Embracing Technology and Legal Reform to Address Pendency in Section 138 NI Act Cases

The Supreme Court of India, in the case of M/S New Win Export & Anr. vs. A. Subramaniam [1] (2024 INSC 535), overturned prior convictions under Section 138 of the Negotiable Instruments Act for issuing a dishonoured cheque. This decision followed a settlement between the parties. The Court highlighted the importance of compounding offences under the NI Act, noting that the Act prioritizes compensatory over punitive measures. The Supreme Court also observed that compounding offences can significantly reduce case pendency, especially for Section 138 cases.

Currently, around 9% of all criminal pending cases are under the NI Act, totaling ~34 lakh cases. The main reasons for this high pendency are delays in serving the process (getting the accused to appear) and trial delays caused by repeated adjournments.

However, judgments alone cannot solve the pendency issue. A comprehensive approach, combining legal reform, technology, and process reforms is essential. Below are some measures that could significantly reduce pendency:

1. Leveraging Technology for Process Service: Obtaining court permission to use existing databases for address discovery and ensuring timely service through multiple channels such as post, police, email, SMS, and other digital channels can expedite the initial stages of proceedings;

2. Remote Participation in Proceedings: Enabling remote participation of litigants and lawyers through VC can reduce the costs associated with seeking justice and make the process more accessible to all parties involved;

3. Asynchronous Court Participation: Utilizing technology for the async submission of applications, documents, and other necessary paperwork can reduce unnecessary delays due to adjournments;

4. Effective Case Scheduling: Implementing consent-based, algorithm-enabled scheduling will optimize the scheduling of hearing dates. Additionally, imposing financial penalties on parties who deliberately delay proceedings will uphold the integrity of the schedule.

5. Accountability and Communication: Holding judges and lawyers accountable through seamless communication & automated case status updates/notifications at every stage of proceedings enhances transparency. Visually intuitive dashboards tracking case progress further support this effort. This accountability helps prevent unnecessary delays by system actors.

Of course, decriminalizing Section 138 NI Act offences would significantly reduce the backlog of cases. With electronic financial instruments widely accessible, this change wouldn’t also compromise financial transaction's integrity. Until such reforms are enacted, the above measures can effectively reduce pendency in Section 138 cases and other legal proceedings.

[1]https://webapi.sci.gov.in/supremecourt/2024/6463/6463_2024_16_43_53580_Judgement_11-Jul-2024.pdf