IN RE: EXPEDITIOUS TRIAL OF CASES UNDER SECTION 138 OF N.I. ACT 1881 versus . on 19 May 2022

1. By a judgment of the Constitution Bench of this Court in Re:Expeditious Trial of Cases under Section 138 of N.I. Act, 1881[1]various directions were issued with respect to the conduct of trials ofcomplaints under Section 138 of the Negotiable Instruments Act.

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D2. This court by its subsequent order dated 31.03.2021 had requiredHigh Courts to file status reports indicating compliance with the directionscontained in the judgment and as to whether rules were framedappropriately in line with the judgment. Similarly, the necessaryamendments to the Police Manuals etc. had to be carried out. As ondate, all High Courts except the Patna High Court have complied withEthe directions and proposed the amended Rules. In many states, amendedrules have even been notified.

3. On 16.04.2021, by the said judgment of the Larger Bench, anexpert Committee was constituted to consider various suggestions withrespect to streamlining the procedure of arresting the judicial docket, inFregard to complaints and trials for offences under the NegotiableInstruments Act. The Expert Committee, by its report has suggested thecreation of de novo Special NI Courts by the Central Government videits powers under Article 247 to tackle the problem of docket explosion.The Expert Committee proposed a scheme with two grades of judges atGthe trial court level and two at the appellate/revision stage. According tothe Expert Committee’s calculations, the establishment of these specialNI Courts would require recruitment of 1,826 special judicial officersand a total cost of Rs 126.59 crores.

4. The amici curiae urged, in the hearing that the suggestion ofcreation of special courts with the proposed staffing pattern may not befeasible or practical, as it would not be possible to immediately establishde novo courts and recruit fresh candidates and support staff. It wasurged that the option of appointing retired judicial/administrative officerswho have worked and discharged quasi-judicial functions such as retiredTehsildars, Special executive Magistrates, Registrars of Tribunals andstatutory authorities and High Courts etc officers as Special Judicial/Metropolitan Magistrates for a fixed pay be explored.

5. Special Magistrate’s Courts for conducting trial of cases underthe NI Act can be constituted under Section 18 of Cr.P.C, 1973 (alongwith S.13, Cr.P.C). There is authority for this course of action – (ref.Kadra Pahadiyav. Stateof Bihar,[(1997) 4 SCC 287]. Retired publicservants, such as tehsildars and magistrates can be considered forappointment as Special Judicial/Metropolitan magistrates. Retiredgovernment personnel and retired court staff could be appointed foroperationalising these courts.

6. The report of the Expert Committee disclosed that as on08.11.2021, 26,07,166 complaints were pending at various stages beforethe Courts seized of trial of offences under the NI Act. As on 13.04.2022,this pendency has increased to 33,44,290. This is an increase in pendencyof 7,37,124 cases in a period of just over 5 months. As per the dataavailable on 08.11.2021, NI Act cases contribute to 8.81% of the totalcriminal cases pending in the courts. Further, 11.82% of the total criminalcases that are stagnating due to appearance/service related issues areNI Act cases.

7. The amici curiae suggest a pilot study to test the scheme ofemploying retired judicial officers and retired court staff to operationalisethe Special Courts under the NIAct. It wassuggested that this schemecould be tested on a pilot basis in 5 judicial districts with the highestpendency in the 5 states with the highest pendency (namely, Maharashtra,Rajasthan, Gujarat, Delhi and Uttar Pradesh) and the viability of utilisingservices of retired judicial officers can be examined based on the resultsof the pilot study.

8. This High Court has by its order dated 27.04.2022 directed theHigh Courts in the states of Maharashtra, Rajasthan, Gujarat, Delhi and A

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AUttar Pradesh to respond to the suggestions of the amici curiae. Theirresponses are as under:

a.High Court of Bombay – The High Court has identifiedNagpur, Nashik, Thane, Pune and CMM, Mumbai as the 5districts with highest pendency.

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b.High Court of Rajasthan – The High Court has identifiedJaipur Metro-I, Jaipur Metro-II, Jodhpur Metro, Udaipurand Ajmer as the 5 districts with highest pendency.

c.High Court Allahabad – The High Court has identifiedLucknow, Agra, Kanpur, Gautambudh Nagar and GhaziabadCas the 5 districts with the highest pendency.

d.High Court of Gujarat – The High Court has givenconcurrence for establishing one additional court to try casesunder S. 138 of the N.I. Act as per the pilot project.

De.High Court of Delhi: Delhi already has 72 Special Courtsfor cases under the NI Act.

9. This Court had on 12.05.2022 indicated that the amici curiaemay place a detailed proposal for the pilot study, which has since beenfiled.

