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

276                       [2022]
               SUPREME COURT     3 S.C.R. 276
                              REPORTS                         [2022] 3 S.C.R.


A     IN RE: EXPEDITIOUS TRIAL OF CASES UNDER SECTION 138
                         OF N.I. ACT 1881
                    (Suo Motu Writ (Criminal) No. 2 of 2020)
                                  MAY 19, 2022
                 [L. NAGESWARA RAO, B. R. GAVAI AND
B
                            S. RAVINDRA BHAT, JJ.]
             Negotiable Instruments Act, 1881 – s.138 – Supreme Court
      had issued various directions with respect to conduct of trials of
      complaints u/s.138 – Expert Committee was constituted to consider
      suggestions with respect to streamlining the procedure of arresting
C     the judicial docket, in regard to complaints and trials for offences
      under the NI Act – The Expert Committee suggested creation of de
      novo Special NI Courts by the Central Government to tackle the
      problem of docket explosion – The amici curiae however urged,
      that the suggestion of creation of special courts with the proposed
D     staffing pattern may not be feasible or practical, as it would not be
      possible to immediately establish denovo courts and recruit fresh
      candidates and support staff – It was urged by the amici curiae that
      the option of appointing retired judicial / administrative officers
      who have worked and discharged quasi-judicial functions as Special
      Judicial / Metropolitan Magistrates for a fixed pay be explored –
E     Amici curiae suggested a pilot study to test the scheme of employing
      retired judicial officers and retired court staff to operationalise the
      Special Courts under the NI Act in 5 judicial districts with the highest
      pendency in the 5 states with the highest pendency (namely,
      Maharashtra, Rajasthan, Gujarat, Delhi and Uttar Pradesh) –
F     Having considered the suggestions made by the amici, Supreme
      Court directed a pilot study to be conducted in the manner indicated
      – Guidelines covering the pilot study, under various headings,
      delineated.
            CRIMINAL ORIGINAL JURISDICTION : Suo Moto Writ
G     (Criminal) No.2 of 2020.
            (Under Article 32 of The Constitution of India)
            S.V. Raju, ASG, V. Krishnamurthy, Ms. Garima Prasad, Neeraj,
      AAGs, Sidharth Luthra, Sr. Adv (A.C), Thomas P. Joseph, S.C. Verma,
      Sr. Advs., K Parameshwar, (A.C) Ms. A Sregurupriya, Lakshaya Mehta,
H
                                        276
IN RE: EXPEDITIOUS TRIAL OF CASES UNDER SECTION 138                       277
                   OF N.I. ACT 1881

