The Long Road To Justice: Practical Challenges In Section 138 NI Act Cases

By Shubhikapant996 Views: 18801

The cheque bounce matters under Section 138 of the Negotiable Instruments Act, 1881, I can confidently say that the law, though well-intentioned, has not lived up to its promise of being an efficient remedy for financial wrongs. What was designed as a deterrent to protect the integrity of commercial transactions has, in practice, become an exhausting ordeal for the aggrieved party.

The delays, procedural complexities, and abuse of legal process often dishearten clients who initially approach the system with the hope of quick redressal.

Legislative intent and ground realities
Section 138 was enacted to ensure that cheques - a key instrument in commercial dealings - retain their credibility and that dishonest conduct is penalized. It criminalizes the act of dishonour of a cheque issued towards a legally enforceable debt or liability. However, what is envisaged as a summary procedure often spirals into a drawn-out process due to structural inefficiencies.
Real-world hurdles for complainants
1. Chronic delays in proceedings
  One of the most common frustrations is the inordinate delay in the adjudication of complaints. Repeated adjournments, non-appearance of the accused, and the burdened court dockets lead to trials dragging on for several years. A process that should conclude within months often stretches to half a decade or more.
2. Emotional and financial toll
  In most cases, complainants are individuals or small businesses who issue credit or loans in good faith. When a cheque is dishonoured, it disrupts cash flow and affects business continuity. The subsequent legal battle is not only time-consuming but emotionally draining, especially when the accused takes advantage of the procedural loopholes.
3. Execution of judgments
  Even when the court convicts the drawer, securing the compensation under Section 357 of the CrPC becomes a separate battle altogether. Many convicted persons either delay payment or challenge the order, prolonging the suffering of the complainant further.
Judicial pronouncements reinforcing the complainant's rights
- Rangappa v. Sri Mohan (2010): Once the execution of a cheque is admitted, the statutory presumption under Section 139 comes into play. The burden is on the accused to rebut it, not on the complainant to prove the debt.
- K. Bhaskaran v. Sankaran Vaidhyan Balan (1999): The Court clarified that jurisdiction could lie at any of the five places involved in the transaction - including where the cheque was issued or dishonoured - providing flexibility to the complainant.
- Bir Singh v. Mukesh Kumar (2019): Even a blank but signed cheque, if voluntarily given, carries a presumption that it was issued against a legally enforceable debt.
- C.C. Alavi Haji v. Palapetty Muhammed (2007): Failure to reply to a statutory notice under Section 138 can be taken as an adverse inference against the accused.
- Laxmi Dyechem v. State of Gujarat (2012): Claiming that a cheque was issued as security is not sufficient to rebut the presumption of liability under Section 139.
- Sampelly Satyanarayana Rao v. IREDA (2016): Post-dated cheques issued for repayment of existing debts also attract the provisions of Section 138.
These decisions affirm the legal rights of the complainant, but the enforcement on the ground often remains inadequate due to procedural inefficiencies.
The need for urgent reforms
- Establishing dedicated fast-track courts for cheque dishonour cases.
- Mandating the use of digital summons and e-notices to reduce service-related delays.
- Encouraging pre-litigation mediation or Lok Adalat mechanisms to reduce caseload.
- Enforcing summary trials under Section 143 of the NI Act more stringently.
- Imposing costs for unnecessary delays or frivolous defenses to deter misuse of process.

Conclusion
Clients lose faith in the justice system due to the avoidable delays and hurdles in Section 138 cases. This law was meant to instill confidence in business transactions and provide a swift remedy against dishonoured cheques. However, the ground reality is that it often ends up punishing the complainant more than the drawer.

As legal professionals, it is our duty to not only assist clients through this arduous journey but also to advocate for procedural reforms. Until such reforms are undertaken earnestly, justice under Section 138 will remain a long and uncertain road, one that many cannot afford to travel.

Written By: Advocate Shubhika Pant