All this seems very nice and good on paper, but it has to be seen in practice why a cheque defaulter would not like to pay up to maximum 20% of principal amount, and delay the case till it reaches Supreme Court.
NEW DELHI: Delay in settling cheque bounce cases will now cost the defaulter dear, up to 20% of the cheque amount. The penalty for delayed settlement of the cheque amount, after conviction in the trial court, would rise steadily from 10% in district courts, 15% in high courts to a whopping 20% in the Supreme Court.
The SC on Monday took this radical step through a pioneering judgment which aims to curb the tendency among defaulters to sit over the amount tendered through a bounced cheque.
Saddled with 30 lakh cheque bounce cases, the SC accepted most of the suggestions offered by attorney general G E Vahanvati.
A Bench comprising Chief Justice K G Balakrishnan and Justices P Sathasivam and J M Panchal also laid down guidelines for early settlement in cheque dishonour cases under Section 138 of the Negotiable Instrument Act.
The judgment, authored by Chief Justice K G Balakrishnan, indicated that defaulters going for early settlement before the trial court would have to pay just the principal amount with applicable interest.
But if they approched the district court for settlement after being convicted by the trial court, they would have to pay 10% of the cheque amount to avoid going to jail. So if a chque amount is for Rs 1 lakh, then to compound the offence before the district court, the defaulter has to pay an additional Rs 10,000 to avoid going to jail.
Similarly, if the defaulter agrees for settlement and compounding of the offence at the HC stage, then he would have to pay 15% of the cheque amount. The amount so collected would be given to Legal Aid Authorities of the respective states which provide free legal assistance to poor litigants in various forums, the SC said.
This judgment will go a long way in reducing the pendency of over 30 lakh cheque bounce cases which have jammed the wheels of justice already slowed down by pendency of 2.7 crore cases. During the hearing of a Section 138 case between Damodar S Prabhu and Sayed Babalal, the Bench observed that there had been an enormous rush of cases after cheque bounce was made a penal offence in 1989, followed by the amendment in 2002 providing for summary trial for early resolution of the dispute.
The last line is the giveaway, there was enormous increase in cheque bounce cases AFTER it was made a penal offence in 1989. Normally, one would expect that a criminal penalty for an offence would deter people from committing that offence. It is clear that justice in India does not work the way it is supposed to be! There is a huge latent demand for justice, and it does not seem to be satisfied no matter how many new laws get created.
Sir,
ReplyDeleteyou wrote that "The judgment, authored by Chief Justice K G Balakrishnan, indicated that defaulters going for early settlement before the trial court would have to pay just the principal amount with applicable interest."
There is nothing nowhere that interest is payable under Negotiable instruement Act. If any judgment or coment in judgment is there please quote it or send me on jmpsurat@gmail.com