Can a Dishonour of Cheque Case be Transfered to other State under Sec.406 CrPC? SC answers,

 

 

The Supreme Court has ruled that the power of this Court to transfer criminal cases under Section 406 Cr.P.C. extends to offences under Section 138 of the NI Act.

The Division Bench of Justice Dinesh Maheshwari and Justice Sanjay rejected the contention that the non obstante clause in Section 142(1) of the NI Act would override Section 406 Cr.P.C. and that it would not be permissible for Court to transfer the cheque bounce cases under Section 138 of the NI Act."Notwithstanding the non obstante clause in Section 142(1) of the Act of 1881, the power of this Court to transfer criminal cases under Section 406 Cr.P.C. remains intact in relation to offences under Section 138 of the Act of 1881, if it is found expedient for the ends of justice," the Court held.

The petitioner in the present matter sought the transfer on the ground that all the cheques relate to the same transaction and thereby it would be proper and appropriate that cases pertaining to their dishonour are tried and decided together.

On the other hand, contention on part of the respondent-company was that Section 142 of the Act of 1881 would override Section 406 Cr.P.C., in view of the non obstante clause therein, and that the two cases filed at Nagpur, Maharashtra, therefore cannot be transferred. It was further asserted that Section 142(2) of the Act of 1881 confers exclusive jurisdiction upon the Courts in terms of complaint under Sections 138 and 142 of the Negotiable Instruments Act, 1881.

 The Court pointed out that original Section 142 of the Act of 1881 was renumbered as Section 142(1) when amendments were made in the Act of 1881 by the Negotiable Instruments (Amendment) Act , 2015 (Act 26 of 2015).

"Further, Section 142(2) was inserted in the statute book along with Section 142-A. The newly inserted Section 142(2), to the extent relevant, states that the offence under Section 138 shall be inquired into and tried only by a Court within whose local jurisdiction - (a) if 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 added.

The Court clarified that insertion of Sections 142(2) and 142-A in the Act of 1881 was a direct consequence of the judgment of Dashrath Rupsingh Rathod Vs. State of Maharashtra & ANR., 2014 Latest Caselaw 474 SC and therefore the use of the phrase: ‘shall be inquired into and tried only by a Court within whose local jurisdiction……’in Section 142(2) of the Act 1881 is contextual to the ratio laid down in Dashrath Rupsingh Rathod (supra) to the contrary, whereby territorial jurisdiction to try an offence under Section 138 of the Act of 1881 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 added that the decision in affirmed the legal position obtaining after the amendment of the Act of 1881 and endorsed that Section 142(2)(a) of the Act of 1881 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.

In view of the above, the Court observed: 

"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 added that the decision in affirmed the legal position obtaining after the amendment of the Act of 1881 and endorsed that Section 142(2)(a) of the Act of 1881 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.

In view of the above, the Court observed: 

CASE TITLE:  Yogesh Upadhyay and Anr. Vs. Atlanta Ltd., 2023 Latest Caselaw 126 SC

CASE DETAILS: TRANSFER PETITION (CRIMINAL) NOs. 526-527 OF 2022

CORAM: Justice Dinesh Maheshwari and Justice Sanjay 

CITATION: 2023 Latest Caselaw 126 SC  

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