Constitution Bench / Trial Procedure Guidelines Decided April 16, 2021

Expeditious Trial of Cases Under Section 138 of N.I. Act 1881, In Re

Official Law Report Citations (2021) 16 SCC 116 | [2021] 4 S.C.R. 257 | 2021 INSC 257 | 2021 SCC OnLine SC 325

Bench Composition / Coram (5 Judges) S.A. Bobde, CJI, L. Nageswara Rao, B.R. Gavai, A.S. Bopanna & S. Ravindra Bhat, JJ.

Statutory Provisions & Mappings: Sections 138 & 143 Negotiable Instruments Act Section 202 CrPC / Section 225 BNSS 2023 (Inquiry on Affidavits) Section 258 CrPC / Section 281 BNSS 2023 (Inapplicable) Section 219 CrPC / Section 242 BNSS 2023 (Single Trial for Multiple Cheques) Bar on Inherent Review of Summons

Precedential Crux & Golden Rule:

In a historic 5-Judge Constitution Bench verdict, the Supreme Court laid down comprehensive pan-India practice directions for Section 138 trials: (1) Trial courts must record specific reasons before converting summary trials into summons trials; (2) Pre-summoning inquiry under Section 202 CrPC is mandatory for out-of-jurisdiction accused but can be conducted strictly on affidavits and documentary scrutiny without oral witnesses; (3) Magistrates have no inherent power to recall or review summons; (4) Section 258 CrPC does not apply to Section 138 complaints, expressly overruling contrary observations in Meters and Instruments; and (5) Service of summons in one complaint forms deemed service across connected complaints in the transaction.

Official Supreme Court Judgment Record Certified Copy (e-SCR)

Complete verbatim judicial transcript, bench coram, ratio decidendi, and official Supreme Court Reports citation [2021] 4 S.C.R. 257.

Download PDF

1. Institutional Context & Genesis of Suo Motu Cognizance

Alarmed by the catastrophic accumulation of over 35 lakh cheque dishonour cases pending before trial courts across India—constituting more than 30% of the entire criminal docket in subordinate courts—a Division Bench of the Supreme Court headed by CJI S.A. Bobde registered Suo Motu Writ Petition (Crl.) No. 2 of 2020 on March 5, 2020. The Court observed that despite legislative reforms in 2002 and 2018 introducing summary trial procedures and interim compensation, Section 138 cases were lingering for decades, crippling the credibility of banking instruments and judicial administration.

The Court appointed Senior Advocate Shri Sidharth Luthra and Advocate Shri K. Parameshwar as Amici Curiae, issuing comprehensive notices to the Union of India, the Reserve Bank of India, Indian Banks' Association, Director Generals of Police, and Registrar Generals of all High Courts. A high-level committee comprising representatives of the Reserve Bank of India, Ministry of Finance, Ministry of Law and Justice, and Indian Banks' Association submitted a detailed preliminary report identifying systemic bottlenecks, including service of summons, conversion of summary to summons trials, and mechanical applications for discharge.

Recognizing the urgent need for a binding constitutional resolution of recurring procedural dilemmas, the matter was referred to a 5-Judge Constitution Bench comprising CJI S.A. Bobde, L. Nageswara Rao, B.R. Gavai, A.S. Bopanna, and S. Ravindra Bhat, JJ., to lay down definitive, uniform procedural norms binding on all subordinate courts nationwide.

2. Substantive Questions of Law Framed by the Constitution Bench

The Constitution Bench framed and resolved the following pivotal legal questions:

Whether trial court Magistrates possess unfettered discretion to convert summary trials into summons trials under Section 143 of the NI Act, or whether recording of specific reasons is mandatory?
Whether the pre-summoning inquiry under Section 202 of the Code of Criminal Procedure (CrPC) is mandatory for an accused residing outside the territorial jurisdiction of the court, and whether such inquiry requires oral examination of witnesses or can be conducted on affidavits?
Whether trial court Magistrates possess inherent jurisdiction to review, recall, or drop proceedings against an accused after issuance of summons in a Section 138 complaint?
Whether Section 258 of the CrPC (power to stop proceedings in summons cases) can be invoked by a Magistrate to discharge an accused or terminate proceedings in a Section 138 NI Act prosecution?
Whether Section 219 CrPC bars the consolidation and single trial of more than three cheque bounce offences committed between the same parties within a 12-month period?

3. Authoritative Ratio Decidendi & Binding Constitutional Directions

1. Strict Reasons Mandatory for Converting Summary Trial to Summons Trial (Section 143 NI Act): The Constitution Bench held that Section 143 of the NI Act mandates summary trial for Section 138 offences as the statutory default. Trial courts cannot routinely or mechanically convert summary trials into summons trials. A Magistrate is legally bound to record specific reasons demonstrating why a sentence exceeding one year may have to be passed or why a summary trial is undesirable. High Courts were directed to issue practice directions enforcing this mandate strictly.

2. Mandatory Section 202 CrPC Inquiry on Affidavits: The Court affirmed that an inquiry under Section 202 of the CrPC is mandatory before issuing process against an accused who resides beyond the territorial jurisdiction of the magistrate. However, to prevent procedural paralysis, the Bench held that the examination of witnesses in a Section 202 inquiry can be conducted purely on affidavit under Section 145 NI Act. In suitable cases, the Magistrate may restrict the inquiry strictly to the scrutiny of documents without insisting on oral examination of the complainant or witnesses.

