law commission report no. 213- fast track magisterial courts for dishonoured cheque cases

8/18/2019 Law Commission Report No. 213- Fast Track Magisterial Courts for Dishonoured Cheque Cases

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GOVERNMENT OF INDIA

LAW

COMMISSION

OF

INDIA

Fast Track Magisterial Courts for

Dishooure! Che"ue Cases

Re#ort No$ %&'

NOVEM(ER %))*

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LAW COMMISSION OF INDIA

+RE,ORT NO$ %&'-

Fast Track Magisterial Courts for

Dishooure! Che"ue Cases

For.ar!e! to Dr$ /$ R$ (har!.a01 2io Miister

for La. a! 3ustice1 Miistr4 of La. a! 3ustice1

Go5er6et of I!ia 74 Dr$ 3ustice AR$

Laksh6aa1 Chair6a1 La. Co66issio of I!ia1

o the %8th !a4 of No5e67er1 %))*$

2

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The &*th La. Co66issio .as costitute! for a

#erio! of three 4ears fro6 &st Se#te67er1 %))9 74

Or!er No$ A$8:)&%;&;%))9


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The La. Co66issio is locate! i ILI (uil!ig1

%! Floor1 (hag.a Das Roa!1

Ne. Delhi$ 2#a!h4a4 ? De#ut4 La. Officer

Dr$ V$ >$ Sigh ? Assistat Legal A!5iser

A!6iistrati5e Staff

Shri Sushil >u6ar ? 3oit Secretar4 @ La. Officer

Shri D$ Chou!hur4 ? 2!er Secretar4

Shri S$ >$ (asu ? Sectio Officer

S6t$ Ra0i Shar6a ? Assistat Li7rar4 @

Ifor6atio Officer

4

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The tet of this Re#ort is a5aila7le o the Iteret at

htt#?;;...$la.co66issioofi!ia$ic$i

B Go5er6et of I!ia

La. Co66issio of I!ia

The tet i this !ocu6et +eclu!ig the

Go5er6et Logo- 6a4 7e re#ro!uce! free of

charge i a4 for6at or 6e!iu6 #ro5i!e! that it is

re#ro!uce! accuratel4 a! ot use! i a 6islea!ig

cotet$ The 6aterial 6ust 7e acko.le!ge! as the

Go5er6et of I!ia co#4right a! the title of the

!ocu6et s#ecifie!$

A4 e"uiries relatig to this Re#ort shoul! 7e

a!!resse! to the Me67er

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http://www.lawcommissionofindia.nic.in/mailto:[email protected]://www.lawcommissionofindia.nic.in/mailto:[email protected]


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Dr. Justice AR. Lakshmanan ILI Building (IInd Floor!(Former Judge! "u#reme $ourt o% India Bhag&andas Road!

$hairman! La& $ommission o% India 'e& Delhi))* **) +el., -)))23344/5

Fa0, -)))2333514

D 'o. 1(3)452**L$(L" 'oemer 24! 2**

Dear Dr. Bhard&a6 6i!

"u6ect, Fast Track Magisterial Courts for Dishooure! Che"ue Cases

I am %or&arding here&ith the 2)3th Re#ort o% the La&

$ommission o% India on the aoe su6ect.

"ection )3 o% the 'egotiale Instruments Act! )) (7Act8

deals &ith the o%%ence #ertaining to dishonour o% che9ue %or

insu%%icienc:! etc.! o% %unds in the dra&er;s account on &hich the

che9ue is dra&n %or the discharge o% an: legall: en%orceale det or

other liailit:. +he Banking!


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the countr: is su%%ering a serious setack. Dishonour o% che9ue : a

Bank causes incalculale loss! in6ur: and inconenience to the #a:ee

and the crediilit: o% issuance o% che9ue is also eing eroded to a

large e0tent. +he er: #ur#ose o% the aoe amendments made in the

Act %or s#eed: dis#osal o% dishonoured che9ue cases is eing lost.

+he La& $ommission undertook this su6ect suo motu in ie&

o% the aoe circumstances and in #ursuance o% one o% its terms o%

re%erence 7to suggest suitale measures %or 9uick redressal o% citi@ens

grieances! in the %ield o% la&8. +he $ommission e0amined the

su6ect thoroughl: along &ith the right to s#eed: trial. +he stud:

indicates that there is an urgent need to ensure restoration o% the

crediilit: o% the instrumenttradeusinesscommerce and! o% course!

%undamental right to s#eed: trial! to ensure that genuine and honest

citi@enscommercial communit: is not harassed or #ut toinconenience. ence! &e recommend setting u# o% Fast +rack $ourts

at ?agisterial leel to deal &ith the huge #endenc: o% dishonoured

che9ue cases.

e ho#e that the recommendations made in this re#ort &ill

sere the #ur#ose and o6ect o% section )3 o% the Act.

ith &arm regards!

Cours sincerel:!

(AR. Lakshmanan

Dr. .R. Bhard&a6!

nion ?inister %or La& and Justice!

Eoernment o% India!

"hastri Bha&an!Ne. Delhi


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LAW COMMISSION OF INDIA

FAST TRAC> MAGISTERIAL CO2RTS FOR

DIS/ONO2RED C/E2E CASES

TA(LE OF CONTENTS

). I'+RD$+I' -

2. (a "$+I' )3 F + 'E+IABL )2

I'"+R?'+" A$+ ))

( ALLID I"I'" )1

(i ?D F +RIAL, "??ARC


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).) +he la& relating to negotiale instruments is not the la& o% one

countr: or o% one nationH it is the la& o% the commercial &orld in general!