E10. Having considered the suggestions made by the amici theCourt hereby directs that the pilot study shall be conducted in the mannerhereafter indicated. The guidelines covering the pilot study shall be asunder:

•Duration of Study: The pilot study shall be conducted forFa duration of 1 year from 01.09.2022 to 31.08.2023.

•Number of Courts: The pilot study shall be conducted in25 Special Courts in total. One Special Court shall beestablished in each of the 5 judicial districts which havebeen identified as having thehighest pendency by each ofGthe five High Courts of the states (mentioned above) withthe highest pendency of NI Act cases.

•Presiding Officers and Staff: For operationalising theSpecial Courts under this pilot study, retired judicial officersand retired court staff, preferably those who have retiredHwithin the past 5 years, may be employed. The concerned IN RE: EXPEDITIOUS TRIAL OF CASES UNDER SECTION 138OF N.I. ACT 1881 [S. RAVINDRA BHAT, J.]

High Court shall ensure that no vacancy arises, during thisperiod.

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•Timeline for Identification of Requirements: Theinfrastructural requirements, including informationtechnology support for video conferencing facilities, shouldbe identified and secured by July 2022. Similarly, theBpresiding officers, support staff and human resourcesrequired for operationalising these Special Courts and theircontractual terms should be finalised by the end of July2022.

•Training: The identified judicial officers, who are to presideover the Special Courts, be imparted specialised training. Afour-week training programme by the State JudicialAcademies on topics of substantive, procedure and evidencelaw related to the offences under the NI Act shall beconducted for them. Further, a detailed ready reckoner withgoverning case law and practice directions may be preparedand circulated to assist them in the adjudicatory exercise.

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•Pay and Service duration: The High Court concernedshould ensure that the presiding officers and court staff foroperationalising the Special Courts can be hired oncontractual basis for one year for the duration of the pilotstudy. It is further proposed that they be paid a fixedhonorarium in accordance with their standing prior toretirement.

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•Type of Cases: The Special Courts shall adjudicate upononly those cases in which summons have been duly servedand the accused has entered appearance through a lawyeror in person. The oldest pending cases in which service ofsummons is complete must be identified in a chronologicalmanner (oldest first). It must be ensured that no case whereservice of summons is incomplete is sent to the SpecialCourts.

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•Timeline for Identification of Cases: All such casesshould be identified by July and a comprehensive list ofthese cases should be posted before the regular Magistratesexpeditiously so that cases which can be settled are referred H

to mediation immediately and are hence, not part of thecases to be sent to the Special Courts. The finalcomprehensive list of cases, where service is complete andthe matters are not referred to mediation, must be identifiedby the end of July.

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B•Advance List and Weekly List: An advance list of allmatters to be taken up by the Special Courts should becirculated by the end of July to give adequate notice to allcounsel that such matters shall be taken up on priority basisby the respective Special Courts. Further, weekly lists shallalso be published notifying all the matters listed for finalCdisposal.

•Functioning of Courts: The working days and workinghours of the Special Courts should be notified by the end ofJuly along with the circulation of the Advance List.

D•Procedure: The Special Courts set up for the pilot studyshall follow the same procedure with respect to trial asmandated by the Criminal Procedure Code, 1973. In orderto ensure speedy disposal of cases, adjournments shouldnot be routinely given, especially on the ground of lack ofnotice. Further examination of outstation witnesses may beEconducted online by following appropriate protocol so thatthe delay in trial due to commute of the witnesses is avoided.

•Mediation: A list or panel of mediators must be identifiedby the end of July and circulated to all the presiding officersof the Special Court. In the event that the accused indicatesFwillingness to settleatstageoftrialbeforethe Special Court,thepresidingofficermustreferthecase to time-bound, onlinemediation before one of the identified mediators to preventfurther delays.

•Data Collection: A weekly statement of disposal shall beGsent to the Registrar General of the concerned High Courtswho shall actively monitor the progress of the pilot study.Quarterly statements of disposal must be sent to the SC. AFacilitation Officer may be appointed for the Special Courtsto assist in collection of the data, in curating the cause listsand in conducting weekly review meetings with PresidingH

IN RE: EXPEDITIOUS TRIAL OF CASES UNDER SECTION 138OF N.I. ACT 1881 [S. RAVINDRA BHAT, J.]

Officers to identify any additional bottlenecks or issueswhich need to be assessed for future planning purposes.

11. The Secretary General of this Court shall ensure that a copyof the present order is directly communicated to the Registrar Generalsof the said five High Courts, who shall place it before the Hon’ble ChiefJustice for immediate action. To report progress and compliance, eachof the said five High Courts shall file an affidavit on or before 21.07.2022.List on 26.07.2022 to review the further proceeding.

Bibhuti Bhushan Bose

Directions issued.

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