Rajat Mathur, Anmol Kheta, Dr. Joseph Aristotle S., Ms. Nupur Sharma,     A
Shobhit Dwivedi, Sanjeev Kumar Mahara, Ms. Uttara Babbar, Manan
Bansal, Siddhesh Kotwal, Ms. Ana Upadhyay, Ms. Manya Hasija, Ms.
Preeti Singh, Akash Singh, Nirnimesh Dube, V. N. Raghupathy, Md.
Apzal Ansari, Parikshit P. Angadi, Aravindh S., Ms. C. Rubavathi, Ms.
Christi Jain, Pai Amit, Arjun Garg, Abhimanyu Jhamba, Ms. Thonpinao
                                                                          B
Thangal, Samir Ali Khan, Pradeep Misra, Suraj Singh, Ms. Pragati
Neekhra, Ms. Taruna Ardhendumauli Prasad, Ramesh Babu M.R., Ms.
Manisha Singh, Ms. Tanya Chowdhary, Suhaan Mukerji, Nikhil Parikshith,
Vishal Prasad, Abhishek Manchanda, Sayandeep Pahari, Tanmay Sinha,
M/S. Plr Chambers And Co., Ms. Manisha Ambwani, Sibo Sankar
Mishra, Rajesh Kumar Nayak, Niranjan Sahu, Umakant Mishra, Hitesh         C
K. Sharma, S.K. Rajora, Akhileshwar Jha, S. Ashok Reddy, Naresh K.
Sharma, V. K. Biju, Ms. Ria Sachthey, Chetanya Singh, Ms. Rubina
Jawed, Ranjeet Bharti, Abhay Pratap Singh, Shaji George, Ms. Vijay
Lakshmi, Umang Tripathi, Shibashish Misra, Shubhranshu Padhi, Ashish
Yadav, Rakshit Jain, Vishal Banshal, Apoorv Kurup, Ms. Nidhi Mittal,
                                                                          D
Ms. Aparna Arun, Ojaswa Pathak, Gaurav Agrawal, Ms. Radhika
Gautam, Ms. G. Indira, Raj Bahadur Yadav, Abhimanyu Tewari, Ms.
Eliza Bar, Ms. K. Enatoli Sema, Amit Kumar Singh, Ms. Chubalemla
Chang, M. Yogesh Kanna, Piyush Beriwal, Ankit Raj, Vedansh Anand,
Dr. Monika Gusain, Ms. Ruchira Goel, Aviral Saxena, Vikas Gothwal,
Vishwa Pal Singh, P. V. Yogeswaran, B. V. Balaram Das, Abhishek           E
Atrey, Raghvendra Kumar, Anand Kumar Dubey, Narendra Kumar,
Sumeer Sodhi, Anvit Seemansh, Anupam Raina, Sunando Raha, Ms.
Aswathi M. K., Avneesh Arputham, M/S. Arputham Aruna And Co,
Manish Kumar, Harsh Choudhary, Ms. Jaspreet Gogia, Sairica Raju, S.
K. Singhania, Varun Chugh, Bhuvan Kapoor, Mehul Gupta, Gurmeet
                                                                          F
Singh Makker, Anshuman Singh, Ankit Bhatia, Harsh Paul Singh,
Yashvardhan, Apoorv Shukla, Smita Kant, Ms. Prabhleen Kaur, Mahfooz
Ahsan Nazki, Polanki Gowtham, Shaik Mohamad Haneef, T. Vijaya
Bhaskar Reddy, K. V. Girish Chowdary, Ms. Rajeswari Mukherjee,
Gopal Jha, Avijit Mani Tripathi, Upendra Mishra, T. K. Nayak, K. V.
Kharlyngdoh, Pukhrambam Ramesh Kumar, Karun Sharma, Mukesh                G
K. Giri, Sachin Patil, Rahul Chitnis, Aaditya A. Pande, Geo Joseph, Ms.
Shewtal Shepal, Risvi Muhammed, S. Udaya Kumar Sagar, Ms. Sweena
Nair, P. Mohith Rao, R. Nedumaran, Shuvodeep Roy, Anando Mukherjee,
Saurabh Trivedi, Vinay Garg, G. Prakash, M/S. Parekh & Co., Romy
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278               SUPREME COURT REPORTS                         [2022] 3 S.C.R.


A     Chacko, Sudesh Kumar, Prashant Shrikant Kenjale, Satish Pandey, Kunal
      Chatterji, Shree Pal Singh, Sharan Thakur, Mahesh Thakur, Siddharth
      Thakur, Bishwendra Singh, Ms. Vipasha Singh, Ajay Kanojia, Sanjai
      Kumar Pathak, Arvind Kumar Tripathi, Ms. Shashi Pathak, Malak Manish
      Bhatt, Himanshu Shekhar, Parth Shekhar, Sameer Parekh, Nishe Rajen
      Shonker, Ms. Anu K. Joy, Alim Anvar, Advs. for the appearing parties.
B
               By Courts Motion.
               Applicant-in-person.
               The Order of the Court was passed by

C              S. RAVINDRA BHAT, J.
            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 of
      complaints under Section 138 of the Negotiable Instruments Act.
D            2. This court by its subsequent order dated 31.03.2021 had required
      High Courts to file status reports indicating compliance with the directions
      contained in the judgment and as to whether rules were framed
      appropriately in line with the judgment. Similarly, the necessary
      amendments to the Police Manuals etc. had to be carried out. As on
      date, all High Courts except the Patna High Court have complied with
E
      the directions and proposed the amended Rules. In many states, amended
      rules have even been notified.
              3. On 16.04.2021, by the said judgment of the Larger Bench, an
      expert Committee was constituted to consider various suggestions with
      respect to streamlining the procedure of arresting the judicial docket, in
F
      regard to complaints and trials for offences under the Negotiable
      Instruments Act. The Expert Committee, by its report has suggested the
      creation of de novo Special NI Courts by the Central Government vide
      its powers under Article 247 to tackle the problem of docket explosion.
      The Expert Committee proposed a scheme with two grades of judges at
G     the trial court level and two at the appellate/revision stage. According to
      the Expert Committee’s calculations, the establishment of these special
      NI Courts would require recruitment of 1,826 special judicial officers
      and a total cost of Rs 126.59 crores.

