JURISDICTIONAL CLARITY AND INTERIM RELIEF: ASSESSING EFFECTIVENESS OF RECENT AMENDMNETS TO NEGOTIABLE INSTRUMENTS ACT, 1881
AUTHOR – MOHAMMAD ANAS, RESEARCH SCHOLAR (LAW) AT ALIGARH MUSLIM UNIVERSITY
BEST CITATION – MOHAMMAD ANAS, JURISDICTIONAL CLARITY AND INTERIM RELIEF: ASSESSING EFFECTIVENESS OF RECENT AMENDMNETS TO NEGOTIABLE INSTRUMENTS ACT, 1881, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (13) OF 2025, PG. 298-314, APIS – 3920 – 0001 & ISSN – 2583-2344
ABSTRACT
The pendency of cheque dishonor litigation under Section 138 of the Negotiable Instruments Act, 1881 (the ‘NI Act’) has emerged as one of the most significant challenges for India’s judicial system. An Expert Committee was constituted as per the directions of the Hon’ble Supreme Court in Expeditious Trial of Cases Under Section 138 of NI Act, 1881, In re[1] in November 2021, for the purpose of giving suggestions to tackle the pendency of cheque bounce cases, and the pendency in each State. When the report was submitted, among other things, it was brought to the notice of the Supreme Court that within the period of 5 months, from November 2021 to April 2022, the pendency of cheque dishonour cases increased from 26,07,166 to 33,44,290, marking an increase of 7,37,124 cases.
These figures indicate that cheque dishonour cases are not just a marginal problem but a systematic problem. They undermine judicial efficiency and erode commercial certainty. Who can be blamed for this mammoth of pendency—the legal framework, the lagging litigation system, or the judicial system?
Reasons could be the legal framework lagging behind the jurisdiction clarity, which was made more confusing by the various judgments of the high courts and the Supreme Court. As there was no jurisdictional clarity as to where to file the cases, this confusion facilitated the increase in forum shopping by enabling the complainants to institute proceedings across multiple forums.
Judgments like Dashrath Rupsingh Rathod v. State of Maharashtra[2], tried to settle the issue of forum shopping by strictly interpreting the cause of action, and giving jurisdiction to the place where the cheque was dishonoured, meaning the place from where the bank of the payee informs about the cheque bounce. But still, it did not solve the issue of jurisdiction, and was sort of unjust to an accused who may be forced to travel more in case the complaint is filed far away from his place.
The Negotiable Instruments (Amendment) Act, 2015 (‘2015 Amendment Act’) has tried to resolve this issue by dividing the cheque into two categories. According to the newly amended Section 142[3] of the NI Act, in case of an ‘account payee cheque’, the payee’s branch will have jurisdiction, and if it is ‘otherwise than an account payee cheque’, the drawer’s bank branch will have jurisdiction.
On the other hand, there was another issue—the lack of interim relief mechanisms. Many representations were received before the Parliament from the public, including trading community, about the increasing pendency of cheque dishonor cases, and the delayed tactics employed by unscrupulous drawers. They filed appeals, obtained stays, and used techniques to prolong litigation and this denied timely justice to payees. The Negotiable Instruments (Amendment) Act, 2018 (‘2018 Amendment Act) was enacted to introduce Sections 143A and 148 to provide interim reliefs at trial and appeals stage.
The discussion, therefore, seeks to assess whether the combined effect of legislative reform and judicial interpretation has been sufficient to restore confidence in the cheque as a reliable instrument of commerce. It also aims to identify the practical challenges that continue to affect the expeditious resolution of cheque dishonour cases.
[1] Expeditious Trial of Cases Under Section 138 of NI Act, 1881, In re14, 2022 SCC OnLine SC 649.
[2] Dashrath Rupsingh Rathod v. State of Maharashtra, 2014 11 S.C.R. 921.
[3] Section 142, The Negotiable Instruments Act, 1881.