Cheque bounce cases under Section 138 NI Act can be transferred from one State to another under Section 406 CrPC: Supreme Court

The Supreme Court recently ruled that its power to transfer criminal cases under Section 406 of the Code of Criminal Procedure (CrPC) remains intact in relation to cheque dishonour cases under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). [Yogesh Upadhyay and Another v. Atlanta Limited].A division bench of Justices Dinesh Maheshwari and Sanjay Kumar rejected a contention that it would be impermissible for the Court to transfer such cases on account of a non-obstante clause in Section 142(1) of the NI Act overriding Section 406, CrPC."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," the Court observed..By way of background, the petitioners, comprising of an individual and his proprietary concern, were facing a total of six cheque-bounce cases. Two of these cases were filed in Nagpur, Maharashtra while the remaining four were in Delhi. The petitioner had moved the Supreme Court with a plea to transfer the cases filed in Nagpur to Delhi, so that all the cases may be heard together in Delhi. The petitioners contended that all the cheques under scrutiny relate to the same transaction. Hence, it was argued that it would be proper that the cases pertaining to the dishonour of such cheques be tried and decided together.The company that had filed the cases against the petitioner, however, countered that Section 142 of the NI Act was a non-obstante clause that conferred exclusive jurisdiction on the court having jurisdiction over the area where the payee or holder in due course maintains a bank account. Thus, it was contended that the Nagpur court had exclusive jurisdiction to deal with the two cases filed in Nagpur. Pertinently, the company also asserted that the non-obstante clause in Section 142, NI Act would override the power to transfer cases under Section 406 of CrPC. Therefore, it was argued that the Nagpur cases could not be transferred to Delhi. .The Supreme Court opined that the argument on the non-obstante clause in Section 142 of NI Act overriding Section 406 of CrPC cannot be accepted."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," the Court explained..The 'notwithstanding' clause under Section 142 of the NI Act has to be read and understood in the context and for the purpose it is used, the Court said. This clause does not lend itself to the interpretation that Section 406, CrPC would stand excluded vis-à-vis offences under Section 138 of the NI Act, the bench held. "The power of this 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 the Act of 1881," the judgment stated..The Court proceeded to agree with the petitioners that it would be convenient for the parties if all six cases were tried together in Delhi since the cheques in question concerned the same transaction. A common adjudication would obviate the possibility of there being contradictory findings being rendered in different courts, the Court noted. In view of the above, it allowed the petitioners' plea to transfer the cases filed in Nagpur to Delhi so that all six cases filed against the petitioner may be tried together in Delhi. .Advocate Rajmangal Kumar appeared for the petitioners. Advocate Chirag M Shroff appeared for the respondent..[Read Judgment]