Prayer before Hon’ble Supreme court
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 & Anr.’, 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’].
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Though the offence is complete when cheque dishonours but it is postponed till the demand notice period is being completed
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.
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After quoting “K. Bhaskaran Vs. Sankaran Vaidhyan Balan and another [(1999) 7 SCC 510] and Dashrath Rupsingh Rathod Vs. State of Maharashtra and another [(2014) 9 SCC 129]” judgments, Hon’ble Apex Court has held as follows:
8. In this regard, it may be noted that Section 142 of the Act of 1881, titled ‘Cognizance of Offences’, provided that, notwithstanding anything contained in the Code of Criminal Procedure, 1973, no Court shall take cognizance of an offence punishable under Section 138 except on a complaint in writing made by the payee or, as the case may be, the holder in due course of the cheque; such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to Section 138; and no Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the First Class shall try an offence punishable under Section 138.
9. Significantly, the afore-stated original Section 142 of the Act of 1881 was renumbered as Section 142(1) when amendments were made in the Act of 1881 by the Negotiable Instruments (Amendment) Act, 2015 (Act 26 of 2015). Further, Section 142(2) was inserted in the statute book along with Section 142-A. The newly inserted Section 142(2), to the extent relevant, states that the offence under Section 138 shall be inquired into and tried only by a Court within whose local jurisdiction – (a) if the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated.
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ANSWERED: 13. Therefore, institution of the first two complaint cases before the Courts at Nagpur is in keeping with the legal position obtaining now. However, the contention that the non obstante clause in Section 142(1) of the Act of 1881 would override Section 406 Cr.P.C. and that it would not be permissible for this Court to transfer the said complaint cases, in exercise of power thereunder, cannot be countenanced. It may be noted that the non obstante clause was there in the original Section 142 itself and was not introduced by way of the amendments in the year 2015, along with Section 142(2). 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 clause, therefore, has to be read and understood in the context and for the purpose it is used and it does not lend itself to the interpretation that Section 406 Cr.P.C. would stand excluded vis-à-vis offences under Section 138 of the Act of 1881. 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. It may be noted that this Court exercised power under Section 406 Cr.P.C. in relation to offences under Section 138 of the Act of 1881 even during the time the original Section 142 held the field. In A.E. Premanand Vs. Escorts Finance Ltd. & Others [(2004) 13 SCC 527], this Court took note of the fact that the offences therein, under Section 138 of the Act of 1881, had arisen out of one single transaction and found it appropriate and in the interest of justice that all such cases should be tried in one Court. We, therefore, hold that, 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.
PARTY: YOGESH UPADHYAY AND ANR vs. ATLANTA LIMITED – TRANSFER PETITION (CRIMINAL) NOs. 526-527 OF 2022 – FEBRUARY 21, 2023.
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