%or! it consists o% 7certain #rinci#les o% e9uit: and usages o% trade &hich

general conenience and common sense o% 6ustice had estalished to

regulate the dealings o% merchants and mariners in all the commercial

countries o% the ciili@ed &orld8. en no& the la&s o% seeral countries in

uro#e are! at least so %ar as general #rinci#les are concerned! similar in

man: res#ects. % course! on 9uestions o% detail! di%%erent countries hae

soled the arious #rolems in di%%erent &a:s! ut the essentials are the

same! and this similarit: o% la& is a #rere9uisite %or the ast international

transactions that are carried on among the di%%erent countries.)

).2 A che9ue is an ackno&ledged ill o% e0change that is readil: acce#ted

in lieu o% #a:ment o% mone: and it is negotiale. o&eer! : the %all in

moral standards! een these negotiale instruments like che9ues issued!

started losing their creditailit: : not eing honoured on #resentment. It

&as %ound that an action in the ciil court %or collection o% the #roceeds o% a

negotiale instrument like a che9ue tarried! thus de%eating the er: #ur#ose

o% recogni@ing a negotiale instrument as a s#eed: ehicle o% commerce. It

&as in that conte0t that $ha#ter =>II &as inserted in the 'egotiale

Instruments Act.2

) Bhash:am Adiga;s The Negotiable Instruments Act ! re. Justice Ranganath ?isra!

Bharat La& ouse! 'e& Delhi! )th edn. (2**! #.).2 Iid. at /34.

-

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).3 er the :ears there hae een man: im#ortant changes in the &a:

che9ues are issuedounceddealt &ith. $ommercial gloali@ation has

resulted in giing ig oost to our countr:. ith the ra#id increase in

commerce and trade use o% che9ue also increased and so the che9ue

ouncing dis#utes.

).4 Inclusion o% additional %orms o% crime! %or e0am#le! section )3 cases

under the 'egotiale Instruments Act or section 4-A cases under the Indian


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cases in Ahmedaad! %ollo&ed : "urat! >adodara and Ra6kot.1 /3!***

cases &ere %iled under section )3 o% the 'egotiale Instruments Act

(che9ue ouncing on a single da: : a #riate telecom com#an: e%ore a

Bangalore court! in%ormed the $hie% Justice o% India! G. E. Balakrishnan!

urging the Eoernment to a##oint more 6udges to deal &ith ). crore

#ending cases in the countr:./ +he numer o% com#laints &hich are #ending

in Boma: $ourts seriousl: cast shado& on the crediilit: o% our trade!

commerce and usiness. Immediate ste#s hae to e taken : all concerned

to ensure restoration o% the crediilit: o% trade! commerce and usiness.

).1 >er: recentl:! &hile allo&ing the a##eal o% an accused in a che9ue

ouncing case! the "u#reme $ourt has ruled that s#eed: trial is a

%undamental right o% an accused.-

)./ +he #ur#ose o% this Re#ort is to recommend setting u# o% Fast +rack

$ourts at ?agisterial leel &ith hightech %acilities. uge acklog o% che9ue

ouncing or dishonoured che9ue cases need to e s#eedil: dis#osed o%

through this measure! lest the litigants lose %aith in the 6udicial s:stem.

nless there is su%%icient numer o% courts %or resoling che9ue ouncing

dis#utes s#eedil: and e%%icientl:! the #rolem &ill continue to e alarming.

$ommercial circles in India and aroad must e assured a %ast and e%%icient

6udicial s:stem in India.

1 htt#,&&&.indiane0#ress.com! isited 21.*-.2**./ htt#,&&&.deccanherald.com and htt#,&&&.aol.in! isited 2-.*-.2**. KSL & Industries Ltd. v. Mannalal Khandelwal 2**5 $ri.L.J. )2*) (Bom.! )2*4.- S. Rama Krishna v. S. Rami Reddy AIR 2** "$ 2*11.

))

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http://www.deccanherald.com/http://www.aol.in/http://www.deccanherald.com/http://www.aol.in/


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%$ +a- SECTION &'* OF T/E NEGOTIA(LE INSTR2MENTS ACT

&**&

2.) In India! there is reason to eliee that instruments o% e0change &ere

in use %rom earl: times and &e %ind that #a#ers re#resenting mone: &ere

introduced into the countr: : one o% the ?uhammadan soereigns o% Delhi

in the earl: #art o% the %ourteenth centur:! the idea haing een orro&ed

%rom $hinaH and it is the acce#ted theor: o% the &estern saants! that in

$hina a com#lete s:stem o% #a#ercurrenc: and anking had een deelo#ed

as earl: as the tenth centur: and it is not im#roale that such an idea

%iltered into India sometime later.)*

2.2 Be%ore the #assing o% the Act! the la& o% negotiale instruments as

#realent in ngland &as a##lied : the courts in India &hen an: 9uestion

relating to such instruments arose et&een uro#eans.))

2.3 +hough the 'egotiale Instruments Act had een #assed into la& in

))! $ha#ter =>II com#rising sections )3 to )42 &as inserted : the

Banking!


