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Settling cheque bounce cases in Lok Adalats not a wise step
A ministerial group has recommended settlement of criminal cases related to cheque-bouncing cases to be decided only through arbitration, conciliation and or settlement by Lok Adalats. But such a change could lead to huge cheque bouncing as people would start issuing cheques like ordinary paper for getting credit.

Changes in procedure for handling cheque-bouncing cases were necessary. Out of total 7.67 lakh pending criminal cases in Delhi, 5.15 lakh cases related to cheque-bouncing with 4.28 lakh cases filed by financial institutions mainly related to EMI-installments.

It is not proper that courts may serve as recovery agents for these financial institutions where cheque bouncing is normal part of their business. Separate courts should be for cases relating to banks and other financial institutions towards EMI-cheques with court fee of say ten per cent levied on such cases filed by financial institutions.

The system will largely ease out pressure on courts for fast disposal of other cases filed by individuals and firms under section 138 of Negotiable Instrument Act.

Fifty-percent amount of penalty imposable under section 138 of Negotiable Instrument Act should be for judicial system, and this amount may be compulsorily charged from the accused once the case is filed, even if the cases are compromised during or outside court proceedings.

Accused may be required to furnish a bank guarantee of the amount of bounced cheques at first appearance, or may deposit the amount in the court till final disposal of the case. Otherwise, bank-accounts and properties of defaulters may be attached till final disposal of the case and as directed by courts.

This will create required fear psychosis to make most defaulters settle the matters just after receiving the mandatory legal notice required before filing the complaint under section 138 of Negotiable Instrument Act.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of In case you have a opposing view, please click here to share the same in the comments section.
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