Legal Reforms To Implement And Expedite S. 138 Of NIA Cases

It is heartening to note that Supreme Court has taken cognizance of the fact that there are millions of cases pending under S. 138 in various courts in India. Therefore to resolve this issue Supreme Court has come out in a recent judgment giving guidelines on how to expedite S. 138 cases and to start the process of setting up special courts in 5 States to expedite the process of disposal of these cases this is a welcome step by the Supreme Court. 

In order to further strengthen this process, we are giving certain suggestions in the article, on the basis of how the law stands today and what jurisprudence has to be applied so that cases get disposed of faster.

Fundamentally, Section 138 is a quasi-criminal proceeding in order to create fear in the mind of the person who borrows and who gives post-dated cheques as a promise to pay. Therefore, it is important to note that it is originally a civil proceeding for the recovery of debt.

The criminal element adduced to this section is to create fear in the mind of the wrongdoer for this voluntary act per se. Yet the promise is not honoured and the cheques are wilfully dishonoured. Under s. 139 of NIA it reads that unless the contrary is proved, the presumption shall be in favour of the holder of the cheque.  This presumption is rebuttable by the accused by leading cogent evidence that there was no debt or liability.

Once such evidence is adduced and accepted by the Court, the evidentiary burden shifts back to the Complainant. It is important to note that the accused in such cases is being given three clear opportunities to settle the matter; i.e. 

1. When they receive the notice of dishonour from the Bank,
2. When they receive the notice from the Opposite Party to whom the cheque is being given in discharge of  the liability and,
3. When the option of settlement is raised in the Court. 

In the above circumstances, the Court dealing with S.138 case should take a practical approach by which the burden of proof of dishonour of cheque should be shifted to the accused.  Here itself the accused should be asked to prove their innocence rather than placing the burden of proof on the Complainant. Under a criminal proceeding, the complainant or the prosecution has to prove everything beyond a reasonable doubt. This strict principle should not be applied by the Court in these cases as these are quasi-criminal proceedings. 

We are of the view that as the Supreme Court has given guidelines that there should be the training for Judges who are dealing with S.138 cases, it is important for judges to get familiar with businesses and business practices. This will help them to understand the sufferings of businessmen due to the dishonour of cheques and delays in Court proceedings.

Once it is decided that it is the accused that has to be charge-sheeted. He should be given the opportunity to give his defence in Court so that the Complainant can resolve it amicably and get the case decided in maximum of 3-4 hearings.

This will be the right step in order to punish the guilty party that is to say someone voluntarily dishonours of cheque under S.138. In conclusion, we would say that credit is a life of the business. It is important that Court takes into account of this fact and decides a case on this principle rather than on strict criminal law procedures whereby the matter gets delayed indefinitely.