In a significant ruling, the Supreme Court of India has held that mere inconvenience to an accused cannot be a ground for transferring a case under Section 406 of the Code of Criminal Procedure (CrPC). The judgment was delivered in Transfer Petition (Crl.) No. 608 of 2024 and other connected petitions, involving M/s Shri Sendhur Agro & Oil Industries v. Kotak Mahindra Bank Ltd., wherein the petitioner sought the transfer of a cheque bounce case from Chandigarh to Coimbatore, Tamil Nadu.
Background of the Case
The case originated from a complaint filed by Kotak Mahindra Bank Ltd. under Section 138 of the Negotiable Instruments Act, 1881, for dishonor of a cheque amounting to Rs. 21 lakhs. The complaint was lodged in Chandigarh, where the bank maintained its collection account. The petitioner, M/s Shri Sendhur Agro & Oil Industries, argued that all business transactions, including loan disbursement and repayments, took place in Coimbatore, Tamil Nadu, and therefore, Chandigarh had no jurisdiction over the matter.
The petitioner sought a transfer of the case to Coimbatore, citing multiple reasons, including the location of its business, the place of financial transactions, language barriers, and alleged harassment due to multiple legal proceedings in different jurisdictions.
Key Legal Issues
The Supreme Court was called upon to decide:
Whether a complaint under Section 138 of the Negotiable Instruments Act can be transferred under Section 406 of the CrPC solely on the ground of inconvenience to the accused.
Whether the existence of multiple legal proceedings in different states could be considered a valid reason for transfer.
Whether the principle of ‘ends of justice’ under Section 406 CrPC allowed for a transfer when jurisdiction was otherwise validly established.
Court’s Observations and Decision
A bench led by Justices JB Pardiwala and R Mahadevan dismissed the transfer petition, holding that mere inconvenience to the accused does not constitute a valid ground for transferring a criminal case. The court noted that under Section 142(2)(a) of the Negotiable Instruments Act, jurisdiction is conferred on the court where the payee’s bank is located. Since Kotak Mahindra Bank’s collection account was in Chandigarh, the case was validly instituted there.
Key observations of the Court:
“The legislative intent of Section 142A of the Negotiable Instruments Act prevents misuse of multiple jurisdictions by complainants, but it does not automatically entitle an accused to seek transfer for convenience.”
“The accused has not demonstrated any legal bar to the proceedings in Chandigarh nor shown any substantial prejudice that would impair his defense.”
“A financial institution should not be compelled to initiate proceedings in multiple locations solely to accommodate the convenience of an accused.”
The court also cited previous judgments, including Kaushik Chatterjee v. State of Haryana (2020) 10 SCC 92 and Yogesh Upadhyay v. Atlanta Ltd. (2023 SCC OnLine SC 170), reaffirming that territorial jurisdiction in cheque bounce cases is determined by where the payee’s bank is located.
Arguments by the Parties
Petitioner’s Counsel, Senior Advocate Nikhil Goel, argued that Coimbatore was the most appropriate jurisdiction as the entire transaction, including loan sanctioning and repayments, took place there. He also contended that attending hearings in Chandigarh posed financial and logistical hardships for the accused.
Respondent’s Counsel, representing Kotak Mahindra Bank Ltd., countered that the petitioner’s claims were baseless since the complaint was filed in accordance with the law. The bank maintained that since all other related complaints were filed in Chandigarh, transferring some cases while retaining others would go against the intent of Section 142A of the Act.
