Supreme Court sets up special courts in 5 states for cheque-bounce cases

To function in Delhi, Gujarat, Maharashtra, Rajasthan and UP from Sept 1

In a relief to victims in cheque-bounce cases, the Supreme Court on Thursday ordered setting up of special courts headed by retired judges in the five states with the most number of pending cases. The three-judge Bench of Justice L Nageswara Rao, Justice B R Gavai, and Justice S Ravindra Bhat in this suo motu case said the special courts would be set up from September 1 in Delhi, Gujarat, Maharashtra, Rajasthan, and Uttar Pradesh, to hear such cases under Section 138 of the Negotiable Instruments Act (cheque dishonour).

“We have incorporated the suggestions of the amicus curiae (friend of the court) concerning the setting up of the pilot courts in the five districts in each of the five states and we have given the timelines also,” the bench said.

The court directed its secretary-general to communicate the order to the registrar general of the High Courts of the five states and directed them to file an affidavit on compliance by July 21, 2022. The next hearing on the matter has been slated for July 26. The report submitted by Amicus read, “It is suggested that the high courts must utilise the services of retired judicial officers for this purpose. This scheme could be tested on a pilot basis in five states with the highest pendency.”

The amici curiae had reported on May 1 that there has been an increase in pendency of 737,124 cheque dishonour cases in just five months. Pending cases increased from 2,607,166 in November last year to 3,344,290 as of April 13, 2022.

The states with the highest pendency of cases are Rajasthan (479,774), Gujarat (437,979), Delhi (408,992), and Uttar Pradesh (266,777).

Bharat Chugh, Supreme Court advocate and a former judge, said, “Retired judges have the legal acumen to head special courts. The stakeholders in the case, one who is the victim and the other party who has issued the cheque and has a right to a fair trial, will benefit from establishing these courts. Moreover, India’s image improves as an attractive destination where commercial disputes are decided promptly.”