I came across a legal situation during initial days of my practice when I used to appear on behalf of a number of Non-Banking Financial Companies (NBFCs) in the courts of Delhi in cases relating to dishonor of cheques, arbitration, executions, SARFAESI etc.
One day a man, who was one of the directors in a private limited company, came to meet me and told me that a NBFC had misused his security cheques and filed fifteen cheque bounce cases against him on the basis of a single alleged agreement which were pending before five different judges of the Tis Hazari Court and he had been declared Proclaimed Offender (PO) in almost all the cases. He was too afraid of the fact that Delhi Police had traced his location and he could be arrested anytime.
I did not use to appear on behalf of that NBFC and thus accepted the brief. I started preparing for his cases and unfortunately in the meantime he was arrested by the police. When I enquired from the police officials they informed me that the arrest was made in respect of cases pending before two Metropolitan Magistrates (MM), Negotiable Instruments Act, in the Tis Hazari Court. I drafted bail applications/PO cancellation applications overnight and appeared in the morning before the concerned courts where the police officials produced my client. The offence under section 138 of the Negotiable Instruments Act, 1881 is a bailable offence and the court always directs the accused to furnish bail bonds on the first appearance. Many a times the court even accepts personal bond on the first appearance and grants time to arrange surety till the next date. The situation becomes difficult when the accused has been declared Proclaimed Offender (PO) as per section 82 of the Code of Criminal Procedure, 1973 because the accused is required to justify reasons for avoiding summons and not appearing before the court. I tried my level best to convince the courts that there existed justified grounds for non-appearance of my client.
The first court where seven cases were pending, the concerned judge got convinced and my client was not only released from the custody but was also given time of few months to arrange surety. Another court where just two cases were pending, the cases got settled. This was just a little task done. There were thirteen similar cheque bounce cases in front of us pending before four different judges in the Tis Hazari Court. For a middle class man, doing private job, it was an extremely difficult task to take leaves from the office and appear on different dates in four different courts. More difficult task was to arrange sureties to convince four different judges. My client wanted to contest these cases on a serious note which forced me to think differently because contesting similar cheque bounce cases in four different courts is really a difficult task. Section 142(2) of the Negotiable Instruments Act covers the aspect of territorial jurisdiction of courts for offences relating to dishonor of cheques.
The Negotiable Instruments (Amendment) Act, 2015, w.r.e.f. 15 June, 2015 had amended section 142 of the Act which vested jurisdiction for initiating proceedings for the offence under section 138 of the Act in the court within whose territorial jurisdiction the branch where the payee or the holder in due course maintains an account. The Supreme Court in the case of Dasrath Rupsingh Rathod vs. State of Maharashtra AIR 2014 SC 3519 had changed the concept of Territorial Jurisdiction for dishonor of cheques and limited it only to those Courts, within whose local jurisdiction the offence was committed, i.e. where the cheque is dishonored by the bank on which it is drawn. Post the judgment of the Supreme Court, in compliance of the Judgment complaints were returned by Courts to be presented before Courts with appropriate jurisdiction, thereby causing unnecessary trouble to the complainants. Therefore to do away with the confusion on jurisdiction, the Centre through the Negotiable Instruments (Amendment) Act, 2015, diluted the ruling and stipulated that if the cheque is presented for payment by the payee or holder otherwise through an account, the court within whose local jurisdiction the branch of the drawee bank where the drawer maintains the account, is situated will have the jurisdiction to try offences under section 138 of the Negotiable Instruments Act.
Section 142(2) as amended reads:
(2) 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; or
(b) if the cheque is presented for payment by the payee or holder in due course, otherwise through an account, the branch of the drawee bank where the drawer maintains the account, is situated.
Explanation. - For the purposes of clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains the account.
Section 142A was newly inserted by the Negotiable Instruments (Amendment) Act, 2015, w.r.e.f. 15 June, 2015 which provides for the validation for the transfer of cases pending in various courts of law.
Section 142A reads as under: 142A. Validation for transfer of pending cases.—
(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974) or any judgment, decree, order or direction of any court, all cases transferred to the court having jurisdiction under sub-section (2) of section 142, as amended by the Negotiable Instruments (Amendment) Ordinance, 2015 (Ord. 6 of 2015), shall be deemed to have been transferred under this Act, as if that sub-section had been in force at all material times.
(2) Notwithstanding anything contained in sub-section (2) of section 142 or sub-section (1), where the payee or the holder in due course, as the case may be, has filed a complaint against the drawer of a cheque in the court having jurisdiction under sub-section (2) of section 142 or the case has been transferred to that court under sub-section (1) and such complaint is pending in that court, all subsequent complaints arising out of section 138 against the same drawer shall be filed before the same court irrespective of whether those cheques were delivered for collection or presented for payment within the territorial jurisdiction of that court.
