The Supreme Court has asked the Reserve Bank of India (RBI) to consider developing a new proforma of the cheque, which would mention the purpose of the payment. The top court, aiming at speeding up the trial of an accused in cheque bounce cases under Section 138 of the Negotiable Instruments Act (which fastens criminal liability for cheque bouncing), advised banks to consider developing an information-sharing mechanism to share details of the accused with the complainant and the police.
During the hearing of a case on 10 March, the Supreme Court sent a list of suggestions to the RBI. There are many such changes in this list that will change many other processes in cheque bounce cases.
A bench of Chief Justice SA Bobde and Justice L Nageswara Rao filed a petition, taking suo motu cognisance of cases dishonouring of the banking instrument to develop a mechanism to deal with this issue in Indian banking.
“With ensuring the credibility of cheques, it is equally important that cheques are not allowed to be misused giving cause to frivolous litigation. The Reserve Bank of India may consider developing a new proforma of cheques so as to include the purpose of payment, along with other information mentioned above to facilitate adjudication of real issues”, the bench said.
The apex court said that, along with ensuring the credibility of the cheque, it is important that the cheque cannot be allowed to be misused in unnecessary litigation. The RBI may consider developing a new proforma of cheques to cover the purpose of payment, along with other issues to facilitate deferral of the actual issues.
The bench said that it was the responsibility of the central bank, being an important stakeholder in matters of this nature, to provide the necessary details and facilitate the mandatory testing by law.
A mechanism for information sharing can be developed where banks share all the necessary details available with the complainant and the accused — the account holder — for the purpose of execution of the process. This may include the need to enter related information, such as email ID, registered mobile number and permanent address of the account holder, informing the holder about the dishonour of his/her cheque.
At present, the bank’s name, account number, account holder sign, bank’s IFSC, its MRCR and bank branch’s address are mentioned on a bank cheque.
A cheque is said to be honoured if the banks give the amount to the payee. While, if the bank refuses to pay the amount to the payee, the cheque is said to be dishonoured. In other words, dishonour of cheque is a condition in which a bank refuses to pay the amount of cheque to the payee.