Summary
A Coimbatore borrower sought transfer under Section 406 CrPC of a cheque-dishonour complaint that the lender bank had filed at Chandigarh, where its collection account was located, although the loan, security and SARFAESI proceedings were all in Tamil Nadu. The Supreme Court dismissed the batch of transfer petitions, holding that Section 142(2)(a) of the Negotiable Instruments Act read with its Explanation permits a complaint wherever the cheque is delivered for collection through the payee's account, that the availability of another competent court or the accused's inconvenience, distance or language difficulty does not make transfer 'expedient for the ends of justice', and that a plea of lack of territorial jurisdiction must be raised before the trial court and decided on evidence, not by transfer.
Issues
- Whether a complaint under Section 138 of the Negotiable Instruments Act can be transferred under Section 406 CrPC on the ground that the court in which it was filed lacks territorial jurisdiction.
- Whether, assuming the trial court lacks territorial jurisdiction, the Supreme Court can under Section 406 CrPC transfer the complaint to the court having jurisdiction, and whether the expression 'expedient for the ends of justice' embraces such lack of jurisdiction.
- Which court has jurisdiction over a Section 138 complaint after the insertion of Section 142(2) and Section 142-A by the Negotiable Instruments (Amendment) Act, 2015, and whether the complainant bank could file at the place of its collection branch though the whole transaction occurred elsewhere.
- Whether the accused's inconvenience in travelling, unfamiliarity with the local language, or the pendency of related proceedings in another State justify transfer of a Section 138 complaint.
Provisions considered
- Section 406, Code of Criminal Procedure, 1973Only the Supreme Court may transfer a case from a court subordinate to one High Court to a court subordinate to another, and only where 'expedient for the ends of justice'. The power is discretionary, construed strictly and exercised sparingly in exceptional situations where a reasonable apprehension backed by material shows that justice will not be done; mere convenience or inconvenience of a party is not enough (Bhiaru Ram, Nahar Singh Yadav, Rajkumar Sabu, Amarinder Singh, Maneka Sanjay Gandhi). Illustrative factors: prosecution acting hand in glove with the accused, threat to witnesses, comparative hardship, a communally surcharged atmosphere, hostile interference with justice. (¶¶ 28, 29, 30, 31, 44, 45, 46, 47, 48, 49, 50, 52, 65)
- Section 142(2)(a) and Explanation, Negotiable Instruments Act, 1881Inserted by the 2015 amendment to undo Dashrath Rupsingh Rathod, the clause confines trial of a Section 138 offence to the court within whose jurisdiction the branch of the bank where the payee maintains the account is situated; the Explanation deems a cheque delivered for collection at any branch of the payee's bank to be delivered to the branch where the payee's account is kept. The word 'delivered' is of no significance; collection through the payee's account, and the place of such presentation, is decisive. The bank's collection branch being in Chandigarh, the complaint was validly filed there though the whole transaction took place in Coimbatore. (¶¶ 13, 21, 22, 23, 55, 58, 60, 61, 62, 63)
- Section 142(1), Negotiable Instruments Act, 1881The non obstante clause, present since the original Section 142, relates only to the manner of taking cognizance of a Section 138 offence and does not exclude the Supreme Court's power of transfer under Section 406 CrPC (Yogesh Upadhyay v. Atlanta Ltd.). (¶¶ 17, 24, 25, 26)
- Section 142-A, Negotiable Instruments Act, 1881Validates transfers of pending cases to courts having jurisdiction under Section 142(2) and requires all subsequent complaints by the same payee against the same drawer to be filed in the court where the first complaint is pending; the Court noted that the provision clarifies the jurisdictional position after the 2015 amendment, and the bank had filed all its complaints at Chandigarh. (¶¶ 14, 22, 27, 60)
- Section 138, Negotiable Instruments Act, 1881Set out as the offence in question; per K. Bhaskaran it has five components (drawing, presentation, return unpaid, demand notice and failure to pay within fifteen days), and the Court traced how jurisdiction moved from any of those places (Bhaskaran) to the drawee bank (Dashrath Rupsingh Rathod) and then, by the 2015 amendment, to the payee's collecting bank. (¶¶ 12, 18, 19, 20, 21, 22)
- Sections 177 to 184, 201, 461(l) and 462, Code of Criminal Procedure, 1973Following Kaushik Chatterjee v. State of Haryana, the Court reiterated that territorial jurisdiction in criminal cases is governed by Sections 177 to 184 and depends on facts established by evidence; a Magistrate may return a complaint under Section 201 only before cognizance; proceedings of a Magistrate not empowered to try an offender are void under Section 461(l), while trial in a wrong local area is saved by Section 462 absent failure of justice. Objections to territorial jurisdiction must therefore be raised before and decided by the trial court, and transfer cannot be ordered on that ground before evidence is led. (¶¶ 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 57)
Held
- A transfer under Section 406 CrPC presupposes that the transferor court has jurisdiction; the issue of territorial jurisdiction of a criminal court depends on facts established through evidence under Sections 177 to 184 CrPC and has to be raised before the trial court, which is bound to decide it. The Supreme Court cannot order transfer of a Section 138 complaint on the ground of lack of territorial jurisdiction before evidence is marshalled. (¶¶ 32, 33, 42, 49, 57)
- Under Section 142(2)(a) and its Explanation a Section 138 complaint may be filed before the court within whose jurisdiction the branch of the payee's bank where the cheque is delivered for collection through the payee's account is situated; delivery of the cheque at any branch is deemed delivery to the branch where the payee maintains the account. The complainant's right to lodge the complaint at the collection branch is conferred by the statute, so the fact that another court might also have jurisdiction because the cause of action arose there cannot by itself ground a transfer. (¶¶ 55, 60, 61, 62, 63)
- The non obstante clause in Section 142(1) of the N.I. Act does not abrogate the Supreme Court's power under Section 406 CrPC to transfer Section 138 complaints where expedient for the ends of justice, as held in Yogesh Upadhyay; that decision transferred six complaints arising from one transaction to a single court to avoid contradictory findings. (¶¶ 17, 24, 25, 26, 27)
- Transfer under Section 406 is not to be ordered as a matter of routine, least of all on a plea of lack of territorial jurisdiction in a Section 138 case; it requires a reasonable apprehension backed by material that justice will not be done, and is reserved for exceptional situations such as the prosecution acting in collusion with the accused, likelihood of witnesses being influenced or the complainant harmed, comparative hardship to parties and witnesses and burden on the exchequer, a communally surcharged atmosphere, or hostile interference with the course of justice. The predominant consideration is assurance of a fair trial, and the complainant ordinarily has the right to choose any court having jurisdiction. (¶¶ 31, 47, 49, 50, 51)
- 'Ends of justice' means justice to all parties according to law, not vague notions of justice; where a complainant files in a court of his choosing that has territorial jurisdiction, transfer must be guided by principles achieving justice for all parties. The venue of trial is primarily determined by the averments in the complaint unless positively disproved. (¶¶ 52, 53, 54, 57)
- Mere inconvenience or hardship to the accused in travelling from Coimbatore to Chandigarh, or a language barrier, does not fall within 'expedient for the ends of justice'; the accused may seek exemption from personal appearance or permission to join the proceedings online. (¶¶ 64, 65)
Result
Transfer petitions dismissed; no case made out under Section 406 CrPC for transferring the Section 138 complaint pending before the Judicial Magistrate First Class, Chandigarh; all connected transfer petitions disposed of in the same terms; pending applications disposed of.