(3) If, on the date of the commencement of the Negotiable Instruments (Amendment) Act, 2015 (26 of 2015), more than one prosecution filed by the same payee or holder in due course, as the case may be, against the same drawer of cheques is pending before different courts, upon the said fact having been brought to the notice of the court, such court shall transfer the case to the court having jurisdiction under sub-section (2) of section 142, as amended by the Negotiable Instruments (Amendment) Ordinance, 2015 (Ord. 6 of 2015), before which the first case was filed and is pending, as if that sub-section had been in force at all material times.
Section 142A(1) gives retrospective in operation to the section 142(2) of the Negotiation Instruments Act. The words “as if that sub-section had been in force at all material times” used with reference to section 142(2), in section 142A (1) gives retrospectively to the provision. According to section 142A(1) all cases arising out of section 138 pending in any court before the Negotiable Instruments (Amendment) Ordinance, 2015 shall be transferred to the court having jurisdiction as per section 142(2) of the Act as if that subsection had been in force at all times. To decide the jurisdiction of filing the cheque bounce case, the question to be determined is not where the cheque got bounced. A cheque will always be deemed to be bounced within the territorial jurisdiction of that court where the payee or the holder in due course maintains the account or where the branch of the drawee bank where the drawer maintains the account is situated.
This provision and concept is quite settled now and most of the litigants and lawyers these days are aware about it. The problem lies with the other two sub-sections of the section 142A with respect to which there is still a lot of ignorance and unawareness. If a complainant wishes to file any subsequent complaint arising out of section 138 against the same drawer then the section 142A(2) casts an obligation on the complainant to file any such subsequent complaint before the same court where the initial complaint filed against the same drawer is pending. The word ‘shall’ used in the sub-section makes it a mandatory provision and the complainant cannot approach different courts in cheque bounce cases against the same drawer irrespective of where the subsequent cheques got bounced if a case already filed is still pending.
The intention of the legislature behind inserting section 142A becomes more clear when one reads section 142A(3) according to which on the date of the commencement of the Negotiable Instruments (Amendment) Act, 2015, if more than one case filed by the complainant against the same drawer is pending before different courts then every such subsequent court, upon the said fact having been brought to the notice, shall transfer the case(s) pending before it to the court having jurisdiction under sub-section (2) of section 142 as amended by the Negotiable Instruments (Amendment) Ordinance, 2015, before which the first case was filed and is pending. The word ‘shall’ has been used here also which makes it a mandatory provision and all the cheque bounce cases filed by a complainant against the same drawer must be adjudicated upon and tried by the same court where the first case filed is pending irrespective of where the subsequent cheques got bounced. I brought this fact to the notice of each court and requested to transfer the cases to one court. Frankly this strategy did not work at all and none of the judges paid heed to my request, maybe because the Negotiable Instruments, Courts are over-burdened in Delhi and it is difficult to seek such relief. All the cases were pending before judges of Central District, Delhi due to which I decided to approach the concerned Chief Metropolitan Magistrate (CMM) of Central District to raise the issue.
I filed transfer petition under section 410 of Cr.P.C. before the concerned CMM of the Central District, Tis Hazari Courts and notices were issued. Section 410 of Cr.P.C. empowers the Chief Metropolitan Magistrate/Chief Judicial Magistrate to withdraw or recall cases from any Magistrate subordinate to him for trial by himself or transfer to any Magistrate subordinate to him. The function of the section is primarily of an administrative nature. Before framing my arguments I sat down and imagined completely about how we would be contesting these cases if they are not transferred to one court and how the trial would take place stage wise. It did not take me much time to realize the gravity of the situation. To understand the issue in question more clearly it is pertinent to discuss here broadly various stages in a cheque bounce case once the accused appears before the court.
Framing of notice u/s 251 Cr.P.C: On appearance of the accused or when he is brought before the Magistrate, he should be apprised of the substance of the accusation and he must be asked whether he pleads guilty or has any defense to make. Some of the basic questions which are always asked from the accused are whether the cheque bears his signature, cheque was filled by him or not, notice was received or not from the complainant regarding dishonor of the cheque, any transaction as mentioned in the complaint took place or not, pleads guilty of the offence or has any defense to make etc.
Complainant Evidence (CE): The Complainant adopts his Pre Summoning Evidence (PSE) as his examination-in-chief. PSE includes original cheque, duly stamped return memo, copy of the notice along with postal receipts and track reports, affidavit in support of the complaint etc.
