YOGESH UPADHYAY AND ANR. VS. ATLANTA LIMITED

YOGESH UPADHYAY AND ANR. VS. ATLANTA LIMITED

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

 REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL ORIGINAL JURISDICTION

TRANSFER PETITION (CRIMINAL) NOs. 526-527 OF 2022

YOGESH UPADHYAY AND ANR. ……...PETITIONER(S)

VS.

ATLANTA LIMITED …...RESPONDENT(S)

J U D G M E N T

SANJAY KUMAR, J.

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

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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’].

2. The six cheques, which are the subject-matter of

these complaint cases, were issued by the petitioners

in connection with purchase of a NAWA-make crusher

plant from the respondent company for a sum of

₹.1,88,80,000/-, under Agreement dated 04.06.2019.

This sale consideration was to be paid in seven

installments by way of cheques. The first cheque

issued by the petitioners for a sum of .11,80,000/- ₹

was duly honoured upon presentation by the respondent

company. The remaining six cheques, however, were

dishonoured on the strength of ‘Stop payment’

instructions. The first two cheques that came to be

dishonoured were presented by the respondent company

through its bank at Nagpur, Maharashtra. The first two

complaint cases were accordingly filed before the

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Courts at Nagpur, Maharashtra. The remaining four

cheques were thereafter presented by the respondent

company through its bank at New Delhi and in

consequence, those complaint cases were filed before

the Dwarka Courts, New Delhi.

3. Mr. Rajmangal Kumar, learned counsel, appearing

for the petitioners, would contend that as all the

cheques relate to the same transaction, it would be

proper and appropriate that the cases pertaining to

their dishonour are tried and decided together. He

would rely on case law to support his contention.

4. On the other hand, Mr. Chirag M. Shroff, learned

counsel for the respondent company, would contend that

Section 142 of the Act of 1881 would override Section

406 Cr.P.C., in view of the non obstante clause

therein, and that the two cases filed at Nagpur,

Maharashtra, therefore cannot be transferred. Further,

he would assert that Section 142(2) of the Act of 1881

confers exclusive jurisdiction upon the Courts at

Nagpur in so far as the first two complaint cases are

concerned. He would also place reliance on case law.

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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.

6. In K. Bhaskaran Vs. Sankaran Vaidhyan Balan and

another [(1999) 7 SCC 510], this Court held that an

offence under Section 138 of the Act of 1881 has five

components: (1) drawing of the cheque,

(2) presentation of the cheque to the bank,

(3) returning of the cheque unpaid by the drawee bank,

(4) giving notice in writing to the drawer of the

cheque demanding payment of the cheque amount, and

(5) failure of the drawer to make payment within 15

days of the receipt of the notice. It was further held

that the Courts having jurisdiction over the

territorial limits wherein any of the five acts, that

constitute the components of the offence, occurred

would have the jurisdiction to deal with the case and

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if the five acts were done in five different areas,

any one of the Courts exercising jurisdiction in those

five areas would have jurisdiction and the complainant

could choose any one of those Courts.

7. Thereafter, in Dashrath Rupsingh Rathod Vs. State

of Maharashtra and another [(2014) 9 SCC 129],

a 3-Judges Bench of this Court observed that the

return of the cheque by the drawee bank would alone

constitute commission of the offence under Section 138

of the Act of 1881 and would indicate the place where

the offence is committed. It was, therefore, held that

the place, situs or venue of judicial inquiry and

trial of the offence must logically be restricted to

where the drawee bank is located, i.e., where the

cheque is dishonoured upon presentation and not where

the complainant’s bank is situated.

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

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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 aforestated 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.

10. This being the statutory scheme, stress is laid

by Mr. Chirag M. Shroff, learned counsel, upon the

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words: ‘shall be inquired into and tried only by a

Court within whose local jurisdiction……’in Section

142(2) to contend that the Courts at Nagpur would have

exclusive jurisdiction in relation to the dishonoured

cheques presented by the respondent company through

its bank at Nagpur.

11. Perusal of the Statement of Objects and Reasons

in Amendment Act 26 of 2015 makes it amply clear that

insertion of Sections 142(2) and 142-A in the Act of

1881 was a direct consequence of the judgment of this

Court in Dashrath Rupsingh Rathod (supra). Therefore,

the use of the phrase: ‘shall be inquired into and

tried only by a Court within whose local

jurisdiction……’in Section 142(2) of the Act 1881 is

contextual to the ratio laid down in Dashrath Rupsingh

Rathod (supra) to the contrary, whereby territorial

jurisdiction to try an offence under Section 138 of

the Act of 1881 vested in the Court having

jurisdiction over the drawee bank and not the

complainant’s bank where he had presented the cheque.

Section 142(2) now makes it clear that the

jurisdiction to try such an offence would vest only in

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the Court within whose jurisdiction the branch of the

Bank where the cheque was delivered for collection,

through the account of the payee or holder in due

course, is situated. The newly inserted Section 142-A

further clarifies this position by validating the

transfer of pending cases to the Courts conferred with

such jurisdiction after the amendment.

12. The later decision of this Court in Bridgestone

India Private Limited Vs. Inderpal Singh [(2016) 2 SCC

75] affirmed the legal position obtaining after the

amendment of the Act of 1881 and endorsed that Section

142(2)(a) of the Act of 1881 vests jurisdiction for

initiating proceedings for an offence under Section

138 in the Court where the cheque is delivered for

collection, i.e., through an account in the branch of

the bank where the payee or holder in due course

maintains an account. This Court also affirmed that

Dashrath Rupsingh Rathod (supra) would not non-suit

the company in so far as territorial jurisdiction for

initiating proceedings under Section 138 of the Act of

1881 was concerned.

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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

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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.

14. In the case on hand, as the six complaint cases

pertain to the same transaction, it would be advisable

to have a common adjudication to obviate the

possibility of contradictory findings being rendered

in connection therewith by different Courts. As four

of the six cases have been filed by the respondent

company before the Dwarka Courts at New Delhi and only

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two such cases are pending before the Courts at

Nagpur, Maharashtra, it would be convenient and in the

interest of all concerned, including the parties and

their witnesses, that the cases be transferred to the

Dwarka Courts at New Delhi.

15. The transfer petitions are accordingly allowed

and SCC Nos.25668/2019 and 26875/2019, both titled

‘Atlanta Limited Vs. M/s Shakti Buildcon & Anr.’,

pending on the files of the learned 22nd Jt. Civil

Judge, Senior Division, Nagpur; and the learned 20th

Civil Judge, Senior Division, Nagpur, respectively,

are transferred 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.

……………………………………….J

[DINESH MAHESHWARI]

………………………………………...J

[SANJAY KUMAR]

NEW DELHI;

FEBRUARY 21, 2023.

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