      1
H         (2021) SCC Online SC 325
IN RE: EXPEDITIOUS TRIAL OF CASES UNDER SECTION 138                             279
         OF N.I. ACT 1881 [S. RAVINDRA BHAT, J.]

       4. The amici curiae urged, in the hearing that the suggestion of         A
creation of special courts with the proposed staffing pattern may not be
feasible or practical, as it would not be possible to immediately establish
de novo courts and recruit fresh candidates and support staff. It was
urged that the option of appointing retired judicial/administrative officers
who have worked and discharged quasi-judicial functions such as retired
                                                                                B
Tehsildars, Special executive Magistrates, Registrars of Tribunals and
statutory 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 under
the NI Act can be constituted under Section 18 of Cr.P.C, 1973 (along
with S.13, Cr.P.C). There is authority for this course of action – (ref.        C
Kadra Pahadiyav. Stateof Bihar,[(1997) 4 SCC 287]. Retired public
servants, such as tehsildars and magistrates can be considered for
appointment as Special Judicial/Metropolitan magistrates. Retired
government personnel and retired court staff could be appointed for
operationalising these courts.                                                  D
       6. The report of the Expert Committee disclosed that as on
08.11.2021, 26,07,166 complaints were pending at various stages before
the 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 pendency
of 7,37,124 cases in a period of just over 5 months. As per the data            E
available on 08.11.2021, NI Act cases contribute to 8.81% of the total
criminal cases pending in the courts. Further, 11.82% of the total criminal
cases that are stagnating due to appearance/service related issues are
NI Act cases.
       7. The amici curiae suggest a pilot study to test the scheme of          F
employing retired judicial officers and retired court staff to operationalise
the Special Courts under the NIAct. It wassuggested that this scheme
could be tested on a pilot basis in 5 judicial districts with the highest
pendency in the 5 states with the highest pendency (namely, Maharashtra,
Rajasthan, Gujarat, Delhi and Uttar Pradesh) and the viability of utilising
services of retired judicial officers can be examined based on the results      G
of the pilot study.
      8. This High Court has by its order dated 27.04.2022 directed the
High Courts in the states of Maharashtra, Rajasthan, Gujarat, Delhi and

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280              SUPREME COURT REPORTS                          [2022] 3 S.C.R.


A     Uttar Pradesh to respond to the suggestions of the amici curiae. Their
      responses are as under:
            a.     High Court of Bombay – The High Court has identified
                   Nagpur, Nashik, Thane, Pune and CMM, Mumbai as the 5
                   districts with highest pendency.
B           b.     High Court of Rajasthan – The High Court has identified
                   Jaipur Metro-I, Jaipur Metro-II, Jodhpur Metro, Udaipur
                   and Ajmer as the 5 districts with highest pendency.
            c.     High Court Allahabad – The High Court has identified
                   Lucknow, Agra, Kanpur, Gautambudh Nagar and Ghaziabad
C                  as the 5 districts with the highest pendency.
            d.     High Court of Gujarat – The High Court has given
                   concurrence for establishing one additional court to try cases
                   under S. 138 of the N.I. Act as per the pilot project.

D           e.     High Court of Delhi: Delhi already has 72 Special Courts
                   for cases under the NI Act.
             9. This Court had on 12.05.2022 indicated that the amici curiae
      may place a detailed proposal for the pilot study, which has since been
      filed.
E            10. Having considered the suggestions made by the amici the
      Court hereby directs that the pilot study shall be conducted in the manner
      hereafter indicated. The guidelines covering the pilot study shall be as
      under:
            •      Duration of Study: The pilot study shall be conducted for
F                  a duration of 1 year from 01.09.2022 to 31.08.2023.
            •      Number of Courts: The pilot study shall be conducted in
                   25 Special Courts in total. One Special Court shall be
                   established in each of the 5 judicial districts which have
                   been identified as having thehighest pendency by each of
G                  the five High Courts of the states (mentioned above) with
                   the highest pendency of NI Act cases.
            •      Presiding Officers and Staff: For operationalising the
                   Special Courts under this pilot study, retired judicial officers
                   and retired court staff, preferably those who have retired
H                  within the past 5 years, may be employed. The concerned
IN RE: EXPEDITIOUS TRIAL OF CASES UNDER SECTION 138                       281
         OF N.I. ACT 1881 [S. RAVINDRA BHAT, J.]