If there are other witnesses in support of the complainant, then their evidence also will have to be recorded. Once the accused pleads not guilty and decides to contest the case, he normally seeks an opportunity from the court to cross examination the complainant. Some courts allow it orally whereas some courts ask the accused to move an application under section 145(2) of the Negotiable Instruments Act in which the accused is required to disclose his defense to justify his demand of cross-examination. The complainant is at liberty to file reply to the said application and thereafter court allows or disallows the application after hearing arguments of both the sides. Normally courts are liberal in this aspect and grant opportunity to the accused to cross-examination the complainant. Frankly speaking, I have never come across a situation where the court has denied such opportunity to the accused in a cheque bounce case.
Statement of accused u/s 313 of Cr.P.C: This section is based on the fundamental principle of fairness. A statement under this section is recorded to give an opportunity to the accused to explain the facts and circumstances appearing against him in the evidence. No oath shall be given where the accused is examined by the court under this section.
Defense Evidence (DE): Once the statement of the accused is recorded u/s 313 Cr.P.C., court asks the accused if he wishes to lead defense evidence or not. If the accused prefers to lead defense evidence to prove his innocence, he is required to file application u/s 315 Cr.P.C., if any and list of witnesses. The application u/s 315 Cr.P.C. gives the accused the option of examining himself as a witness for the defense. The accused can also exhibit (place on record) any relevant evidence to prove his innocence under this section. The noteworthy point is that whatever the accused does u/s 315 Cr.P.C. is under oath and therefore the complainant is adduced an opportunity to cross examine him. Another important thing is that the court normally allows only those witnesses to depose which are clearly relevant for the trial. All the witnesses which are permitted by the court are examined and cross examined.
Arguments: The counsels of the complainant and the accused submit their arguments before the court. During the argument the counsel may submit the precedents of High courts and Supreme Court in support of their case. Usually, a written argument containing a gist of the oral argument is also submitted before the court.
Judgment: After the arguments, case is posted for judgment. The accused is either convicted or acquitted by the court. It is difficult to appreciate the logic behind Section 142A of the Negotiable Instruments Act without pondering over it keeping in mind the above discussed stages. Taking example of the present case, the accused will have to not only cross examine the complainant four times in four different courts but will also have to lead lengthy defense evidence four times which also implies that all the same defense witnesses will have to be examined four times in four different courts. One can imagine what a torturous and unjustified situation that would be taking into consideration the parties as well as already over-burdened courts.
The last but not the least, different courts can arrive at contradictory judgments over the same issue. If the connected and similar cases are pending before the same judge then it is quite usual to adopt the evidence of one case in another case because the cases are tried together and the concerned judge will simply ask the steno to copy-paste the evidence. But such an option is not available when the cases are pending before different judges. In the present case, although all the pending cases were similar cases based on a single alleged agreement in the same territorial jurisdiction but it is noteworthy that there is no such requirement of similarity under sec 142A of the Negotiable Instruments Act. This section clearly states that all the cheque bounce cases filed by a complainant against the same drawer must be adjudicated upon and tried by the court where the first case filed is pending irrespective of where the subsequent cheques got bounced and irrespective of whether the cases are similar or not. This means that even in situations where the cases are based on completely different facts or where the cheques got bounced in different territorial jurisdictions, the complainant cannot approach different courts in cheque bounce cases against the same drawer.
When the counsel for the NBFC appeared on the next date, I was not surprised to hear his arguments because I had been on that side always. The opposite counsel started arguing on the merits of the cases which were out rightly rejected by the CMM stating them as irrelevant in a transfer petition. When I finished my part of arguments, the CMM asked the counsel for the NBFC whether he had any objection if all the cases were to be transferred to one court. The CMM also remarked that the NBFC should have rather filed the transfer petition because in that case it would have become very convenient and efficient for them to contest all the cases against one accused. The counsel for the NBFC requested the CMM to pass the transfer order, if any, without mentioning his non-objection because he told that the company directed them to file cases in that manner to mentally harass the accused.
Finally all the hard work paid off and all the cases were transferred to the court where the first case filed was pending as per amended provisions of the Negotiable Instruments Act. I don’t know how many advocates do it but it was my first such attempt and I succeeded. I will greatly appreciate any input on the present topic.
The author can also be reached at firstname.lastname@example.org
(Vishal Sharma is an independent legal practitioner and regularly appears before various courts and tribunals in both Delhi and Haryana)
[Disclaimer: The content of the article is intended to offer a general guide to the subject matter and should not be regarded as legal advice or a legal opinion of any sort. Views contained herein are personal with interpretive value of the author. Readers are encouraged to seek specialist advice about their specific circumstances prior to acting upon any of the information provided herein.]
Tags :criminal law