Cheque Cases May Be Moved From One State To Another Using Section 406 of the Criminal Procedure Code: Supreme Court

CAUSE TITLE:

YOGESH UPADHYAY AND ANR VS. ATLANTA LIMITED 

DATE OF ORDER:  

21-02-2023

JUDGE(S):

Dinesh Maheshwari, Sanjay Kumar

PARTIES:

Petitioner:YogeshUpadhyay 

Respondent:Atlanta Limited 

SUBJECT

According to the Supreme Court, it is permitted by Section 406 of the Criminal Procedure Code to transfer check cases from one state to another.

The bench of Justices Dinesh Maheshwari and Sanjay Kumar noted that, despite the non-obstante provision in Section 142(1) of the NI Act, this Court retains the authority to transfer criminal cases under Section 406 Cr.P.C. about offenses under Section 138 of the Act of 1881 if it is deemed necessary for the ends of justice.

BRIEF FACTS 

• Atlanta Limited, the respondent in this matter, filed six complaint proceedings against the petitioners by Sections 138 and 142 of the Negotiable Instruments Act of 1881.
• The six checks that are the focus of these complaint cases were written by the petitioners in connection with the acquisition of a crusher plant made by NAWA from the respondent firm for a total of.1,88,80,000/- under an agreement dated 04.06.2019. This purchase price had to be paid in seven separate cheque payments. The respondent corporation duly honored the petitioners' first check, which they had written for the amount of $11,80,000.
• But, the remaining six checks were rejected due to "Stop payment" instructions. The respondent company provided the first two dishonored checks through its bank in Nagpur, Maharashtra. Thus, the first two complaint cases were submitted to the Nagpur, Maharashtra, courts. The respondent company then produced the remaining four checks through its bank in New Delhi, and as a result, the complaint cases were brought before the Dwarka Courts in New Delhi.

QUESTIONS RAISED 

Is Section 406 Crpc applicable to offenses under Section 138 of the Act of 1881?

ARGUMENTS ADVANCED BY THE APPELLANT

• The petitioners' knowledgeable attorney will argue that since all of the checks are related to the same transaction, it is lawful and appropriate that the instances involving their dishonor are tried and decided simultaneously. To prove his point, he would cite legal precedent.

ARGUMENTS ADVANCED BY THE RESPONDENT

• Given the nonstate clause in Section 142 of the Act of 1881, the counsel for the respondent corporation would argue that the two cases brought in Nagpur, Maharashtra, cannot be transferred because they conflict with Section 406 of the Cr.P.C. In addition, He would contend that, about the first two complaint instances, Section 142(2) of the Act of 1881 grants the Courts in Nagpur sole authority. He would also rely on legal precedent.

ANALYSIS BY THE COURT

The court pointed out that Section 142(2) of the Act's use of the phrase "shall be inquired into and tried only by a Court within whose local jurisdiction..." is relevant to the ruling in Dashrath Rupsingh Rathod v. State of Maharashtra and another [(2014) 9 SCC 129], which held that the court with jurisdiction over the drawee bank, not the complainant's bank, had territorial jurisdiction to try an offense under Section 138 of the Act 

It should be emphasized that the non-obstante clause was there in the original Section 142 itself and was not added as a result of Section 142's revisions in 2015 (2). The aforementioned clause merely refers to how offenses under Section 138 of the Act of 1881 are to be recognized, as a deviation from the standard procedure is required because the prosecution for the aforementioned offense is postponed even though the commission of the offense was complete upon dishonor of the check.

As a result, the provision must be read and understood in the context and for the intended purpose, and it does not lend itself to the assumption that Section 406 Crpc would be excluded about offenses under Section 138 of the Act of 1881. In regards to offenses under Section 138 of the Act of 1881, this Court's ability to transfer ongoing criminal proceedings under Section 406 Cr.P.C. is not affected. Upon this observation, the bench granted the Transfer Petition.

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