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SUPREME COURT OF INDIA
DINESH MAHESHWARI, SANJAY KUMAR, JJ.
Yogesh Upadhyay and Another – Petitioners
Versus
Atlanta Limited – Respondent
Transfer Petition (Criminal) Nos. 526-527 of 2022
Decided On : 21-02-2023
(A) Negotiable Instruments Act, 1881 – Section 138 and 142 – Criminal Procedure Code, 1973 – Sections 177 and 178 – Transfer of case – Offence of dishonour of cheque – Offence under Section 138 of Act of 1881 is complete upon dishonour of cheque but prosecution in relation to such offence is postponed till failure of drawer of cheque to make payment within 15 days of receiving demand notice – Place, situs or venue of judicial inquiry and trial of offence must logically be restricted to where cheque is dishonoured upon presentation and not where complainant’s bank is situated – No Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of First Class shall try offence punishable under Section 138. (Paras 5, 7 and 8)
(B) Criminal Procedure Code, 1973 – Section 406 – Negotiable Instruments Act, 1881 – Section 138, 142(2) and 142-A – Transfer of case – Offence of dishonour of cheque – Jurisdiction to try such an offence would vest only in Court within whose jurisdiction branch of Bank where cheque was delivered for collection, through account of payee or holder in due course, is situated – Contention that non obstante clause in Section 142(1) of Act of 1881 would override Section 406 Cr.P.C. and that it would not be permissible for Supreme Court to transfer complaint cases, in exercise of power thereunder, cannot be countenanced – Power of Supreme 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 Act of 1881 – Supreme Court exercised power under Section 406 Cr.P.C. in relation to offences under Section 138 of Act of 1881 even during the time original Section 142 held field. (Paras 11 and 13)
(C) Criminal Procedure Code, 1973 – Section 406 – Negotiable Instruments Act, 1881 – Section 138, 142(2) and 142-A – Transfer of case – Offence of dishonour of cheque – Notwithstanding non obstante clause in Section 142(1) of Act of 1881, power of Supreme Court to transfer criminal cases under Section 406, Cr.P.C. remains intact in relation to offences under Section 138 of Act of 1881, if it is found expedient for ends of justice – In case on hand, as six complaint cases pertain to same transaction, it would be advisable to have a common adjudication to obviate possibility of contradictory findings being rendered in connection therewith by different Courts – As four of six cases have been filed by respondent company before Dwarka Courts at New Delhi and only two such cases are pending before Courts at Nagpur, Maharashtra, it would be convenient and in interest of all concerned, including parties and their witnesses, that cases be transferred to Dwarka Courts at New Delhi. (Paras 13 and 14)
Facts of the case:
By way of these transfer petitions filed under Section 406 Cr.P.C., Yogesh Upadhyay and his proprietary concern, M/s. Shakti Buildcon, seek transfer of SCC Nos.25668/2019 and 26875/2019, pending before Jt. Civil Judge, Senior Division, Nagpur, and the learned 20th Civil
Judge, Senior Division, Nagpur, respectively, to South West District Courts, Dwarka, New Delhi, to be tried along with Complaint Case Nos. 42489/2019, 1464/2020, 7596/2020 and 4094/2020. These six complaint cases were filed against the petitioners by Atlanta Limited, the respondent herein, under Sections 138 and 142 of the Negotiable Instruments Act, 1881.
Findings of Court:
SCC Nos.25668/2019 and 26875/2019, pending on the files of the learned 22nd Jt. Civil Judge, Senior Division, Nagpur; and the learned 20th Civil Judge, Senior Division, Nagpur, respectively, are transferred to the South West District Courts, Dwarka, New Delhi, to be tried along with Complaint Case Nos. 42489/2019, 1464/2020, 7596/2020 and 4094/2020.
Result : Transfer Petitions allowed.
JUDGMENT :
SANJAY KUMAR, J.
1. By way of these transfer petitions filed under Section 406 Cr.P.C. Yogesh Upadhyay and his proprietary concern, M/s. Shakti Buildcon, seek transfer of SCC Nos. 25668/2019 and 26875/2019, both titled Atlanta Limited vs. M/s Shakti Buildcon and Another, pending before the learned 22nd Jt. Civil Judge, Senior Division, Nagpur and the learned 20th Civil Judge, Senior Division, Nagpur, respectively, to the South West District Courts, Dwarka, New Delhi, to be tried along with Complaint Case Nos. 42489/2019, 1464/2020, 7596/2020 and 4094/2020, all titled Atlanta Limited vs. Yogesh Upadhyay. These six complaint cases were filed against the petitioners by Atlanta Limited, the respondent herein, under Sections 138 and 142 of the Negotiable Instruments Act, 1881 [for short ‘the Act of 1881’].
2. The six cheques, which are the subject-matter of these complaint cases, were issued by the petitioners in connection with purchase of a NAWA-make crusher plant from the respondent company for a sum of Rs. 1,88,80,000/- under Agreement dated 04.06.2019. ? This sale consideration was to be paid in seven installments by way of cheques. The first cheque issued by the petitioners for a sum of Rs. 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 at 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 at New Delhi and in consequence, those complaint cases were filed before the Dwarka Courts, New Delhi.
3. Mr. Rajmangal Kumar, learned counsel, appearing for the petitioners, would contend that as all the cheques relate to the same transaction, it would be proper and appropriate that the cases pertaining to their dishonour are tried and decided together. He would rely on case law to support his contention.
4. On the other hand, Mr. Chirag M. Shroff, learned counsel for the respondent company, would contend 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. Further, he would assert that Section 142(2) of the Act of 1881 confers exclusive jurisdiction upon the Courts at Nagpur in so far as the first two complaint cases are concerned. He would also place reliance on case law.
5. It is now well settled 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.
6. In K. Bhaskaran vs. Sankaran Vaidhyan Balan and Another, (1999) 7 SCC 510, this Court held that an offence under Section 138 of the Act of 1881 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.
7. Thereafter, in Dashrath Rupsing
Transfer of case – Offence of dishonour of cheque – Power of Supreme Court to transfer pending criminal proceedings under Section 406 Cr.P.C. does not stand abrogated thereby in respect of offences u....
(1) Dishonour of cheque – Jurisdiction to try complaint filed under Section 138 in respect of cheque delivered for collection through an account payee cheque, is vested in court within whose local ju....
The jurisdiction for offenses under Section 138 of the Negotiable Instruments Act is determined by the location where the cheque was presented for collection, and a transfer of proceedings to the app....
In terms of Section 407 Cr.P.C court can exercise jurisdiction for transferring cases.
Jurisdiction for complaints under Section 138 of the N.I. Act lies where the cheque is presented for collection; mere inconvenience does not justify transfer under Section 406 Cr.P.C.
The central legal point established in the judgment is the importance of jurisdictional provisions in determining the appropriate court for filing a complaint case under Section 138 of the Negotiable....
Transfer of proceedings under Section 138 of the N.I. Act should consider the relative convenience of parties, especially in cases where there is a significant disparity in their socio-economic statu....
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