A high-level meeting will be held between the Supreme Court’s mediation and conciliation project committee (MCPC) and government officials on Tuesday to explore ways of resolving the vexed issue of cheque bounce cases, which are clogging India’s judicial system, two people aware of the matter said.
As many as 8.2 million cheque bounce cases are pending in Indian courts, leaving them with little time to focus on other civil and criminal matters and contributing to growing delays across the judicial system.
“The discussion will also focus on measures for banks to settle non-performing asset (NPA) cases through permanent Lok Adalats," said the first of the two persons cited earlier, both of whom spoke on the condition of anonymity.
Lok Adalat is an alternative dispute resolution mechanism where cases are settled amicably without formal court proceedings.
The meeting will be chaired by Supreme Court Justice and chairperson of the MCPC Vikram Nath, and is expected to be attended by Department of Financial Services (DFS) secretary M. Nagaraju, managing directors and chief executive officers (CEOs) of public sector banks and general insurance companies, members of the General Insurance Council, the Indian Banks’ Association (IBA), as well as representatives from the National Legal Services Authority (NALSA).
Experts said that this initiative reflects a clear recognition by the Supreme Court MCPC and the DFS that excessive litigation, especially in cheque bounce and NPA matters, is not just a legal problem but an economic bottleneck.
“The approach is to move from a litigation-heavy enforcement model to a resolution driven framework. Reducing pendency in cheque bounce cases means unlocking stuck money, easing pressure on banks, and improving credit circulation, each of which has a direct bearing on economic growth,” Said Gauhar Mirza, partner at law firm Saraf and Partners.
A similar meeting was last held on 5 February 2026, during which discussions centred on measures to settle one-third of the total pending accident claim cases in tribunals and high courts across India.
Emails sent to the finance ministry, IBA, General Insurance Council, MCPC and NALSA remained unanswered till press time.
Abhishek Singhvi, senior advocate at the Supreme Court, and Rajya Sabha member, said, “India, with the best and the brightest in its legal ecosystem, and despite avant garde doctrines like basic structure and PIL (public interest litigation), suffers the ignominy of humongous arrears and five crore plus case pendency. Two biggest chunks of this are 138 and 498A cases (cheque bounce and dowry-related.) Interactions like this are much needed to find nitty-gritty practical solutions."
He added that the large percentage of cheque drawers and payees would settle on some lower amounts rather than keep running to courts.
“But they do not have a proper and adequate mediation mechanism. That is what will emerge out of such consultations,” Singhvi said.
Section 138 of the Negotiable Instruments Act, 1881 makes cheque dishonour due to insufficient funds or payment stoppage a punishable offence. Section 498A of the Indian Penal Code (Section 85 of the Bharatiya Nyaya Sanhita, 2023) deals with cruelty by a husband or his relatives towards a married woman, including harassment for dowry.
According to the persons cited earlier, in the previous meeting, “The committee decided that General Insurance Council of India shall prepare a draft SOP (Standard operating procedure) with the assistance of the DFS and the MCPC, Supreme Court of India, for Non-Life Insurance Companies for invoking mediation at the threshold level to settle claims."
The second person added that special Lok Adalats for accident claim cases could significantly improve case settlements, and that the NALSA would be apprised of this proposal for further action.
“The committee also advised each non-life insurance company shall undertake in-house due diligence to identify cases in which there is a chance of compromise and provide a list of those cases to the Registrar General of the High Court, under intimation to the MCPC and Department of Financial Services,” the first person cited earlier said.
Mukesh Chand, senior counsel, Economic Laws Practice, said, “Section 138 was introduced in 1988 to strengthen cheque credibility by attaching criminal consequences to dishonour of cheques, (but) has not delivered the intended deterrence. Over 8.2 million pending cases reflect systemic congestion rather any systematic improvement. A large number of these cases arise from loan or commercial defaults, which are essentially civil default in nature but are being pursued as criminal offences, leading to multiplicity alongside SARFAESI/DRT/Civil proceedings and overburdening the legal system."
SARFAESI refers to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, which gives banks powers to recover dues by enforcing collateral without court intervention. DRTs, or Debt Recovery Tribunals, decide cases related to recovery of debts by banks and financial institutions, while civil proceedings involve recovery suits filed before various civil courts in the country.
Chand added that the framework needs recalibration, from the present criminalization to resolution, by treating such matters, at least for institutional cases, as execution proceedings rather than criminal complaints. Platforms like Lok Adalat can be meaningful if they are time-bound and outcome-focused.
The MCPC was constituted by the Supreme Court to oversee the effective implementation of mediation and conciliation in the country. Justice R.C. Lahoti, the then Chief Justice of India, by an administrative order, set up the Mediation and Conciliation Project Committee on 9 April 2005, under the chairmanship of Justice N. Santosh Hegde. MCPC ensures a regulated growth and evolution of mediation as dispute resolution mechanism by conducting various mediation training programmes in the country.