By: Amit Kumar Bhowmik
@the_news_21
Mumbai: The (mal) functioning of the Courts has truly further deteriorated, particularly, in the last two decades. The hope of securing justice is now, as matters stand, truly, very slender. Perhaps, that is why people resort to ‘alternative remedies’, by placing their grievances for ‘arbitration’ before Mafia dons and their lackeys. Strong arm tactics yield quicker results. To many, this form of ‘settlement’ is preferable to waiting in frustration in Courts; pampering costly lawyers; whole-sale bribery on all levels, only for the case to be adjourned repeatedly, over decades.
It is, thus, of little wonder that the public’s faith in the judiciary has rapidly eroded over time. The clogs in the already rusted and dysfunctional wheels of the justice system, are often the judicial officers themselves, who, once ensconced comfortably in the seat of authority; holding power literally over life and death, laze through crowded dockets, confident that once selected, the worst that can happen to them is a transfer, which, in any event, can be easily ‘stayed’ or even stopped, for reasons that cannot be expounded here!
Since the last eight years, I have been representing the Complaint before the District Courts in Pune, in a complaint made under Section 138 of the Negotiable Instruments Act (NIA). My client has had cheques totaling Rs 2.50 crores issued to him in a land transaction, dishonored. The accused are land developers, who wield fearful influence, including with the Courts, which seems apparent.
Last week, it was for the seventh time that Non- Bailable Warrants (NBWs) have been issued to ensure their presence before the Court. The trick for the accused is to get the NBWs cancelled by appearing on the day before the date of the hearing and having them cancelled. The clerks and staff of the Courts are in collusion with them, for a consideration, of course!
On the date of the hearing, the advocate representing the accused will seek adjournment, with the plea that they are unable to attend as they are unwell or out of station. The disinterested judicial officer, oblivious to the suffering of the Complainant, will automatically adjourn the matter by six to eight weeks. Sometimes, much longer, depending on the amount of grease money spread.
The Complainant in a cheque bouncing matter, is always at the receiving end. He has to pay the Court fees before lodging the Complaint, which is quite substantial. He has to reimburse his lawyers with endless sums, only to have the matter adjourned on some pretext or other even though these are Summary proceedings which, at least on paper, must be heard finally and decided within six months!
The Complainant has to spend for service of the NBWs upon the police station to be, in turn, served on the Accused, where he has to mandatorily fork out ‘baksheesh’. Or else, the Service Report will be returned with the remark that the accused was out of station! Hence, another NBW will be issued and yet another adjournment.
Section 138 of the NIA pertains to dishonor of cheques for insufficiency of funds in the account when issued. The punishment prescribed is imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of the cheque, or with both.
To put the Complaints to even greater prejudice, the Ministry of Finance vide its ‘Statement of Reason’ dated June 8, 2020 has announced various steps to provide relief from the economic stress caused due to the Covid-19 pandemic. One such proposal was the amendment of 19 Acts to decriminalize multiple minor economic offences, including that under Section 138 of the Negotiable Instruments Act, 1881.
While inviting these comments, the Finance Ministry has made it clear that these actions to be taken for decriminalization of minor offences are expected to go a long way in improving the ease of doing business and helping unclog the Court system and prisons. But amounts defrauded by issuing dud cheques are very often, of leviathan amounts. I say that this horse-blinkered proposal is in order to shield the accused. Decriminalization will remove fear of doing wrong.
Currently, the Drawer of the Negotiable Instrument, like cheques, still has a fear of facing criminal punishment apart from the penalty of repayment of twice the amount. The proposed change in law will absolve such fear. The instrument of the cheque will lose its good faith and trust in the market, thereby, lowering the number of transactions through them.
The provision under Section 138 NIA itself has a safeguard for an honest drawer of the cheque. It is only after receiving the Notice of demand from the payee or holder in due course of time and upon expiration of 15 days from such receipt, that the offence is deemed to have been committed. In this regard, the Drawer of such cheque(s) has an opportunity to make payment within 15 days and not face criminal action.
Further, under Section 147 of NIA, these offences are compoundable. That is, both parties can amicably settle at any stage of the proceedings and the Drawer can, thus, escape further prosecution.
Proceedings under Section 138 NIA attract lesser Court fee, as compared with Civil proceedings. Upon decriminalizing Section 138 NIA, the holders of such cheques would then be required to turn to the Civil Courts to get respite. All matters pertaining to Section 138 NIA will then add to the work-load of Civil Courts. I am quite distressed to find that the staff of Courts, in any event, largely shirk off their responsibilities unless they are given ex-gratia payment in cash.
