Supreme Court: In a batch of transfer petitions under Section 406 of the Code of Criminal Procedure, 1973 (‘CrPC’) to transfer the criminal case under Section 138 of the Negotiable Instruments Act, 1881 (‘N.I. Act) pending before the Judicial Magistrate Ist Class, Chandigarh (UT) to the Court of Metropolitan Magistrate, Coimbatore, Tamil Nadu, essentially on the ground that there was no cause of action for the bank to lodge the complaint in Chandigarh, the Division Bench of JB Pardiwala* and R. Mahadevan, JJ. dismissed the petitions holding that the petitioners’ assertation that no part of the cause of action arose within Chandigarh, was of no avail to them, as the law itself allows the institution of a complaint in Chandigarh. The enactment of sub-section (2)(a) of Section 142 of the N.I. Act and the Explanation thereto allows the complainant to file a complaint before the Courts within whose jurisdiction the collection branch of the bank falls….
Issues
- Whether a complaint filed under Section 138 of the N.I. Act can be ordered to be transferred from one court to the other in exercise of powers under Section 406 of the CrPC on the ground of lack of territorial jurisdiction of the Court in which the complaint is filed?
- Assuming that the Court in which the complaint filed under Section 138 of the N.I. Act lacks territorial jurisdiction to try the same, then is it permissible for this Court in exercise of powers under Section 406 of the CrPC to transfer the said complaint to the court having territorial jurisdiction to try the offence?
- Whether the expression “that for the ends of justice, this Court can transfer any criminal case or appeal to any place.” in Section 406 CrPC embraces in itself the lack of territorial jurisdiction of the court to try the offence under Section 138 N.I. Act?
Analysis and Decision
At the outset, referring to Yogesh Upadhaya v. Atlanta Limited, 2023 SCC OnLine SC 170 the Court noted that while dealing with the plea for transfer filed under Section 406 of the CrPC of six complaint cases filed under Section 138 and 142 of the N.I. Act respectively, the Court therein noted K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510, wherein it was held that an offence under Section 138 of the N.I. Act has five components:
(i) drawing of the cheque;
(ii) presentation of the cheque to the bank;
(iii) returning of the cheque unpaid by the drawee bank;
(iv) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount; and;
(v) failure of the drawer to make payment within 15 days of the receipt of the notice.
The Court also noted that it was further held that the jurisdiction to deal with the case vests in the Court having jurisdiction over the territorial limits wherein any of the five acts referred to above occurred. If the five acts were done in five different areas, then any one of the Courts exercising jurisdiction in those five areas would have jurisdiction and the complainant could choose any one of those Courts.
Noting that reliance was placed by Yogesh Upadhaya (supra) on Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129, the Court referred to same and noted that it was held that the place, situs or venue of judicial inquiry and trial of the offence must logically be restricted to where the drawee bank is located, i.e., where the cheque is dishonoured upon presentation and not where the complainant’s bank is situated.
The Court also analysed the changes that came about after the Negotiable Instruments (Amendment) Act, 2015. Additionally, the Court noted that after the amendment, Section 142(2) made it clear that 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 clarified this position by validating the transfer of pending cases to the Courts conferred with such jurisdiction after the amendment came into force.
The Court underscored that in Yogesh Upadhaya (supra), after considering Section 142(2) along with Section 142-A of the N.I. Act, it was held that two out of six complaints instituted at Nagpur were in accordance with the legal position. However, since the other four complaints also pertained to the same transaction, the Court felt that it would be advisable to have a common adjudication with a view to obviate the possibility of any contradictory findings being rendered in connection with the said complaints by different courts. In such circumstances, all the six complaints were ordered to be transferred to the South-west district Courts, Dwarka, New Delhi.
