Supreme Court Guidelines on Cheque Bounce Cases 2025

On 25 September 2025, the Hon’ble Supreme Court of India in Sanjabij Tari v. Kishore S. Borcar & Anr delivered a landmark judgment addressing the massive backlog of cheque bounce cases under Section 138 of the Negotiable Instruments Act, 1881. The judgment, authored by Justice Manmohan and Justice N.V. Anjaria, restores focus on the quasi-criminal, victim-centric nature of such cases and provides binding directions for all trial courts and High Courts.

Background and Context

The Court observed that nearly half of all criminal case pendency in metropolitan trial courts arises from cheque dishonour complaints. Despite earlier precedents like Indian Bank Association v. Union of India (2014) and Damodar S. Prabhu v. Sayed Babalal H. (2010), systemic delays persisted. Section 138 was designed to promote financial discipline and restore credibility of cheques as a substitute for cash, but the sheer volume of cases diluted its deterrent value.

Key Guidelines Issued by the Supreme Court

The judgment lays down detailed directions to speed up trials and promote early settlement:

• Service of Summons: Courts must allow dasti service by complainants and encourage electronic service (email, WhatsApp, etc.), with a mandatory affidavit of service.
• Digital Settlement: District courts should set up QR/UPI-enabled payment gateways so that accused persons can directly pay the cheque amount at the threshold stage.
• Synopsis with Every Complaint: Complainants must file a one-page synopsis containing key cheque details, dishonour memo, statutory notice, cause of action, pending litigations, and relief sought.
• Summary Trials: Magistrates must proceed with summary trial under Chapter XXI CrPC / Chapter XXII BNSS. Conversion to summons trial is allowed only with recorded reasons.
• Compounding Costs: The earlier Damodar S. Prabhu grid was revised — no cost if compounded before defence evidence, 5% at trial stage, 7.5% at High Court stage, and 10% at Supreme Court stage.
• Dashboards & Monitoring: District Judges in Delhi, Mumbai, and Calcutta must maintain live dashboards on pendency, disposals, and compounding rates, with quarterly reports to High Courts.

Clarifications on Legal Issues

• Presumption of Liability: Once execution of cheque is admitted, presumptions under Sections 118 and 139 NI Act apply, shifting the burden to the accused.
• Cash Loans: Even if cash transactions breach Income Tax Act Section 269SS, the debt remains enforceable for Section 138 purposes.
• Failure to Reply to Notice: Non-reply to statutory notice permits adverse inference against the accused.

Impact and Implementation

The judgment directs all High Courts and District Courts to implement the guidelines by 1 November 2025. It underscores the importance of technology-driven solutions, structured pleadings, and calibrated compounding to reduce case backlogs.

Conclusion

The decision in Sanjabij Tari v. Kishore S. Borcar & Anr. marks a significant step in strengthening cheque-based transactions in India. By balancing complainant rights with fair treatment of accused persons, the Court has provided a modern framework for efficient and equitable resolution of cheque bounce disputes.

Disclaimer: This blog is for general informational purposes only and should not be taken as legal advice. Please consult a qualified lawyer for case-specific guidance.

Annexure – Complaint under Section 138 NI Act

This Annexure format was prescribed by the Hon’ble Supreme Court in Sanjabij Tari v. Kishore S. Borcar & Anr. (25 September 2025). It must be filed as part of every complaint to streamline case management.

I. Particulars of the Parties

(i) Complainant: ____________

(ii) Accused: ____________

(In case of company/firm: Registered Address, Name of MD/Partner, Name of signatory, and persons vicariously liable)

II. Cheque Details

(i) Cheque No.: ____________

(ii) Date: _________________

(iii) Amount: _______________

(iv) Drawn on Bank/Branch: _______________

(v) Account No.: ____________

III. Dishonour

(i) Date of Presentation: _______________

(ii) Date of Return/Dishonour Memo: _______________

(iii) Branch where cheque dishonoured: _______________

(iv) Reason for Dishonour: _______________

IV. Statutory Notice

(i) Date of Notice: _______________

(ii) Mode of Service: _______________

(iii) Date of Dispatch & Tracking No.: _______________

(iv) Proof of Delivery & Date: _______________

(v) Whether served: _______________

(vi) If not, reasons thereof: ____________

(vii) Reply to Legal Demand Notice, if any: _______________

V. Cause of Action

(i) Date of accrual: _______________

(ii) Jurisdiction invoked under Section 142(2): _______________

(iii) Whether any other complaint under Section 138 NI Act is pending between same parties (give Court, date, year): _______________

VI. Relief Sought

(i) Summoning of accused and trial under Section 138 NI Act: _______________

(ii) Whether award of Interim Compensation under Section 143A NI Act sought: _______________

VII. Filed Through

Complainant/Authorized Representative: _______________