         High Court shall ensure that no vacancy arises, during this      A
         period.
    •    Timeline for Identification of Requirements: The
         infrastructural requirements, including information
         technology support for video conferencing facilities, should
         be identified and secured by July 2022. Similarly, the           B
         presiding officers, support staff and human resources
         required for operationalising these Special Courts and their
         contractual terms should be finalised by the end of July
         2022.
    •    Training: The identified judicial officers, who are to preside   C
         over the Special Courts, be imparted specialised training. A
         four-week training programme by the State Judicial
         Academies on topics of substantive, procedure and evidence
         law related to the offences under the NI Act shall be
         conducted for them. Further, a detailed ready reckoner with
         governing case law and practice directions may be prepared       D
         and circulated to assist them in the adjudicatory exercise.
    •    Pay and Service duration: The High Court concerned
         should ensure that the presiding officers and court staff for
         operationalising the Special Courts can be hired on
         contractual basis for one year for the duration of the pilot     E
         study. It is further proposed that they be paid a fixed
         honorarium in accordance with their standing prior to
         retirement.
    •    Type of Cases: The Special Courts shall adjudicate upon
         only those cases in which summons have been duly served          F
         and the accused has entered appearance through a lawyer
         or in person. The oldest pending cases in which service of
         summons is complete must be identified in a chronological
         manner (oldest first). It must be ensured that no case where
         service of summons is incomplete is sent to the Special          G
         Courts.
    •    Timeline for Identification of Cases: All such cases
         should be identified by July and a comprehensive list of
         these cases should be posted before the regular Magistrates
         expeditiously so that cases which can be settled are referred
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282       SUPREME COURT REPORTS                          [2022] 3 S.C.R.


A           to mediation immediately and are hence, not part of the
            cases to be sent to the Special Courts. The final
            comprehensive list of cases, where service is complete and
            the matters are not referred to mediation, must be identified
            by the end of July.
B     •     Advance List and Weekly List: An advance list of all
            matters to be taken up by the Special Courts should be
            circulated by the end of July to give adequate notice to all
            counsel that such matters shall be taken up on priority basis
            by the respective Special Courts. Further, weekly lists shall
            also be published notifying all the matters listed for final
C           disposal.
      •     Functioning of Courts: The working days and working
            hours of the Special Courts should be notified by the end of
            July along with the circulation of the Advance List.

D     •     Procedure: The Special Courts set up for the pilot study
            shall follow the same procedure with respect to trial as
            mandated by the Criminal Procedure Code, 1973. In order
            to ensure speedy disposal of cases, adjournments should
            not be routinely given, especially on the ground of lack of
            notice. Further examination of outstation witnesses may be
E           conducted online by following appropriate protocol so that
            the delay in trial due to commute of the witnesses is avoided.
      •     Mediation: A list or panel of mediators must be identified
            by the end of July and circulated to all the presiding officers
            of the Special Court. In the event that the accused indicates
F           willingness to settleatstageoftrialbeforethe Special Court,
            thepresidingofficermustreferthecase to time-bound, online
            mediation before one of the identified mediators to prevent
            further delays.
      •     Data Collection: A weekly statement of disposal shall be
G           sent to the Registrar General of the concerned High Courts
            who shall actively monitor the progress of the pilot study.
            Quarterly statements of disposal must be sent to the SC. A
            Facilitation Officer may be appointed for the Special Courts
            to assist in collection of the data, in curating the cause lists
            and in conducting weekly review meetings with Presiding
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IN RE: EXPEDITIOUS TRIAL OF CASES UNDER SECTION 138                               283
         OF N.I. ACT 1881 [S. RAVINDRA BHAT, J.]

              Officers to identify any additional bottlenecks or issues           A
              which need to be assessed for future planning purposes.
        11. The Secretary General of this Court shall ensure that a copy
of the present order is directly communicated to the Registrar Generals
of the said five High Courts, who shall place it before the Hon’ble Chief
Justice for immediate action. To report progress and compliance, each             B
of 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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