Section 258 of the CrPC non-viable to the proceedings under Section 138 of the NI Act

Section 258 of the CrPC non-viable to the proceedings under Section 138 of the NI Act

Section 258 of the Code of Criminal Procedure empowers Magistrates to stop the proceedings, which now will no longer apply to the cases of cheque bounce under Section 138 of the Negotiable Instruments Act, 1881, as held by the Supreme Court. An order passed to this effect by the Constitution Bench comprising CJI SA Bobde and Justices L Nageswara Rao, BR Gavai, AS Bopanna, and Ravindra Bhat. It asked to dispose of the cheque bouncing matters under Section 138 of the NI Act.

With this, the court issued the following directions: 

  1. Magistrates are to be issued with practice directions by the High Courts concerning the conversion of summary trial to summons trial. 
  2. Before issuing summons to the accused, considering the party’s territorial jurisdiction, the Magistrate bound to hold an enquiry for the same. 
  3. Suitable amendments to be conducted in the NI Act that would allow a single trial to a person accused of more than one offence. 
  4. Directions given to the High Courts for issuing practice directions to the magistrates concerning the service of summons.
  5. Trial Courts do not possess inherent power to study or recall summons.

Further, the Constitution Bench constituted a committee last month, led by the former Bombay High Court Judge, Justice RC Chavan, to ensure speedy disposal of matters regarding a cheque bounce. The court ordered for the following members at the Committee:

  • An official from the Dept of Financial Services equivalent to the rank of Additional Secretary.
  • An officer from the Justice Dept.
  • A Public servant from the Dept of Copt affairs
  • An executive from the Expenditure Dept
  • A member from the Home Affairs
  • A member nominated by the RBI Governor
  • An associate proposed by the Chairman of IBA
  • A member of NALSA appointed to work as a Secretary of the Committee. 

Lastly, CJI SA Bobde, during a previous hearing, introduced a non-permanent law that could create additional courts to hear any cheque bounce matters.