Complaints to the higher echelon in the judiciary are tossed into dust-bins and are akin to pouring water on a duck’s back! The proof is the continuing lethargy, indifference and insensitivity. This would also take away the right of the holders to recover up to 20 per cent interim compensation of the total cheque amount. This sum can be recovered right at the beginning of the Trial u/s 143A of the NI Act.
The proposed amendment is hopelessly chaotic and will adversely affect the country’s economy. If the protective umbrella of prosecution for dishonored cheques is taken away, future cheques may not remain any more a preferred mode of payment for business and personal transactions, further breaking down an already collapsing economy.
The Pathway to Hell is paved with good intentions! Therefore, the element of criminal prosecution that stands formed as part of the NIA, as ends of justice, must not be altered. To the best of my knowledge, the Supreme Court has not taken any steps. But it is more than likely, that politicians, in order to protect their favored defaulters, may pass a Bill which will be akin to cutting off the branch on which one is perched!
The Apex Court has, in fact, in ‘Suo motu Writ Petition (Cri) No: 2 of 2021’, on April 16 2021 in its 27 pages order and directions, in which Senior Counsel, Siddharth Luthra was appointed as Amicus Curiae has, inter–alia, set out:
“This gargantuan pendency of complaints filed under Section 138 of the Act has had an adverse effect in disposal of other criminal cases. There was an imminent need for remedying the situation which was addressed by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002. Sections 143 to 147 were inserted in the Act, which came into force on 06.02.2003. Section 143 of the Act empowers the Court to try complaints filed under Section 138 of the Act summarily, notwithstanding anything contained in the Code of Criminal Procedure, 1973 (hereinafter, ‘the Code’). Sub-section (3) of Section 143 stipulates that an endeavor must be made to conclude the trial within six months from the date of filing of the complaint.
Section 144 deals with the mode of service of summons. Section 145 postulates that the evidence of the complainant given by him on affidavit may be read as evidence in any inquiry, trial or other proceeding under the Code. Bank’s slip or memo denoting that the cheque has been dishonored is presumed to be prima facie evidence of the fact of dishonor of the cheque, according to Section146. Section 147 makes offences punishable under the Act compoundable.’
The Supreme Court further noted:
‘The situation has not improved as Courts continue to struggle with the humongous pendency of complaints under Section 138 of the Act. The preliminary report submitted by the learned Amicus Curiae shows that as on 31.12.2019, the total number of criminal cases pending was 2.31 crores, out of which 35.16 lakh pertained to Section 138 of the Act.
The reasons for the backlog of cases, according to the learned Amici Curiae, is that while there is a steady increase in the institution of complaints every year, the rate of disposal does not match the rate of institutions of complaints. Delay in disposal of the complaints under Section 138 of the Act has been due to reasons which we shall deal with in this order.’
The Amici Curiae identified several major issues for the stack-up of Cases under Section 138 NIA from the responses filed by the State Governments and the Union Territories, foremost of which was that Summary Trials are routinely converted to Summons Trials in a mechanical manner. His suggestion in his preliminary note that the High Courts should issue directions to the Trial Courts for recording cogent and sufficient reasons before converting a Summary Trial to Summons Trial, have been accepted by the High Courts and was recorded in the order.
But, although the intentions of the Full Bench of the Supreme Court are indeed lofty and noble, there has been many a slip between the cup and the lip. A year has since passed, but the spirit of this land-mark order and observations has, I find, unfortunately, not filtered down to the Trial Courts! I sincerely doubt if any of the judicial officers; even the Principal Judges, are aware of it.
Otherwise, why would my client, who is a senior citizen afflicted with several health issues, have to continue to wait for the last eight years when the Trial ought to have been concluded within six months?
The Principal Judges of the District Courts, seem to be least concerned to the anguish and plight of litigants and such monstrous injustice. In the first instance, they and other judicial officers must become aware of these facts enshrined in this Suo motu order, and even more, they ought to be made to abide by the directions contained therein. Stern disciplinary action must be taken, without fear or favour, against those who flout these directions. I concede, however, that that might be wishful thinking!
Meanwhile, my client and I wait with bated breath for the next public debacle which will be brought about by the Finance Ministry, apparently, only to protect the privileged few, whose liabilities vis-a-vis the dishonored cheques fiasco runs into thousands of crores of rupees. They will then have succeeded in aborting and sabotaging our floundering markets!
About the Author: Amit Kumar Bhowmik is a Pune-based lawyer, practicing, mostly, on the criminal side. But he also has represented cases in other branches of the law, including matrimonial matters. Although he is based in Pune since the last thirty years, he makes sorties to the Bombay High Court; other High Courts, as also to the Supreme Court on his work, (which has been kept, largely, on hold due to the pandemic!).
He can be contacted on email – amitbhowmik1@gmail.com