Perusing Section 406 of the CrPC and upon referring to trajectory of authorities pronounced on the provision, the Court reiterated that transfer of cases under Section 406 of the CrPC may be allowed when there is a reasonable apprehension backed by evidence that justice may not be done and mere convenience or inconvenience of the parties may not by itself be sufficient to pray for transfer. The Court has to appropriately balance the grounds raised in the facts and circumstances of each case and exercise its discretion in a circumspect manner while ordering a transfer under Section 406.
Further, the Court stated that although no rigid and inflexible rule or test could be laid down to decide whether or not the power under Section 406 of the Cr.P.C should be exercised, yet it is manifest that an order of transfer of trial is not to be passed as a matter of routine and more particularly on the plea of lack of territorial jurisdiction of the Court to try the offence under Section 138 of the N.I. Act.
“This power must be exercised cautiously and in exceptional situations, where it becomes necessary to do so to provide credibility to the trial.”
The Court also enunciated broad factors, which are not exhaustive, to be kept in mind while considering an application for transfer of the trial:
1. when it appears that the State machinery or prosecution is acting hand in glove with the accused, and there is likelihood of miscarriage of justice due to the lackadaisical attitude of the prosecution;
2. when there is material to show that the accused may influence the prosecution witnesses or cause physical harm to the complainant;
3. comparative inconvenience and hardships likely to be caused to the accused, the complainant/the prosecution and the witnesses, besides the burden to be borne by the State exchequer in making payment of travelling and other expenses of the official and non-official witnesses;
4. a communally surcharged atmosphere, indicating some proof of inability in holding a fair and impartial trial because of the accusations made and the nature of the crime committed by the accused;
5. and existence of some material from which it can be inferred that some persons are so hostile that they are interfering or are likely to interfere, either directly or indirectly, with the course of justice.
The Court also discussed the phrase ‘expedient for the ends of justice’ which finds place in Section 406 of the CrPC. The Court noted that in Yakub Abdul Razak Memon v. State of Maharashtra, (2013) 13 SCC 1 it was observed that this phrase refers to the best interest of the public within the four corners of the statute. It means preservation of proper balance between the Constitutional/statutory rights of an individual and rights of the people at large to have the law enforced. The “ends of justice” does not mean vague and indeterminate notions of justice, but justice according to the law of the land.
The Court also stated that-
“when a complainant institutes a case in a Court of his choosing and such a Court has the territorial jurisdiction to adjudicate the matter then the transfer of such case has to be guided by principles that would achieve the ends of justice. The meaning of “ends of justice” essentially refers to justice for all the parties involved in the litigation.”
On basis of the aforesaid, the Court said that Section 142 of the N.I. Act, provides the complainant with the right to lodge a complaint, before a Court, within whose jurisdiction, the branch of the bank where the cheque is delivered for collection, is situated. Therefore, the argument of the accused that another Court might also be empowered to take cognizance of the matter under Section 142, since the cause of action arose within that jurisdiction, cannot by itself be a ground for seeking transfer under Section 406 of the CrPC.
The Court conclusively held that when a cheque is delivered or issued to a person with liberty to present the cheque for collection at any branch of the bank where the payee or holder in due course, as the case may be, maintains the account then, the cheque shall be deemed to have been delivered or issued to the branch of the bank, in which, the payee or holder in due course, as the case may be, maintains the account, and the Court of the place where such cheque was presented for collection, will have the jurisdiction to entertain the complaint alleging the commission of offence punishable under Section 138 of the N.I. Act.
It was also mentioned that the word ‘delivered’ used in Section 142(2)(a) of the N.I. Act has no significance. What is of significance is the expression ‘for collection through an account’, the delivery of the cheque takes place where the cheque was issued and presentation of the cheque will be through the account of the payee or holder in due course, and the said place is decisive to determine the question of jurisdiction. In the matter at hand, the Court explained that for the purpose of transfer of any case or proceedings under Section 406 of the CrPC, the case must fall within the ambit of the expression “expedient for the ends of justice”. Mere inconvenience or hardship that the accused may have to face in travelling from Coimbatore to Chandigarh would not fall within the expression “expedient for the ends of justice”….
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