he may agree to an option of easy instalments given to the accused in order to recover the money instead of waiting for years for a conviction which the accused may only go on to challenge. But clearly, say legal experts, the provision for settlement needs to be exercised more frequently, because the present reality in metropolitan courts of getting the next date of hearing six to nine months later even if one of the party fails to turn up in court is not just disheartening and crushing, but puts the victim in a vulnerable spot where he does not know how much the trial is going to cost him eventually. Justice D Y Chandrachud, who along with former Chief Ju s t i c e Dalveer Bhandari in February 2005 had passed a landmark judgment directing the setting up of 100 additional judges across the state to deal with the rise in cheque bouncing cases,said case management was a skill that judges need to hone. He, however, said that “judging was very different from the concept of managerial efficiency and for the latter inputs from information technology and management experts need to be encouraged’’. “The judicial system itself cannot acquire efficacy, credibility or respectability if a complaint of this nature takes five to seven years before it is finally adjudicated by the Metropolitan Magistrate. It has become imperative for us to take all necessary steps to ensure that these complaints are disposed of expeditiously and unscrupulous people do not take undue advantage of the pendency of these complaints before the courts,’’ the HC had said in 2005. Anandji, a social activist, a few months ago wrote to the Chief Justice to ask whether the strength of the judges was increased following the judgment in two months as directed. He said he has received no reply. But the process of appointing over 200 new judicial officers is currently on by the high court. As per l aw, ch e q u e bouncing cases have to be decided within six months and require a summary trial with only three factors to be proved: that the cheque was issued, that it bounced, that a notice was issued to the accused who was given 15 days to make the payment but failed. However, legal experts observe that across the state most magistrates do not follow the system of a summary trial which can be wrapped up even in a week and chose instead to go through the time-consuming process of a regular trial. The ‘summary trial provision’ was introduced with the aim to speed up disposal of cases but it would work only if magistrates follow it. UNDER THE LAW Section 138 of the Negotiable Instruments Act says: Dishonour of cheque for insufficiency of funds in the account where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount to another person from that account is returned by the bank unpaid, either because of the amount of money standing to the credit of that amount is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence. Punishment: Imprisonment up to a year or fine which may extend to twice the amount of the cheque, or both. Cases should be disposed of within six months high courts have held. THE WAY OUT Last December, the Supreme Court said an accused in a cheque bouncing case can escape conviction by settling the dispute and paying the compounding fee. Interpreting section 147 of the Negotiable Instruments Act, it said every offence committed under the act gave the accused the liberty to escape conviction and jail by paying the compounding fee. IT’S NOT A CHEAP FIGHT Filing cheque bouncing complaints will soon become costlier. The Maharashtra Cabinet okayed a proposal by the law department to levy higher fees for such complaints, but the Bombay Court Fees Act is yet to be amended. The court fee payable for cheque bouncing complaints will go up from the fixed Rs 200 to a maximum of Rs 1.5 lakh. According to the revised rules, the court fee will increase gradually with every Rs 10,000. GUIDELINES FOR SPEEDIER DISPOSAL OF CASES The complainant should file his affidavit in lieu of examination in chief with all documents to be exhibited in court The accused can crossexamine the victim in court The accused can give evidence as defence witness on affidavit The magistrate must direct the complainant to send summons either by speed post, courier or even by e-mail and need not depend on the police force The courts can use the police staff attached to it after court working hours to serve summons on accused or witnesses If the accused refuses to accept the summons it will still be considered as having been served and the trial will proceed The alleged victim should avoid naming unnecessary and irrelevant people as accused especially if a company is involved To avoid delay in disposal of cases, the complainant can delete names of some of the accused which may have been wrongly incorporated earlier Summons on company directors can be sent to the company’s address