Recently, The Supreme Court ruled that a cheque bounce case can be transferred from one State to another under Section 406 CrPC.
The bench of Justices Dinesh Maheshwari and Sanjay Kumar was dealing with the transfer petitions filed under Section 406 Cr.P.C. The six complaint cases were filed against the petitioners by the respondent, under Sections 138 and 142 of the Negotiable Instruments Act, 1881.
In this case, The six cheques were issued by the petitioners in connection with the purchase of a NAWA-make crusher plant from the respondent company for a sum of ₹1,88,80,000/-, under the Agreement. This sale consideration was to be paid in seven instalments by way of cheques.
The first cheque issued by the petitioners for a sum of ₹11,80,000/- was duly honoured upon presentation by the respondent company. The remaining six cheques, however, were dishonoured on the strength of ‘Stop payment’ instructions.
The first two cheques that came to be dishonoured were presented by the respondent company through its bank in Nagpur, Maharashtra. The first two complaint cases were accordingly filed before the Courts at Nagpur, Maharashtra.
The remaining four cheques were thereafter presented by the respondent company through its bank in New Delhi and in consequence, those complaint cases were filed before the Dwarka Courts, New Delhi.
The bench observed that the offence under Section 138 of the Act of 1881 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. However, jurisdiction to try this offence remained a troublesome issue for a long time.
Supreme Court referred to the case of A.E. Premanand v. Escorts Finance Ltd. & Others, where the Court took note of the fact that the offences therein, under Section 138 of the Act of 1881, had arisen out of one single transaction and found it appropriate and in the interest of justice that all such cases should be tried in one Court.
The bench held that 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.
Supreme Court stated that the institution of the first two complaint cases before the Courts at Nagpur is in keeping with the legal position obtaining now. However, 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.
The bench noted “……………..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……………”
Supreme Court noted 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. As four of the six cases have been filed by the respondent company before the Dwarka Courts at New Delhi and only two such cases are pending before the Courts at Nagpur, Maharashtra, it would be convenient and in the interest of all concerned, including the parties and their witnesses, that the cases be transferred to the Dwarka Courts at New Delhi.
In view of the above, the bench dismissed the appeal.
Case Title: Yogesh Upadhyay and Anr. v. Atlanta Limited
Bench: Justices Dinesh Maheshwari and Sanjay Kumar
Case No.: TRANSFER PETITION (CRIMINAL) NOs. 526-527 OF 2022
Counsel for the petitioner: Mr. Rajmangal Kumar
Counsel for the respondent: Mr. Chirag M. Shroff
