Characterising Cheque Dishonour Cases in India: Causes for Delays and Policy Implications

Abstract

Cheque-dishonour cases constitute a significant portion of litigation in India. These cases are thought to be major contributors to overall pendency and delays in courts. The Supreme Court of India, in 2020, set up a committee and appointed Amici Curiae to formulate recommendations to reduce delays in cheque-dishonour cases. The recommendations target certain aspects of cheque-dishonour cases, however, empirical evidence supporting these recommendations is lacking. In this study we present an empirical analysis of the impact of six major characteristics of cases, which are the targets of the Supreme Court Committee and Amici Curiae’s recommendations. We find that many of the recommendations — more summary trials, clarifying jurisdictions, ensuring presence of the accused, reducing multiplicity of proceedings, and increasing the number of courts — may indeed reduce the delays in cheque-dishonour cases. However, the recommendation to encourage more mediation is likely to cause more delays instead of reducing them. We thus demonstrate the importance of using empirical analysis to underpin important policy decisions in judicial procedure.

Keywords: Negotiable Instruments Act, cheque dishonour, empirical judicial studies

JEL Classification: K41, K39, K40, K20