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'Pre-Litigation Mediation May Not Be Feasible': Supreme Court Asks NALSA To Consider Post-Cognizance Mediation Of Cheque Bounce Cases U/ S 138 NI Act

LIVELAW NEWS NETWORK
19 Jan 2021 7:17 AM GMT
Pre-Litigation Mediation May Not Be Feasible: Supreme Court Asks NALSA To Consider Post-Cognizance Mediation Of Cheque Bounce Cases U/ S 138 NI Act
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The Supreme Court on Tuesday observed that NALSA's recommendations on pre-litigation mediation for settlement of cheque bounce cases under Section 138 of the Negotiable Instruments Act, 1881 may not be feasible. Taking into account the issues relating to limitation in pre-litigation process, a Bench led by CJI SA Bobde directed the Authority to consider "post-cognizance mediation" in...

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

Taking into account the issues relating to limitation in pre-litigation process, a Bench led by CJI SA Bobde directed the Authority to consider "post-cognizance mediation" in such cases.

The direction was made in the suo moto case on expeditious trial of cheque dishonour cases under Section 138 of NI Act, to reduce high level of pendency relating to those cases.

Amicus curiae Sr Adv Siddharth Luthra submitted before the Bench that pre-litigation mediation under the draft scheme prepared by NALSA can take place only after cognizance, as the NI Act provides strict statutory time limits for issuing notice, reply etc.

Following his submissions, the CJI directed NALSA to address the concerns raised by the amici curiae regarding the impact of limitation period for steps under Section 138 NI Act on its suggestions regarding pre-litigation mediation.

The Bench ordered NALSA to take into account this fact and modify its recommendations accordingly.

Inter alia, the Court directed the Registrar General of all the High Courts and the concerned Director General of Police in all the States/ UTs to file their responses to the preliminary report submitted by Amici Curiae with suggestions for expeditious trial of cheque bounce cases under Section 138 of the Negotiable Instruments Act, 1881.

It further said that in case the above officers fail to file their replies within four weeks, they shall remain present before the Court on the 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 and States/UTs through their DGPs shall submit the response to this court within four weeks. In case, the High Courts and States/UTs do not 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," the CJI ordered.

In October last year, the Court had sought the responses of the High Courts to the recommendations made by the amicus curiae Sr Adv Siddharth Luthra and Adv K Parameshwar and also to the draft scheme of NALSA.

During the course of hearing today, it noted that out of 25 High Courts, only 14 High Courts have responded to the preliminary report and only 11 High Courts have responded to the NALSA draft scheme.

Further, only 7 State Governments have responded to the recommendations in report regarding service of summons.

Sr Adv Siddharth Luthra informed the Court that from March 2020, several opportunities were given to the concerned authorities to respond, but in vain. He urged that a peremptory order may be passed that if there is no response within a time, matter will be heard.

The CJI however said that he will ask the Registrar Generals of High Courts and DGPs to remain present here if there is no response.


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