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shortcomings &hich hae een endeaoured to e #lugged : the 'egotiale

Instruments (Amendment ?iscellaneous


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(a the che9ue has een #resented to the ank &ithin a #eriod o% si0

months %rom the date on &hich it is dra&n or &ithin the #eriod o%

its alidit:! &hicheer is earlierH

( the #a:ee or the holder in due course o% the che9ue! as the case

ma: e! makes a demand %or the #a:ment o% the said amount o%

mone: : giing a notice! in &riting! to the dra&er o% the che9ue!

&ithin thirt: da:s o% the recei#t o% in%ormation : him %rom the

ank regarding the return o% the che9ue as un#aidH and

(c the dra&er o% such che9ue %ails to make the #a:ment o% the said

amount o% mone: to the #a:ee or! as the case ma: e! to the holder

in due course o% the che9ue! &ithin %i%teen da:s o% the recei#t o%

the said notice.

%lanation. For the #ur#oses o% this section! 7det or other

liailit:8 means a legall: en%orceale det or other liailit:.;

2.1 +o constitute an o%%ence under section )3 o% the 'egotiale

Instruments Act the %ollo&ing ingredients need to e %ul%illed,

(i $he9ue should hae een issued %or the discharge! in &hole or

#art! o% an: det or other liailit:H

(ii +he che9ue should hae een #resented &ithin the #eriod o% si0

months or &ithin the #eriod o% its alidit:! &hicheer is earlierH

Note, +he che9ue ma: e #resented an: numer o% times

%or collection &ithin its alidit:.

(iii +he #a:ee or the holder in due course should hae issued a

notice in &riting to the dra&er &ithin thirt: (%i%teen #rior to

)4

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2**2 amendments da:s o% the recei#t o% in%ormation : him

%rom the ank regarding the return o% the che9ue as un#aidH

(i A%ter the recei#t o% the said notice : the #a:ee or the holder in

due course! the dra&er should hae %ailed to #a: the che9ue

amount &ithin %i%teen da:s o% the recei#t o% the said noticeH

Note, 'otice o% dishonour is unnecessar: &hen the #art:

entitled to notice cannot a%ter due search e %ound (see section

-(d o% the Act.

( n non#a:ment o% the amount due to the dishonoured che9ue

&ithin %i%teen da:s o% the recei#t o% the notice : the dra&er!

the com#laint should hae een %iled &ithin one month %rom

the date o% e0#ir: o% the grace time o% %i%teen da:s! e%ore a?etro#olitan ?agistrate or a Judicial ?agistrate o% the %irst

class. +he cogni@ance o% a com#laint ma: e taken : the

$ourt a%ter the #rescried #eriod! i% the com#laint satis%ies the

$ourt that he had su%%icient cause %or not making a com#laint

&ithin such #eriod.

(i +he o%%ence under this Act is com#oundale (see section )4/ o%

the Act! inserted in 2**2.)2

2./ nder la&! &hen a #erson has tendered the amount #a:ale : him he

must e deemed to hae discharged his oligation and the creditor is ound

to acce#t the tender. here on dishonour o% che9ue issued : the accused!

he disclaimed the liailit: to #a: the che9ue ut on receiing notice tendered

#a:ment o% the &hole amount t&ice in %ront o% the court ut the com#lainant

re%used to acce#t it oth the times! the accused could not e said to e guilt:o% non#a:ment o% the amount.)3

)2 Sura note )! #. /43.)3 Iid.

)5

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2. +he "u#reme $ourt again s#elt out necessar: ingredients o% section

)3 in Kusum Ingots & Alloys Ltd. v. 'ennar 'eterson Securities Ltd.)4!

reiterated : the A#e0 $ourt in K. R. Indira v. "r. (. Adinarayana)5. hat

%ollo&s there%rom is that the last ingredient to com#lete an o%%ence under

section )3 o% the Act is %ailure o% the accused to make #a:ment &ithin )5

da:s a%ter serice o% notice. I% #a:ment is made &ithin the said #eriod! no

o%%ence is committed! ut in case o% %ailure! the o%%ence gets com#leted.

en i% the #a:ment is made on the )1th da: the same is not su%%icient to

come out o% the rigours o% section )3 o% the Act. In criminal la&!

commission o% o%%ence is one thing and #rosecution is 9uite another.

$ommission o% o%%ence is goerned : section )3 o% the Act.


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the nature o% the case is such that a sentence o% im#risonment %or a term

e0ceeding one :ear ma: hae to e #assed! he can do so a%ter hearing the

#arties and recalling an: &itness &ho ma: hae een e0amined. nder this

#roision! so %ar as #racticale! the ?agistrate is e0#ected to conduct the

trial on a da:toda: asis until its conclusion and conclude the trial &ithin

si0 months %rom the date o% %iling o% the com#laint.

2.)* $ha#ter ==I o% the $riminal


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com#ounding and settlement et&een the #arties! taking into consideration

the aim and o6ect o% the #roisions o% the Act. I% the matter in relation to

&hich the che9ue had een issued has een settled et&een the #arties! such

settlement e gien e%%ect to kee#ing in mind the o6ect o% introducing the

releant #roisions o% the ActH the court can note the same and record the

settlement et&een the #arties.)

