Cheque bouncing cases: Banks to set up Lok Adalats

The Law ministry is working on amendments to the Legal Services Authority Act that would allow leading banks to set up permanent Lok Adalats on their premises for settlement of all disputes related to cheque bounce.

Retired district judges or additional district judges will be appointed as chairpersons of such Lok Adalats in consultation with the high court concerned and the state government. A draft note has been circulated to departments concerned, said a senior law ministry official. By the time the new government is formed, the amendment bill may be ready for the cabinet to take a decision.

The finance ministry had earlier proposed to amend the Negotiable Instruments Act that would restrict banks from dragging offenders of cheque bounce cases to courts.

It is estimated that more than 30% of all the pending cases in courts across the country are either related to cheque bounce or traffic challans and once these amendments are passed by Parliament, the pendency of court cases are likely to come down substantially.

Ruling of Lok Adalats is deemed to be decree of a civil court and considered binding on all parties concerned.

Pendency of cases is a major issue before courts. Currently there are more than 3.20 crore pending cases in different courts. Of this nearly 2.76 crore cases are in the subordinate courts while 44 lakh are pending in various high courts and nearly 60,000 in the Supreme Court.

Due to cases like that of cheque bounce and traffic challans, many offences related to heinous crimes remain pending for decades.

The proposed amendment in the NI Act was suggested by an Inter-Ministerial Group (IMG) which was set up to make suggestions for necessary policy and legislative changes to deal with a large number of cases pending in various courts. Setting up of Lok Adalats are in tune with the recommendation of IMG.

The surface transport ministry has also been working on making suitable changes in related law so that cases of traffic challans are kept out of courts unless some other criminal intent is alleged.

The changes in the NI Act will make it compulsory for the disputing parties to resolve the matter through alternative dispute resolution mechanism such as the Lok Adalat.