Home » News » Pre-Litigation Mediation May Not be Feasible for Cheque Bounce Cases U/ S 138 NI Act: SC

Supreme Court on Tuesday observed that the pre-litigation mediation under NALSA recommendations for the settlement of cheque bounce cases under Section 138 of Negotiable Instrument Act, 1881 may not be feasible.

The bench headed by Chief Justice of India Sharad Arvind Bobde took cognizance of the issues related to the pre-litigation mediation and directed the authorities to consider post cognizance mediation in such cheque bounce cases.

The directions are issued by the apex court in connection to the suo moto case on expeditious trial of cheque dishonor cases under Section 138 of Negotiable Instrument Act in order to reduce the pendency of such cases.

Senior advocate Siddharth Luthra, an amicus curiae in the matter, submitted before the court that pre-litigation recommended under the draft scheme prepared by NALSA can only take place after cognizance as the Negotiable Instrument Act provides strict statutory limits for issuing notice, reply etc.

Hearing all the submissions, CJI directed NALSA to address the issues raised by amicus curiae and modify the scheme accordingly.

Inter alia, Supreme Court has directed the Registrar General of all the High Courts of the country and Director General of Police (DGP) of every state and UT to file their reply in connection to the preliminary report submitted by amicus curiae in connection to the expeditious trial of cheque dishonor cases.

The bench also stated that if the respondent parties will fail to file a reply, the concerned authorities shall remain present before the court at next date of hearing.

“In these circumstances, having regard to the importance of the matter, for the administration of justice in various states, we are of the view that the High Courts through their Registrar Generals/UTs through their DGPs shall submit the response to this court within four weeks. In case, the High Courts and states/UTs don’t submit their response, the Registrar Generals of HC and Director Generals of Police of States shall remain present in this court with necessary authorization from their government,” CJI directed.

In the October last year, the top court had asked all the High Courts to file their response to the preliminary report submitted by amicus curiae senior advocate Siddharth Luthra and advocate K Parameshwar and also to the draft scheme propose by NALSA.

But only 14 out of 25 High Court responded to the preliminary report and only 11 responded to the NALSA recommendations.

Amicus curiae Siddharth Luthra told the court that several opportunities were given to the respondents from March 2020, but everything went in vain and therefore urged for peremptory order so that if there is no response within a time, matter will be heard.

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