Cheque Cases Can Be Transferred From One State To Another Invoking Section 406 CrPC : Supreme Court

The Supreme Court observed that it has power under Section 406 CrPC to transfer cheque cases from one state to another.

Notwithstanding the nonobstante clause in Section 142(1) of the NI Act, 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 bench of Justices Dinesh Maheshwari and Sanjay Kumar observed.

In this matter, four of the six cases have been filed by a company before the Dwarka Courts at New Delhi and two such cases are pending before the Courts at Nagpur, Maharashtra. The Petitioners- accused approached the Apex Court seeking transfer of two cases from Nagpur Court to Dwarka Courts.

Opposing this petition, the complainant-respondents contended 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 the Court to transfer the said complaint cases, in exercise of power thereunder.

The court noted that 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 is contextual to the ratio laid down in Dashrath Rupsingh Rathod Vs. State of Maharashtra and another [(2014) 9 SCC 129], 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.

"It may be 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 of the Act of 1881, as a departure has to be made from the usual procedure inasmuch as prosecution for the said offence stands postponed despite commission of the offence being complete upon dishonour of the cheque and it must necessarily be in terms of the procedure prescribed. The clause, therefore, has to be read and understood in the context and for the purpose it is used and it does not lend itself to the interpretation that Section 406 Cr.P.C. would stand excluded vis-à-vis offences under Section 138 of the Act of 1881. The power of this Court to transfer pending criminal proceedings under Section 406 Cr.P.C. does not stand abrogated thereby in respect of offences under Section 138 of the Act of 1881."

Observing thus, the bench allowed the Transfer Petition.

Case details

Yogesh Upadhyay vs Atlanta Limited | 2023 LiveLaw (SC) 125 | Transfer Petition (Crl) 526-527 OF 2022 | 21 Feb 2023 | Justices Dinesh Maheshwari and Sanjay Kumar

For Petitioner(s) Mr. Rajeev Singh, AOR

For Respondent(s) Mr. Chirag M. Shroff, AOR

Headnotes

Code of Criminal Procedure, 1973 ; Section 406 - Negotiable Instruments Act, 1881 ; Section 138, 142(1) - 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 Cr.P.C. remains intact in relation to offences under Section 138 of the NI Act - the contention that the non obstante clause in Section 142(1) of the Act of 1881 would override Section 406 Cr.P.C. and that it would not be permissible for this Court to transfer the said complaint cases, in exercise of power thereunder, cannot be countenanced. (Para 13)

Negotiable Instruments Act, 1881 ; Section 138 - The offence under Section 138 is complete upon dishonour of the cheque but prosecution in relation to such offence is postponed, by virtue of the provisos therein, till the failure of the drawer of the cheque to make the payment within 15 days of receiving the demand notice. (Para 5)

Negotiable Instruments Act, 1881 ; Section 138, 142(2)(a) - 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. - Referred to Bridgestone India Private Limited Vs. Inderpal Singh [(2016) 2 SCC 75] (Para 12)

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