+c- O(3ECT OF SECTION &'*

2.)3 +he o6ect o% ringing section )3 on the statute is to inculcate %aith

in the e%%icac: o% anking o#erations and crediilit: in transacting usiness

on negotiale instruments. It is to enhance the acce#tailit: o% che9ue in

settlement o% liailities : making the dra&er liale %or #enalties in case o%

ouncing o% che9ues due to insu%%icient arrangements made : the dra&er!

&ith ade9uate sa%eguards to #reent harassment o% honest dra&ers. I% the

che9ue is dishonoured %or insu%%icienc: o% %unds in the dra&er;s account or

i% it e0ceeds the amount arranged to e #aid %rom that account! the dra&er is

to e #unished &ith im#risonment %or a term &hich ma: e0tend to t&o :ears!

or &ith %ine &hich ma: e0tend to t&ice the amount o% the che9ue! or &ith

oth.

2.)4 In KSL & Industries Ltd. ). Mannalal Khandelwal )-! the Boma:

igh $ourt osered,

) %mloyees* State Insurance +ororation v. A. '. ,eavy Machinery and %ngg. Ltd.

2**5 $ri. L. J. )** (A.


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7"ection )3! in %act! has een introduced to #reent dishonest: on the

#art o% the dra&er o% negotiale instrument to dra& a che9ue &ithout

su%%icient %unds in the account maintained : him in ank and induce

the #a:ee or holderinduecourse to act u#on it. In other &ords! these

#roisions hae een introduced to gie greater crediilit: to our

trade! usiness! commerce and industr:! &hich is asolutel:

im#eratie in ie& o% the gro&ing international trade and usiness.

+he constitutional alidit: o% these #roisions has een u#held : the

"u#reme $ourt.8

2.)5 +he "tatement o% 6ects and Reasons a##ended to the Bill &hich

ecame the 'egotiale Instruments (Amendment and ?iscellaneous


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che9ues! enhancing #unishment %or o%%enders! introducing electronic

image o% a truncated che9ue and a che9ue in the electronic %orm as

&ell as e0em#ting an o%%icial nominee director %rom #rosecution

under the 'egotiale Instruments Act! )).8

2.)1 +he Boma: igh $ourt in KSL & Indutries Ltd.2* deemed it

a##ro#riate! in order to accom#lish the underl:ing o6ect o% the Act! to #ass

the %ollo&ing directions,

(a 0#erience reeals that enormous time is s#ent at the stage o%

summoningsering the accused. +he court must ado#t #ragmatic methods and must sere them : all #ossile means

o% serice! including emailM. +he $ourt must ensure that the

accused are not #ermitted to ause the s:stem.

( +he $ourt concerned must ensure that e0aminationinchie%!

crosse0amination and ree0amination o% the com#lainant must

e concluded &ithin three months o% assigning the caseM.

(c $om#laints must e dis#osed o% as e0#editiousl: as #ossile!

and in an: eent! &ithin si0 months %rom the date &hen the

#resence o% the accused has een securedM.2)

2.)/ In (oa 'last -' Ltd. v. +hico /rsula "*Sou0a22 $ the "u#reme $ourt!

&hile considering the o6ect and the ingredients o% sections )3 and )3- o%

the Act! osered as under,

7+he o6ect and the ingredients under the #roisions! in #articular!

sections )3 and )3- o% the Act cannot e ignored.


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smooth %unctioning o% all usiness transactions! #articularl:! o%

che9ues as instruments! #rimaril: de#ends u#on the integrit: and

honest: o% the #arties. In our countr:! in a large numer o%

commercial transactions! it &as noted that the che9ues &ere issued

een merel: as a deice not onl: to stall ut een to de%raud the

creditors. +he sanctit: and crediilit: o% issuance o% che9ues in

commercial transactions &as eroded to a large e0tent. ndoutedl:!

dishonour o% a che9ue : the ank causes incalculale loss! in6ur: and

inconenience to the #a:ee and the entire crediilit: o% the usiness

transactions &ithin and outside the countr: su%%ers a serious setack.

+he


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ne&s#a#er! /3!*** cases &ere %iled under section )3 o% the 'egotiale

Instruments Act e%ore a court in Bangalore. "uch large numer o% cases

&ould take long time %or their dis#osal under the #resent setu# o% the courts.

+hese dis#utes are not merel: criminal trials ut the: inole the interests o%

commercial circleseconom: o% the gloe.

2.)- In the age o% international trade and gloali@ation! it is een more

im#ortant that #eo#le must hae im#licit %aith in the crediilit: and honest:

o% the s:stem. n%ortunatel:! sanctit: and crediilit: o% che9ues in

commercial transactions hae een eroded to a large e0tent.24

2.2* "eeral central statutes including the 'egotiale Instruments Act hae

contriuted more than 5*N to 1*N o% the litigation in the trial courts. +hese

enactments are re%erale to List I or List III o% the "eenth "chedule o% the

$onstitution o% India. Article 24/ o% the $onstitution enales the nion

Eoernment to estalish additional courts %or etter administration o% la&s

made :


