Thread by @legaljournalist

A significant order by Supreme Court on March 5 could lead to important changes in cheque transactions and KYC guidelines.

The court has among other things suggested that RBI should consider developing a new proforma of cheques so as to include the purpose of payment. #Thread

The order was passed after the counted noted that the high pendency of Section 138 cases was due to the absence of accused.

“As per recent study, more than half of the pending cases, i.e. more than 18 lakh cases, are pending due to absence of accused”, the court observed.

To speed up trial in S. 138 cases, court also asked banks to consider developing an information sharing mechanism to share details of accused with complainant and police

Such details should include email, mobile no. & address of accused to secure presence of accused at trial

The court noted that the problem of absence of accused persisted despite service of summons to the accused through speed post, courier, e-mail or through a police officer.

In order to address this issue, the court said that banks being an important stakeholder in such cases have the responsibility to provide requisite details and facilitate speedy trial mandated by law.

Importantly, court also asked RBI to evolve guidelines to facilitate procurement of requisite information for trial of S. 138 cases.

“A separate software-based mechanism may be developed to track and ensure the service of process on accused in cases relating to S. 138” SC said

It even batted for coercive measure against the accused including attachment of property to secure the presence of the accused.

Importantly, the Supreme Court also urged high courts to consider setting up of exclusive courts to deal with matters relating to Section 138 in places where the pendency of such cases is high.

Significantly, the court did not dispose of the matter. It has registered a suo motu case titled ‘Expeditious trial of cases under Section 138 of NI Act, 1881’ and requested senior advocate Sidharth Luthra and advocate K Parameshwar to assist the court as Amici Curiae.

Notice was issued to the central government, all high courts, the Director General of Police of all the States and Union Territories, Member Secretary of the National Legal Services Authority, RBI and Indian Bank Association, Mumbai as the representatives of banking institutions.

Read the full story here. hindustantimes.com/india-news/dev…