Circular NO.C.2619/2018


I recently came across the following news regarding the circular sent by the high court to the subordinate court's, which is as follows
Cost of up to Rs 10,000, apart from interest at a rate between 6 and 9 percent will have to be paid by any person of company for cheques being dishonoured. This new circular has been sent to all subordinate courts by high courts as per direction from the Supreme Court.

The circular states that the complainant will have to fill up a prescribed form for this matter and the cost amounts are also tabulated. This is as per section 138 of the Negotiable Instruments Act 1881.

The circular says that the court shall issue summons in which the court will have to specifically mention the amount to be deposited by the accused (one whose cheque has been dishonoured for insufficiency, etc.), which shall include “the principal amount of the cheque, the amount of interest calculated at the rate between 6% to 9% per annum considering the facts and circumstances of the case, and also the cost…”

I wanted to know what are the indications of this circular. And also whether this circular can impact the proceedings of court under Section 138. If yes how will be the impact. To my understanding according to the circular the accused will prefer an out of court settlement rather than having to deposit the same amount in the court. I am also no sure whether I correctly interpreted this circular. Can any of you please clarify my doubts.
 
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Advocate

Paste the contents of the circular.  Only after going through it will be possible to comment.


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In view of the directions given by the Supreme Court in case of Meters and Instruments Private Limited and Another Vs. Kanchan Mehta [(2018) 1 scc 560) and In exercise of the powers conferred under Article 227 of the Constitution of India, the High Court issues following directions for regulating the practice and proceedings of the subordinate Courts.

1*In the criminal cases filed under Section 138 of Negotiable Instruments Act, the complainant shall fill up the presentation form as prescribed hereby

2*The Court shall issue summons in the cases under section 138 of Negotiable Instruments Act in the form as prescribed hereby

3*In the summons, to te issued for the offence under Section 138 of N.i. Act, the Court shall specificaly mention the amount to be deposited by the accused, which shall Include the principal amount of cheque, the amount of interest calculated at the rate between 6 % to 9 % per annum considering the facts and circumstances of the case, and also the cost as follows
(1) cost of Rs.500 - if the Cheque amount is less than Rs.25,000/
(2) cost of Rs.1,000/- if the Cheque amount s between Rs.25,000/-o to 50,000
(3) cost of Rs.2,000/- if the Cheque amount is between Rs.50,000/-to 1,00,000
(4) cost of Rs.5,000/- if the Cheque amount is between Rs.1,00,000/- to 10,00,000
(5) cost of Rs.10,000po0- if the Cheque amount is more than Rs.10,00,000/

4*In other Criminal Cases Appeals, the cause-title of every complaint/appeal shall contain the correct particulars of the names, addresses, phone numbers and E-mall ID (if any) of each of the complainants/appellants as the case may be, and shall also contain correct names and addresses of each of the accused/ respondents, and shall also contain Email ID and ) phone number's (of available) of the accused.
 
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Advocate

Please indicate which High Court issued the order and at what link the circular can be accessed.

The Supreme Court decision in Meters and Instruments Private Limited and Another Vs. Kanchan Mehta [(2018) 1 scc 560) has its own limitations.

 
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http://www.indialegallive.com/top-news-of-the-day/breaking-news-articles/penalty-of-up-to-rs-10000-for-dishonour-of-cheques-49202
 
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Advocate

Dear Mr. Arun, Please appreciate the circumstances in which the decision in Meters and Instruments Private Limited and Another Vs. Kanchan Mehta [(2018) 1 scc 560) was given. 

In the said case, when the matter came up before the Supreme Court, notice was issued to consider the question as to how proceedings for an offence under Sec. 138 of the N.I. Act can be regulared WHERE THE ACCUSED IS WILLING TO DEPOSIT THE CHEQUE AMOUNT.  Whether in such a case, the proceedings can be closed or exemption granted from personal appearance or any other order can be passed.

After completely examining the matter, ultimately the Hon'ble Supreme Court has said as under:

"20. In every complaint under Section 138 of the Act, it may be desirable that the complainant gives his bank account number and if possible e-mail ID of the accused. If e-mail ID is available with the bank where the accused has an account, such bank, on being required, should furnish such e-mail ID to the payee of the cheque. In every summons issued to the accused, it may be indicated that if the accused deposits the specified amount, which should be assessed by the court having regard to the cheque amount and interest/cost, by a specified date, the accused need not appear unless required and proceedings may be closed subject to any valid objection of the complainant. If the accused complies with such summons and informs the court and the complainant by e-mail, the court can ascertain the objection, if any, of the complainant and close the proceedings unless it becomes necessary to proceed with the case. In such a situation, the accused's presence can be required, unless the presence is otherwise exempted subject to such conditions as may be considered appropriate. The accused, who wants to contest the case, must be required to disclose specific defence for such contest. It is open to the court to ask specific questions to the accused at that stage. In case the trial is to proceed, it will be open to the court to explore the possibility of settlement. It will also be open to the court to consider the provisions of plea bargaining. Subject to this, the trial can be on day-to-day basis and endeavour must be to conclude it within six months. The guilty must be punished at the earliest as per law and the one who obeys the law need not be held up in proceedings for long unnecessarily."

The Supreme Court also said"

"21. It will be open to the High Courts to consider and lay down category of cases where proceedings or part thereof can be conducted online by designated courts or otherwise. The High Courts may also consider issuing any further updated directions for dealing with Section 138 cases in the light of judgments of this Court. "

So it is against this backdrop, the said Circular mentioned by you might have been issued.  But the paragraph 3 in the Circular will apply only to those accuseds who are willing to deposit the cheque amount and get the case closed.  That paragraph will not apply in case the Accused wants to contest the case.

 

 
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Thanks a lot for clarifying sir. I just went with the circular now I got the whole picture. Now again it's going to be a long and tedious process coming to the settlement
 
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Dear Arun, the most concerning portion of the above-extracted circular is that the Summons shall contain the amount with interest and cost which the accused shall deposit in the Court. This must be read in contect of the Supreme Court's jusgment in M/s Meters case which is the very foundation of the circular. When read in context it is clear that accused has option of depositing the amount if he is interested in exemption from appearence. 

Relevenat portion of M/s Metres Judgment:

"In every summons, issued to the accused, it may be indicated that if the accused deposits the specified amount, which should be assessed by the Court having regard to the cheque amount and interest/cost, by a specified date, the accused need not appear unless required and proceedings may be closed subject to any valid objection of the complainant"

I agree that the circular may cause confusion and must be made unambigous. 

 
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