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a od: o% scienti%ic and rational lue#rints in terms o% institutional

organi@ation and #rocedural methods or in terms o% assessments o%

6udicial man#o&er re9uirements! ut to a s#ate o% alarm signals and

dire shioleths. I% there are more and more cases in courts! that is

ecause &e hae a #o#ulation e0#losion! &e hae a more com#le0 and

%riction#rone societ:! our dis#ute resolution and conciliation s:stem

are ere%t o% e%%icac:! &e hae increasingl: greater a&areness o%

rights! and #erha#s ecause &e hae more in6ustice and more

aritrariness in our midst. +he Eoernments are under an oligation

to #roide an ade9uate machiner: %or 6ustice! to a##oint more 6udges

and to gie them etter emoluments and %acilities! to uild more

courthouses! to enact etter la&s! to deise etter dis#ute resolution

#rocedures! and to administer more e%%ectiel: and e9uital:! rather

than to lame la&:ers and 6udges %or the increase and #roli%eration o%

litigation. $ourts in India cannot a##l: a mechanicalstatistical ra@or

lade or &ae a magic &and to &i#e out the enormous #endenc: o%

arrears. 'or can the courts a%%ord to turn a lind e:e or a dea% ear to

the rank in6ustices and incongruities o% administration merel: ecause

the: hae alread: too much on their hands. I% the courts egin to do

that s:stematicall:! the: might endanger the con%idence and

crediilit: the: hae come to en6o:.825

'$ EAS ACCESS TO 32STICE

25 2**4 ()* "$AL J22! J21 J2/.

23

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3.) on;le Dr. Justice AR. Lakshmanan! $hairman o% the La&

$ommission o% India! has er: eauti%ull: e0#lained the su6ect in his ook

>oice o% Justice;. "ome o% the releant #aragra#hs are re#roduced as under,

7+he $onstitution o% India guarantees to all its citi@ens right to li%e

and #ersonal liert:! right to e9ualit:! right to %reedom etc. A#art %rom

these #ulic rights! there are arious #riate rights arising %rom torts

and contracts and also the arious social &el%are legislations such as

$ontract Laour (Regulation and Aolition Act! )-/1! 9ual

Remuneration Act! ?inimum ages Act and so on. But these rights

are o% no aail i% an indiidual has no means to get them en%orced.

Rule o% la& enisages that all men are e9ual e%ore la&. All hae

e9ual rights ut un%ortunatel: all cannot en6o: the rights e9uall:. +he

en%orcement o% the rights has to e through the courts! ut 6udicial

#rocedure is er: com#le0! costl: and dilator: #utting the #oor

#ersons at a distance.

+he $onstitution o% India through Article )4 guarantees e9ualit:

e%ore la& and e9ual #rotection o% la&s. It %ollo&s %rom this that e9ual

o##ortunit: must also e a%%orded %or access to 6ustice. It is not

su%%icient that la& treats all #ersons e9uall:! irres#ectie o% the

#realent ine9ualities. But la& must %unction in such a &a: that all the

#eo#le hae access to 6ustice in s#ite o% the economic dis#arities. +he

&ords Oaccess to 6usticeO %ocus on t&o asic #ur#oses o% the legal

s:stem.

). the s:stem must e e9uall: accessile to all

2. it must lead to results that are indiiduall: and sociall: 6ust.

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+raditional conce#t o% Paccess to 6usticeP as understood : common

man is access to courts o% la&. For a common man! a court is the #lace

&here 6ustice is meted out. But the courts hae ecome inaccessile

due to arious arriers such as #oert:! social and #olitical

ack&ardness! illiterac: and ignorance etc.

+o get 6ustice through courts! one must go through the com#le0 and

costl: #rocedures o% litigation. ne has to ear the costs o% litigation

including court %ee! stam# duties etc. and also the la&:ers; %ees. A#art

%rom these! the litigant loses much more in %inancial terms such as

loss o% income arising %rom attending the court hearings. A #oor

litigant &ho is arel: ale to %eed himsel% &ill neer e ale to get

6ustice or otain redress %or a &rong done to him through courts.

Further! a large #art o% the #o#ulation in India is illiterate and lie in

a6ect #oert:. +here%ore! the: are totall: ignorant aout the court

#rocedures and &ill e terri%ied and con%used &hen %aced &ith the

6udicial machiner:. +hus most o% the citi@ens o% India are not in a

#osition to en%orce their rights! constitutional or legal! &hich in e%%ect

generates ine9ualit: contrar: to the guarantees o%


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M

+ime has come to think o% #roiding a %orum %or the #oor and need:

#eo#le &ho a##roached the la& courts to redress their grieance

s#eedil:. o&eer! the dela: in dis#osal o% cases in la& court! %or

&hateer reason it ma: e! has reall: de%eated the #ur#ose %or &hich

the #eo#le a##roach the courts %or their redressal. Justice dela:ed is

6ustice denied and at the same time 6ustice hurried is 6ustice uried.

"o! one has to %ind out a ia media et&een these t&o to render social

6ustice to the #oor and need: &ho &ant to seek their grieance

redressed through La& $ourts.

M

+he $onstitutional #romise o% securing to all its citi@ens 6ustice

social! economic and #olitical as #romised in the


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M.in%rastructure %or the Fast +rack $ourts is to e #roided : the

"tate Eoernment and the selection o% the Judges is to e made : the

igh $ourt. +he scheme includes construction o% ne& court rooms!

a##ointment o% ad hoc 6udges!


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the o%%enders are sentenced ut sentences im#osed! are not e0ecuted

ecause the conicts had alread: 6um#ed ail and the #olice has no

&ill and time to search them out.