3. Absolute Bar on Inherent Review of Summons by Magistrates: Reaffirming the 3-Judge Bench precedents in Adalat Prasad v. Rooplal Jindal (2004) 7 SCC 338 and Subramanium Sethuraman v. State of Maharashtra (2004) 13 SCC 324, the Constitution Bench held that subordinate criminal courts have no inherent power to review, recall, or drop proceedings once summons has been issued under Section 204 CrPC. A Magistrate cannot entertain an application for discharge or recall of summons (except where Section 322 CrPC applies for lack of territorial jurisdiction).

4. Section 258 CrPC Inapplicable; Meters & Instruments Partially Overruled: The 5-Judge Bench authoritatively ruled that Section 258 CrPC (power to stop proceedings in summons cases instituted otherwise than upon complaint) is totally inapplicable to private criminal complaints filed under Section 138 of the NI Act. The Court held that the observations in Meters and Instruments Pvt. Ltd. v. Kanchan Mehta (2018) 1 SCC 560 conferring power on Magistrates to discharge an accused under Section 258 upon unilateral deposit of cheque amount do not lay down good law.

5. Consolidated Summons Service Across Connected Complaints: High Courts were directed to issue practice directions instructing trial courts to treat the service of summons in one complaint—forming part of a single transaction—as deemed service across all connected complaints filed by the same complainant against the same accused.

4. Institutional Observations & Legislative Recommendations

The Constitution Bench issued monumental systemic recommendations to preserve judicial efficiency and commercial certainty:

Legislative Reform for Multiple Cheques (Section 219 CrPC): The Bench recommended that Parliament amend the Negotiable Instruments Act to enable a single trial for multiple offences under Section 138 committed within a period of 12 months, thereby removing the ceiling of three offences under Section 219 CrPC and curbing multiplicity of proceedings.
Pre-Litigation Mediation & Digital Service: The Court underscored the imperative need to integrate institutional mediation mechanisms at the pre-complaint and post-notice stages, while directing banks and financial institutions to capture email IDs and mobile numbers to enable electronic service of notices and summons.
Establishment of Special Negotiable Instruments Courts: The Court emphasized the establishment of dedicated fast-track courts staffed by retired judicial officers to adjudicate long-pending Section 138 matters, freeing regular criminal magistrates to attend to core trial docketing.

5. Operative Verdict & Dispositive Directions

The 5-Judge Constitution Bench disposed of Suo Motu Writ Petition (Crl.) No. 2 of 2020 by issuing binding nationwide directions to all High Courts and trial magistrates in India:

The High Courts were directed to frame practice rules and issue administrative circulars within eight weeks incorporating the guidelines on summary trial conversions, Section 202 CrPC inquiries on affidavits, and deemed service of summons. A Committee headed by a sitting Supreme Court Judge was constituted to monitor long-term structural reforms, legislative amendments, and mediation integration for cheque bounce litigation across the country.

6. Statutory Analysis & Comparative Legislative Mapping

Procedural Stage	Negotiable Instruments Act & CrPC (1973)	Bharatiya Nagarik Suraksha Sanhita (BNSS 2023) & BSA
Summary Trial Default	Section 143 NI Act: Summary trial mandatory; conversion to summons trial requires recording reasons.	Section 143 NI Act remains substantive special law, overriding general procedure pursuant to Section 5 BNSS 2023.
Out-of-Station Inquiry	Section 202(1) CrPC: Mandatory inquiry for accused residing beyond court jurisdiction; evidence on affidavit under Section 145 NI Act.	Section 225 BNSS 2023: Retains mandatory inquiry for out-of-jurisdiction accused; governed by In Re Expeditious Trial affidavit rule.
Power to Stop Proceedings	Section 258 CrPC: Power to stop proceedings in summons cases; ruled totally inapplicable to Section 138 complaints.	Section 281 BNSS 2023: Substantively replicates Section 258; continues to be strictly inapplicable to Section 138 complaints.
Joint Trial of Multiple Cheques	Section 219 CrPC: Maximum of 3 offences of same kind committed within 12 months may be tried together.	Section 242 BNSS 2023: Retains 3-offence limit; governed by constitutional recommendation for unified trials.

7. Subsequent Judicial Treatment & Precedential Lineage

Adalat Prasad v. Rooplal Jindal (2004) 7 SCC 338 (3-Judge Bench): Reaffirmed as foundational law; magistrates lack inherent power to recall process.
Subramanium Sethuraman v. State of Maharashtra (2004) 13 SCC 324: Confirmed that issuance of summons under Section 204 is non-recallable by trial court.
Meters and Instruments Pvt. Ltd. v. Kanchan Mehta (2018) 1 SCC 560: Expressly overruled by the 5-Judge Constitution Bench to the extent it held Section 258 CrPC applicable to Section 138 complaints.
In Re: Expeditious Trial of Cases under Section 138 of N.I. Act (2021) 16 SCC 116: Definitive 5-Judge Constitution Bench authority prescribing pan-India trial procedure.
Sunil Todi v. State of Gujarat (2021) SCC OnLine SC 1174: Applied In Re Expeditious Trial to hold that Section 202 CrPC inquiry can be conducted purely on affidavits without examining witnesses.
Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel (2023) 1 SCC 578: Reaffirmed strict trial standards under Section 138 and statutory notice principles.