Madras High Court Issues Directions To Clear Backlog Of Cheque Bounce Cases In Magistrate Courts

“Judicial notice can be taken of the fact that cases under Section 138 of the Negotiable Instruments Act, 1881 are clogging the Magistrate Courts for years on account of various reasons. The very purpose of the introduction of Chapter XVII of the Negotiable Instruments Act, 1881 would be defeated on account of the delay involved in the disposal of such matters,” the court said.

Justice Anand Venkatesh noted that the pendency of cases defeats the purpose for the introduction of Chapter XVII of the Act. The court added that though the Constitutional Courts had issued directions in this regard, lack of effective oversight mechanisms have resulted in the directions remaining mere paper directives.

“Despite the aforesaid directions which are undoubtedly law within the meaning of Article 141 of the Constitution, this Court has found, time and again, that there is a considerable slip between the law as declared and the law that is practically administered day-to-day in the Magistrate Courts. Lack of effective oversight mechanisms have resulted in a situation where the directions of the Supreme Court have largely remained paper directives,” the court said.

The court thus directed that when complaints and filed with supporting documents, the courts should scrutinize the complaint. Further, the Registry should ensure that the complaint and the documents are accompanied by a process memorandum under Rule 29(13) of the Criminal Rules of Practice, 2019 with sufficient number of copies of the complaint for service on each accused together with duly stamped envelopes and acknowledgment cards/proof of delivery bearing the address of the accused persons. While numbering the complaint, scrutiny must be limited to examining whether the complaint is as per the prescribed format with necessary averments to constitute an offence under Section 138 of the Act.

The court also warned against receiving complaints and adjourning them for long periods under the pretext of “check and call”. The court said that if scrutiny could not be completed by the next day, it should be completed within 7 working days.

Further, the court directed that before issuing process, the Magistrate was not bound to call the complainant and examine him upon oath. The court said that the Magistrate, as a rule, may rely on the verification in the form of the affidavit filed in support of the complaint. The court added that when the accused was residing outside the territorial jurisdiction of the court, the Magistrate should conduct an inquiry as mandated by Section 225 of the BNSS, 2023. The court said that Section 225(2) of the Code would be inapplicable to the complaints under Section 138 of the NI Act in respect of examination of witnesses on oath.

The court also said that the courts were expected to adopt a pragmatic and realistic approach while issuing summons.

“The Court should adopt a pragmatic and realistic approach while issuing process. In cases of juristic entities, except in cases where the Director/Partner etc is a signatory to the cheque, in respect of other accused who are sought to be roped in with the aid of Section 141 of the N.I Act, 1881, the Magistrate shall not issue process unless he is satisfied about the complicity of such accused having regard to the express averments in the complaint as to how and in what manner such person/accused is involved in the day to day affairs/Management of the company,” the court said.

Apart from the above, the court also issued directions regarding the summons, interim compensation, appearance of accused, and trial in cases under the Act.

Counsel for the Petitioners: Mr. KA. Raamakrishnan

Counsel for the Respondent: Mr. M. Jothibasu

Case Title: M/s. Ultimate Computer Care v. M/s. S. M. K. Systems

Citation: 2025 LiveLaw (Mad) 57

Case No: CRL.OP(MD). Nos.19778 of 2022