M

It is not uncommon %or an: criminal case to drag on %or :ears. During

this time! the accused traels %rom the @one o% PanguishP to @one o%

Ps:m#ath:P. +he &itnesses are either &on oer : muscle or mone:

#o&er or the: ecome s:m#athetic to the accused. As a result! the:

turn hostile and #rosecution %ails. In some cases! the recollection

ecomes %ade or the &itnesses die. +hus! long dela: in courts causes

great hardshi# not onl: to the accused ut een to the ictim and the

"tate. +he accused! &ho is not let out on ail! ma: remain in 6ail %or

numer o% months or een :ears a&aiting conclusion o% the trial.

+hus! e%%ort is re9uired to e made to im#roe the management o% the

#rosecution in order to increase the certaint: o% coniction and

#unishment %or most serious o%%enders. It is e0#erienced that there isincreasing la0it: in the court &ork : the #olice #ersonnel!

em#o&ered to inestigate the case.

Judiciar: toda: is more desering o% #ulic con%idence than eer

e%ore. +he 6udiciar: has a s#ecial role to #la: in the task o% achieing

socioeconomic goals enshrined in the $onstitution &hile maintaining

their aloo%ness and inde#endenceH the Judges hae to e a&are o% the

social changes in the task o% achieing socioeconomic 6ustice %or the

#eo#le.

M

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+he Indian Judicial s:stem is constantl: e0#osed to ne& challenges!

ne& dimensions and ne& signals and has to surie in a &orld in

&hich #erha#s the onl: real certaint: is that the circumstances o%

tomorro& &ill not e the same as those o% toda:.

+he need o% the hour is to correct misconce#tion aout the Judiciar:

: making it more accessile and more e0#licit! : utili@ing the

resources aailale to im#roe the serice to the #ulic! : reducing

dela:s and making courts more e%%icient and less daunting.821

3.2 At the 'ational "eminar on Dela: in Administration o% $riminal

Justice ":stem; held at 'e& Delhi on )/ ?arch! 2**/! on;le ?r. Justice

G. E. Balakrishnan! $hie% Justice o% India! in his


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and aoid e0cessiel: long dela:s in trial o% criminal cases that could

result in grae miscarriage o% 6ustice. It is in the interest o% all

concerned that the guilt or innocence o% the accused is determined as

9uickl: as #ossile. But! un%ortunatel:! there are a large numer o%

cases #ending in arious courtsM. >arious %actors contriute to large

#endenc: o% criminal cases in the suordinate courts. "#eed: trial o%

criminal cases should e recogni@ed as an urgent need o% the #resent

6udicial s:stem in order to decide the %ate o% lakhs o% litigants. It &ill

hel# enhance the %aith o% general #ulic in the #resent 6udicial s:stem.

In order to hae a strong socioeconomic s:stem! it is im#ortant that

each and eer: state o% trial o% an accused should moe at reasonal:

%ast #aceM. "#eed: trial ensures that a societ: is %ree o% such

icesM. +he ne& s:stem o% #lea argaining incor#orated in the

$riminal


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onl: hel# him as the memor: o% the &itnesses is likel: to e lurred

: the #assage o% time. M

In the trial o% criminal cases a Judge should e a little more actie and

he can contriute to a great e0tent in #reenting the dela: in the

administration o% 6ustice. n man: occasions the "essions Judges

ad6ourn the cases %or long #eriod and the dela: is thus caused and

man: &itnesses &ho &ould hae su##orted the #rosecution case lose

interest in the case and o%ten %orget the ethical dut: cast on them.

In most o% the cases! the lame %or dela: in administration o% criminal

6ustice s:stem is #ut at the door o% the courts. $ourts are oer

congested &ith #ett: cases and man: legislations are eing enacted

&hich result in %iling o% large numer o% cases e%ore the courts.

Inclusion o% additional %orms o% crime! %or e0am#le! "ection )3 cases

under the 'egotiale Instruments Act or "ection 4-A in the Indian


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uilding &hich &as constructed %or the #ur#ose o% residence is eing

used to house courts. +here should e su%%icient sitting arrangement

%or the &itnesses or the clients. +here should e suitale uilding %or

the #ro#er %unctioning o% the courts. +he #rosecuting agenc: should

e gien su%%icient %acilities %or the court to conduct the cases. +he

accused and the &itnesses should hae resting rooms i% the trial has

ecome length:. All this could e #roided onl: i% there are courts

&ith modern %acilities. +he "tates should graduall: im#roe the

in%rastructure and there must e su%%icient udgetar: allocation in

each :ear. 'o& the courts are #roided onl: &ith udgetar: allocation

%or the #a:ment o% salaries o% sta%% memers o% the courts and %or da:

toda: e0#enses %or running the courts. +his situation could e

changed! i% su%%icient %unds are allocated eer: :ear %or starting ne&

courts and also to im#roe the conditions o% the e0isting courts. +he

starting o% Fast +rack $ourts hae hel#ed to a great e0tent in

dis#osing o% the #ending "essions cases and that! : itsel%! has #roed

that it is ecause o% lack o% large numer o% courts that the #endenc:

o% criminal cases is on the rise.82/

8$ RIG/T TO FAIR AND S,EED TRIAL

4.) A %air trial im#lies a s#eed: trial.2 hile the "i0th Amendment to the

" $onstitution e0#ressl: states that 7in all criminal #rosecutions! the

accused shall en6o: the right to a s#eed: and #ulic trial8! our $onstitution

does not e0#ressl: declare this as a %undamental right. +he right to a s#eed:

2/ Sura note 3.2 State o! Maharashtra v. +hamalal 'un2a2i Shah AIR )-) "$ )1/5.

