Supreme Court: In transfer petitions filed under Section 406 of Code of Criminal procedure 1973 (‘CrPC’) by the petitioner seeking transfer of two complaint cases filed against him for offences under Sections 138 and 142 of the Negotiable Instruments Act, 1881 (‘NI Act’) from Civil Judge, Senior Division, Nagpur to the South West District Courts, Dwarka, New Delhi, to be tried along with other four complaint cases Dinesh Maheshwari and Sanjay Kumar, JJ. while allowing the transfer petitions, held that notwithstanding the non obstante clause in Section 142(1) of the NI Act, the power of this Court to transfer criminal cases under Section 406 CrPC. remains intact in relation to offences under Section 138 of the NI Act of 1881, if it is found expedient for the ends of justice.
The Court said that it is well settled that the offence under Section 138 of NI Act is complete upon dishonour of the cheque, but prosecution in relation to such offence is postponed till the failure of the drawer of the cheque to make the payment within 15 days of receiving the demand notice. However, jurisdiction to try this offence remained a troublesome issue for a long time.
The Court took note of K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510, wherein it was held that an offence under Section 138 of the NI Act has five components:
(1) drawing of the cheque,
(2) presentation of the cheque to the bank,
(3) returning of the cheque unpaid by the drawee bank,
(4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, and
(5) failure of the drawer to make payment within 15 days of the receipt of the notice.
It was further held that the Courts having jurisdiction over the territorial limits wherein any of the five acts, that constitute the components of the offence, occurred would have the jurisdiction to deal with the case and if the five acts were done in five different areas, any one of the Courts exercising jurisdiction in those five areas would have jurisdiction and the complainant could choose any one of those Courts.
Further, it relied on Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129, wherein it was held that the place, situs or venue of judicial inquiry and trial of the offence must logically be restricted to where the drawee bank is located, i.e., where the cheque is dishonoured upon presentation and not where the complainant’s bank is situated.
The Court took note of Section 142 of NI Act (notwithstanding anything contained in CrPC, 1973, no Court shall take cognizance of an offence punishable under Section 138 NI Act except on a complaint in writing made by the payee or, as the case may be, the holder in due course of the cheque…) and the Negotiable Instruments (Amendment) Act, 2015 , and said that the newly inserted Section 142(2) states that the offence under Section 138 shall be inquired into and tried only by a Court within whose local jurisdiction the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated.
The Court after examining the statement of objects and reasons in NI Amendment Act, 2015, it said that the insertion of Sections 142(2) and 142-A in the NI Act was a direct consequence of the judgment in Dashrath Rupsingh Rathod (supra). Thus, the territorial jurisdiction to try an offence under Section 138 is vested in the Court having jurisdiction over the drawee bank and not the complainant’s bank where he had presented the cheque. Section 142(2) now makes it clear that the jurisdiction to try such an offence would vest only in the Court within whose jurisdiction the branch of the Bank where the cheque was delivered for collection, through the account of the payee or holder in due course, is situated. The newly inserted Section 142-A further clarifies this position by validating the transfer of pending cases to the Courts conferred with such jurisdiction after the amendment.
The Court further noted that Bridgestone India Private Limited v. Inderpal Singh, (2016) 2 SCC 75 affirmed the legal position obtained after the amendment of the NI Act and endorsed that Section 142(2)(a) vests jurisdiction for initiating proceedings for an offence under Section 138 in the Court where the cheque is delivered for collection, i.e., through an account in the branch of the bank where the payee or holder in due course maintains an account.
Therefore, the Court said that the institution of the first two complaint cases before the Courts at Nagpur is in keeping with the legal position obtaining now. However, it rejected the contention that the non obstante clause in Section 142(1) of the NI Act would override Section 406 CrPC and that it would not be permissible for this Court to transfer the said complaint cases.
The Court noted that the non obstante clause was there in the original Section 142 itself and was not introduced by way of the amendments in the year 2015, along with Section 142(2). The said clause merely has reference to the manner in which cognizance is to be taken in offences under Section 138. Further, the power of Supreme Court to transfer pending criminal proceedings under Section 406 CrPC does not stand abrogated thereby in respect of offences under Section 138 of the Act of 1881.
After placing reliance on A.E. Premanand v. Escorts Finance Ltd., (2004) 13 SCC 527, the Court held that notwithstanding the non obstante clause in Section 142(1) of the NI Act, the power of this Court to transfer criminal cases under Section 406 CrPC. remains intact in relation to offences under Section 138 of the NI Act of 1881, if it is found expedient for the ends of justice.
Further, it said that, as the six complaint cases pertain to the same transaction, it would be advisable to have a common adjudication to obviate the possibility of contradictory findings being rendered in connection therewith by different Courts.
[Yogesh Upadhyay v. Atlanta Limited, 2023 SCC OnLine SC 170, decided on 21-02-2023]
Judgment by: Justice Sanjay Kumar
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