Summons Shall Mention That Accused Can Make Payment Of Cheque Amount At Initial Stage: Supreme Court Issues New Guidelines For Cases U/S.138 NI Act

The Apex Court also set aside a Kerala High Court ruling and clarified that a debt created by a cash transaction above Rs. 20,000 falls within the definition of ‘legally enforceable debt’. The Apex Court also held that any violation of Section 269SS of the Income Tax Act would not render the transaction unenforceable under Section 138 of the NI Act.

The appeal before the Apex Court was filed against the ex parte judgment and order of the Goa Bench of the Bombay High Court, acquitting the Respondent Accused under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) and reversing the concurrent judgments of the Trial Court and the Sessions Court.

The Division Bench of Justice Manmohan and Justice N.V. Anjaria held, “In order to facilitate expeditious settlement of cases under Section 138 of the NI Act, the Principal District and Sessions Judge of each District Court shall create and operationalise dedicated online payment facilities through secure QR codes or UPI links. The summons shall expressly mention that the Respondent/Accused has the option to make payment of the cheque amount at the initial stage itself, directly through the said online link. The complainant shall also be informed of such payment and upon confirmation of receipt, appropriate orders regarding release of such money and compounding/closure of proceedings under Section 147 of the NI Act and/or Section 255 of Cr.P.C./278 BNSS, 2023 may be passed by the Court in accordance with law. This measure shall promote settlement at the threshold stage and/or ensure speedy disposal of cases.”

Advocate Amarjit Singh Bedi represented the Appellant, while Advocate Ankit Yadav represented the Respondent.

Guidelines & Directions

Keeping in view the massive backlog of such cases, the Bench issued various guidelines and directions, including the following:

• In all cases filed under Section 138 of the NI Act, service of summons shall not be confined through prescribed usual modes but shall also be issued dasti i.e. summons shall be served upon the accused by the complainant in addition.
• The complainant shall file an affidavit of service before the Court. In the event such affidavit is found to be false, the Court shall be at liberty to take appropriate action against the complainant in accordance with law.
• The summons shall expressly mention that the Respondent/Accused has the option to make payment of the cheque amount at the initial stage itself, directly through the said online link.
• Each and every complaint under Section 138 of the NI Act shall contain a synopsis in the format (described by the Bench) which shall be filed immediately after the index (at the top of the file) i.e. prior to the formal complaint.
• The Court shall record the responses to the questions in the ordersheet in the presence of the accused and his/her counsel and thereafter determine whether the case is fit to be tried summarily under Chapter XXI of the Cr.P.C. / Chapter XXII of the BNSS, 2023.
• Wherever, the Trial Court deems it appropriate, it shall use its power to order payment of interim deposit as early as possible under Section 143A of the NI Act.
• Each District and Sessions Judge in Delhi, Mumbai and Calcutta shall maintain a dedicated dashboard reflecting the pendency and progress of cases under Section 138 of the NI Act.

The Bench also requested the Chief Justices of Delhi, Bombay and Calcutta to form a Committee on the Administrative side to monitor pendency and to ensure expeditious disposal of Section 138 of the NI Act cases.

Referring to the judgment of the Karnataka High Court in Ashok Vs. Fayaz Aahmad, (2025) where it has been held that there is no need for the Magistrate to issue summons to the accused before taking cognizance (under Section 223 of BNSS) of complaints filed under Section 138 of NI Act, the Bench said, “This Court is in agreement with the view taken by the High Court of Karnataka. Consequently, this Court directs that there shall be no requirement to issue summons to the accused in terms of Section 223 of BNSS i.e., at the pre-cognizance stage.”

Considering that the Apex Court had framed guidelines for compounding offences under the NI Act nearly fifteen years back in Damodar S. Prabhu vs. Sayed Babalal H. (2010), the Bench held, “Since a very large number of cheque bouncing cases are still pending and interest rates have fallen in the last few years, this Court is of the view that it is time to ‘revisit and tweak the guidelines’.”

The Bench also modified the guidelines of compounding as under:-

• If the accused pays the cheque amount before recording of his evidence (namely defence evidence), then the Trial Court may allow compounding of the offence without imposing any cost or penalty on the accused.
• If the accused makes the payment of the cheque amount post the recording of his evidence but prior to the pronouncement of judgment by the Trial Court, the Magistrate may allow compounding of the offence on payment of additional 5% of the cheque amount with the Legal Services Authority or such other Authority as the Court deems fit.
• Similarly, if the payment of cheque amount is made before the Sessions Court or a High Court in Revision or Appeal, such Court may compound the offence on the condition that the accused pays 7.5% of the cheque amount by way of costs.
• Finally, if the cheque amount is tendered before this Court, the figure would increase to 10% of the cheque amount.

The Bench also clarified that if the Accused is willing to pay in accordance with the aforesaid guidelines, the Court may suggest to the parties to go for compounding. “If for any reason, the financial institutions/complainant asks for payment other than the cheque amount or settlement of entire loan or other outstanding dues, then the Magistrate may suggest to the Accused to plead guilty and exercise the power under Section 255(2) and/or 255(3) of the Cr.P.C. or 278 of the BNSS, 2023 and/or give the benefit under the Probation of Offenders Act, 1958 to the Accused”, it concluded.

Cause Title: Sanjabij Tari v. Kishore S.Borcar (Neutral Citation: 2025 INSC 1158)

Appearance

Appellant: Advocates Amarjit Singh Bedi, Surekha Raman, Shreyash Kumar, Harshit Singh, Sidharth Nair, AOR M/S. K J John And Co

Respondent: Advocate Ankit Yadav, AOR T. Mahipal, Gunjan Rathore, Shivangi Gulati, Chaitanya Sonkeria, Aastha Harshwal, AOR Merusagar Samantaray

Click here to read/download Judgment