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trial &as %irst recogni@ed in the %irst ,ussainara Khatoon case2-. In

Surinder Singh v. State o! 'an2ab3*! the "u#reme $ourt held that a s#eed:

trial is im#licit in the road s&ee# and content o% Article 2) o% the

$onstitution. In ,ussainara Khatoon case3)! the "u#reme $ourt directed

that all undertrial #risoners against &hom chargesheets had not een %iled

&ithin the limitation#eriod should e released. +he $ourt osered in the

second ,ussainara Khatoon case32 that the "tate can not aoid its

constitutional oligation to #roide %or a s#eed: trial : #leading %inancial

or administratie inailit:. Directions &ere issued %or taking #ositie action!

like setting u# ne& courts! #roiding more sta%% and e9ui#ment to courts!

a##ointment o% additional 6udges and other measures calculated to ensure

s#eed: trial.

4.2 "use9uentl:! the "u#reme $ourt has re#eatedl: em#hasi@ed the

im#ortance o% s#eed: trial in man: cases. State o! 3ihar v. /ma Shan4ar

Kotriwal 55H Kadra 'ahadiya v. State o! 3ihar 56H State o! Maharashtra v.

+hamalal 'un2a2i Shah57H S. (uin ). (rindlays 3an4 58 H Sheela 3arse v.

/nion o! India59 H Raghubir Singh v. State o! 3ihar 5:H Ra4esh Saena v.

State5;H Srinivas 'al v. /nion Territory o! Arunachal 'radesh6


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Andhra 'radesh v. '. ). 'avithran6=. In Abdul Rehman Antulay v. R.S.

Naya4 6>! the "u#reme $ourt summari@ed )) #rinci#les as guidelines

a##licale to a s#eed: trial. +hese guidelines are onl: illustratie and not

e0haustie. +he: are not intended to o#erate as hard and %ast rules or e

a##lied as a strait6acket %ormula. +his decision &as held to e correct in '.

Ramachandra Rao v. State o! Karnata4a65.

4.3 +he s#eed: trail is guaranteed under Article 2) o% the $onstitution o%

India. An: dela: in e0#editious dis#osal o% criminal trial in%ringes the right

to li%e and liert: guaranteed under Article 2) o% the $onstitution o% India.

+he deate on 6udicial arrears has thro&n u# numer o% ideas on ho& the

6udiciar: can set its o&n house in order. Alarmed : the inordinate dela: in

dis#osal o% the acklog o% cases! it has een decided to introduce Fast +rack

$ourts. +hus! Fast +rack $ourts are to tackle the cases o% undertrials %irst! as

the gra#h o% such #ersons in 6ail has gone high. It is high time to restore the

con%idence o% #eo#le in this countr: in 6udiciar: : #roiding s#eed:

6ustice.44

4.4 Fair trial oiousl: &ould mean a trial e%ore an im#artial 6udge! a

%air #rosecutor and atmos#here o% 6udicial calm. Fair trial means a trial in

&hich ias or #re6udice %or or against the accused! the &itnesses or the cause

&hich is eing tried is eliminated. Failure to accord %air hearing either to the

4) AIR )--* "$ )211.42 AIR )--2 "$ )/*).43 (2**2 4 "$$ 5/.44 Sura note 21! #. 245.

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accused or the #rosecution iolates een minimum standards o% due #rocess

o% la&.45

:$ FAST TRAC> CO2RTS

5.) +he leenth Finance $ommission recommended a scheme %or

creation o% )/34 Fast +rack $ourts in the countr: %or dis#osal o% long

#ending "essions and other cases. +he ?inistr: o% Finance! Eoernment o%

India sanctioned an amount o% Rs. 5*2.-* crores as 7s#ecial #rolem and u#

gradation grant8 %or 6udicial administration. +he scheme &as %or a #eriod o%

5 :ears. ut o% ).41 lakh cases trans%erred to them! )*.11 lakh cases &ere

dis#osed o% : these courts at the end o% the said scheme on 3).*3.2**5.

Gee#ing in ie& the #er%ormance o% Fast +rack $ourts and contriution

made : them to&ards clearing the acklog! the scheme has een e0tended

till 3).*3.2*)* &ith a #roision o% Rs. 5*- crores as )** #ercent central

assistance.41

5.2 In his address4/ at a Joint $on%erence o% $hie% ?inisters and $hie%

Justices! at >ig:an Bha&an! 'e& Delhi on *.*4.2**/! on;le ?r. Justice

G. E. Balakrishnan! $JI! e0#ressed the ie& that these courts hae een

9uite success%ul in reducing the arrears. ?ost o% the criminal cases in

suordinate courts are #ending at the leel o% ?agistrates. Gee#ing in ie&the #er%ormance o% Fast +rack $ourts o% "ession Judges! the Eoernment o%

45 ?ahira ,abibulla ,. Shei4h v. State o! (u2arat (2**4 4 "$$ )5 ( 3est 3a4ery case.41 Annual Re#ort 2**12**/! ?inistr: o% La& and Justice! Eoernment o% India! 'e&

Delhi! #.45.4/ (2**/ 4 "$$ J)3.

