Supreme Court judgment related to transfer petitions,primarily seeking to transfer a criminal case for cheque dishonour (under Section 138 of the Negotiable Instruments Act, or N.I. Act) from Chandigarh to Coimbatore. The petitioner argues that the entire transaction and the cause of action arose in Coimbatore, while the bank asserts that its collection account in Chandigarh provides the court with jurisdiction. The Judgment examines the powers of the Supreme Court to transfer cases under Section 406 of the Code of Criminal Procedure, 1973 (Cr.P.C.), particularly in the context of the N.I. Act’s provisions regarding territorial jurisdiction (Sections 142 and 142A). It analyzes previous judicial precedents to determine when a transfer is “expedient for the ends of justice,” weighing factors beyond mere convenience, such as the location where the offense was committed and the legislative intent behind jurisdictional amendments.
(A) Criminal Procedure Code, 1973, Section 406 – Negotiable Instruments Act, 1881, Section 138 – Dishonour of Cheque – Transfer of criminal case – Whether a complaint filed under Section 138 of the N.I. Act can be ordered to be transferred from one court to the other in exercise of powers under Section 406 of the Cr.P.C. on the ground of lack of territorial jurisdiction of the court in which the complaint is filed? – Interstate transfer of case from the court of Judicial Magistrate Ist Class, Chandigarh (UT) to the court of Metropolitan Magistrate, Coimbatore, Tamil Nadu, essentially on the ground that no cause of action could be said to have arose for the bank to lodge the complaint for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 in Chandigarh – Held that although no rigid and inflexible rule or test could be laid down to decide whether or not the power under Section 406 Cr.P.C should be exercised, yet it is manifest from a bare reading of sub-sections (2) and (3) of the said section and on an analysis of the decisions of this Court that an order of transfer of trial is not to be passed as a matter of routine and more particularly on the plea of lack of territorial jurisdiction of the court to try the offence under Section 138 of the N.I. Act – This power has to be exercised cautiously and in exceptional situations, where it becomes necessary to do so to provide credibility to the trial – Some of the broad factors which could be kept in mind while considering an application for transfer of the trial are:
(i) when it appears that the State machinery or prosecution is acting hand in glove with the accused, and there is likelihood of miscarriage of justice due to the lackadaisical attitude of the prosecution;
(ii) when there is material to show that the accused may influence the prosecution witnesses or cause physical harm to the complainant;
(iii)comparative inconvenience and hardships likely to be caused to the accused, the complainant/the prosecution and the witnesses, besides the burden to be borne by the State exchequer in making payment of travelling and other expenses of the official and non-official witnesses;
(iv) a communally surcharged atmosphere, indicating some proof of inability in holding a fair and impartial trial because of the accusations made and the nature of the crime committed by the accused; and
(v) existence of some material from which it can be inferred that some persons are so hostile that they are interfering or are likely to interfere, either directly or indirectly, with the course of justice. [See: Nahar Singh Yadav & Anr. v. Union of India & Ors., (2011) 1 SCC 307]
The above-mentioned factors are not exhaustive in nature and are illustrative of the requirements of a fair trial – It is clear as a noon day that ensuring a fair trial is the predominant consideration for a court to rule on a motion for transfer of a case.
(Para 49 and 50)
(B) Criminal Procedure Code, 1973, Section 406 – Negotiable Instruments Act, 1881, Section 138 and 142 – Transfer of criminal case – Territorial jurisdiction – Held that when a complainant institutes a case in a court of his choosing and such a court has the territorial jurisdiction to adjudicate the matter then the transfer of such case has to be guided by principles that would achieve the ends of justice – The meaning of “ends of justice” essentially refers to justice for all the parties involved in the litigation – Section 142 of the N.I. Act in clear terms, provides the complainant with the right to lodge a complaint, before a court, within whose jurisdiction, the branch of the bank where the cheque is delivered for collection, is situated – Therefore, the argument of the accused that another court might also be empowered to take cognizance of the matter under Section 142, since the cause of action arose within that jurisdiction, cannot by itself be a ground for seeking transfer under Section 406 of the Cr.P.C.
(Para 54 and 55)
(C) Negotiable Instruments Act, 1881, Section 138 and 142)2)(a) – Dishonour of cheque Complaint – Territorial jurisdiction – A conjoint reading of Section 142(2)(a) along with the explanation thereof, makes the position emphatically clear that, when a cheque is delivered or issued to a person withliberty to present the cheque for collection at any branch of the bank where the payee or holder in due course, as the case may be, maintains the account then, the cheque shall be deemed to have been delivered or issued to the branch of the bank, in which, the payee or holder in due course, as the case may be, maintains the account, and the court of the place where such cheque was presented for collection, will have the jurisdiction to entertain the complaint alleging the commission of offence punishable under Section 138 of the N.I. Act – In that view of the position of law, the word ‘delivered’ used in Section 142(2)(a) of the N.I. Act has no significance – What is of significance is the expression ‘for collection through an account’ – That is to say, delivery of the cheque takes place where the cheque was issued and presentation of the cheque will be through the account of the payee or holder in due course, and the said place is decisive to determine the question of jurisdiction.
(Para 62)
(D) Criminal Procedure Code, 1973, Section 406 – Negotiable Instruments Act, 1881, Section 138 and 142(q)(a) – Transfer of criminal case – Territorial jurisdiction – Strong assertion on the part of the petitioner that no part of the cause of action could be said to have arisen within Chandigarh, is of no avail to them, more particularly when the law itself allows the institution of a complaint in Chandigarh – The enactment of sub-section (2)(a) of Section 142 of the N.I. Act and the Explanation thereto allows the complainant to file a complaint before the courts within whose jurisdiction the collection branch of the bank falls – In the present case, while contending that the court in Chandigarh lack the jurisdiction to entertain the case, it is not the case of the petitioner that the respondent Bank has no collection branch in Chandigarh – The argument canvassed on behalf of the petitioner that although the Court in Chandigarh has the territorial jurisdiction to try the case under Section 138 of the N.I. Act yet as the Court in Delhi also has the territorial jurisdiction to try the case, the proceedings deserve to be transferred to the Court in Delhi to take care of two situations for the petitioner (i) language barrier and (ii) convenience – Held that for the purpose of transfer of any case or proceedings under Section 406 of the Cr.P.C., the case must fall within the ambit of the expression “expedient for the ends of justice” – Mere inconvenience or hardship that the accused may have to face in travelling from Coimbatore to Chandigarh would not fall within the expression “expedient for the ends of justice” – The case must fall within any of the five situations as narrated in para 49 of this judgment – It is always open for the petitioner accused to pray for exemption from personal appearance or request the Court that he may be permitted to join the proceedings online – Held that no case is made out for transfer of the proceedings in question under 406 CrPC.
(Para 63 to 66)
M/S Shri Sendhuragro And Oil Industries V. Kotak Mahindra Bank Ltd.
Supreme Court: 2025 INSC 328: (DoJ 06-03-2025)