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India should %ormulate a similar scheme %or setting u# Fast +rack $ourts o%

?agistrates in each "tate! as recommended : the #reious $on%erence o%

$hie% ?inisters and $hie% Justices held on )).*3.2**1. "imilar ie&s &ere

e0#ressed : on;le ?r. Justice B. '. Agra&al! Judge! "u#reme $ourt o%

India! on *).*.2**/ at the Lecture "eries organi@ed : the "u#reme $ourt

Bar Association.4 Recentl: s#eaking at a %unction! the $hie% Justice o% India

suggested setting u# o% se#arate courts to deal &ith dishonour o% che9ue case

under section )3 o% the 'egotiale Instruments Act to im#roe li9uidit:.4-

5.3 In this era o% gloali@ation and ra#id technological deelo#ments!

&hich is a%%ecting almost all economies and #resenting ne& challenges and

o##ortunities! 6udiciar: cannot a%%ord to lag ehind and has to e %ull:

#re#ared to meet the challenges o% the age. It is heartening to note that use

o% in%ormation and communication technolog: in 6udiciar: is gro&ing

des#ite arious constraints. Da:toda: management o% courts at all leels

can e sim#li%ied and im#roed through use o% technolog: including

aailailit: o% casela& and meeting administratie re9uirements.

$ongestion in court com#le0 can also e sustantiall: reduced through

electronic dissemination o% in%ormation. +he o6ecties that can e achieed

through use o% technolog: include trans#arenc: o% in%ormation! streamlining

o% 6udicial administration and reduction o% cost.5*

5.4 Increase in the numer o% 6udicial o%%icers &ill hae to e

accom#anied : #ro#ortionate increase in the numer o% court rooms. +he

e0isting court uildings are grossl: inade9uate to meet een the e0isting

4 (2**/ 1 "$$ J).4- Sura note 4.5* Sura note 4/.

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re9uirements and their condition #articularl: in small to&ns and mo!!usils is

#athetic. A isit to one o% these courts &ould reeal the s#ace constraints

eing %aced : them! oercro&ding o% la&:ers and litigants! lack o% asic

amenities such as regular &ater and electric su##l: and the unh:gienic and

insanitar: conditions #reailing therein. +he 'ational $ommission to reie&

the &orking o% the $onstitution noted that 6udicial administration in the

countr: su%%ers %rom de%iciencies due to lack o% #ro#er #lanned and ade9uate

%inancial su##ort %or estalishing more courts and #roiding them &ith

ade9uate in%rastructure. It is! there%ore! necessar: to #hase out the old and

outdated court uildings! re#lace them : standardi@ed modern court

uildings cou#led &ith addition o% more court rooms to the e0isting

uildings and more court com#le0es.5)

5.5 Litigation through the courts is 6ust one &a: o% resoling the dis#utes.

Litigation as a method o% dis#ute resolution leads to a &inlose situation

leading to gro&th o% animosit: et&een the #arties! &hich is not congenial

%or a #eace%ul societ:. e should! there%ore! resort to alternatie dis#ute

resolution mechanisms such as negotiations! conciliation and mediation! in

&hich nood: is a loser and all the #arties %eel satis%ied at the end o% the da:.

+he main #rolem eing %aced in this regard is that there are not man:

trained mediators and conciliators. e need to im#art training in mediation

and conciliation not onl: to 6udicial o%%icers ut also to the la&:ers. +he:

&ill hae to deelo# e0#ertise to act as success%ul mediators and

conciliators. e also need to #roide ade9uate in%rastructure %or conciliation

and mediation centres : giing them ade9uate s#ace! man#o&er and other

5) Iid.

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%acilities. +he Eoernment eing the iggest litigant needs to e %ull:

inoled in the #rocess and its o%%icers need to take lead in this cause.52

9$ CONCL2SIONS AND RECOMMENDATIONS

1.) Issuing a che9ue &hich is dishonoured is crime in India. But &e

hardl: see an: #eo#le eing #unished %or ouncing o% che9ues.


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o% a litigant %or a s#eed: and %air trial! the Eoernment o% India should direct

the "tate authorities %or setting u# o% Fast +rack $ourts in the countr:! &hich

alone! in the o#inion o% the La& $ommission! &ill sole the #erennial

#rolem o% #endenc: o% cases! &hich are een summar: in nature.

1.5 +he La& $ommission is o% the ie& that the acklog o% che9ue

ouncing cases need to e s#eedil: dis#osed o% through this measure lest

litigants ma: lose %aith in the 6udicial s:stem. +he commercial circles should

hae con%idence that &e hae 9uite %aster 6udicial s:stem.

1.1 e! accordingl:! recommend as under,

(a Fast +rack $ourts o% ?agistrates should e created to dis#ose o% the

dishonoured che9ue cases under section )3 o% the 'egotiale

Instruments Act! ))H

( +he $entral Eoernment and "tate Eoernments must #roide

necessar: %unds to meet the e0#enditure inoled in the creation o%

Fast +rack $ourts! su##orting sta%% and other in%rastructure.

(Dr Justice AR. Lakshmanan

$hairman

(


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law commission report no. 213- fast track magisterial courts for dishonoured cheque cases

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