Jurisdiction of Courts u/s 142 of NI Act to try cheque bounce cases clarified by Supreme Court of India

ITEM NO.7 Court 9SECTION XVI A S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Transfer PetitionNo.2720 M S HIMALAYA SELF FARMING GROUP & ANR. Petitioner(s VERSUS M S GOYAL FEED SUPPLIERS Respondent(s FOR ADMISSION and IA No.89281 2020 STAY APPLICATION and IA No.89282 2020 EXEMPTION FROM FILING O.T. Date : 16 09 2020 This petition was called on for hearing today CORAM : HON BLE MR. JUSTICE V. RAMASUBRAMANIAN Mr. Rahul Kaushik Adv. Ms. Bhuvneshwari Pathak AOR Ms. Shilpi Satyapriya Satyam Adv. Mr. Alok Pandey Adv. UPON hearing the counsel the Court made the following O R D E R The petitioners have filed the above Transfer Petition seeking transfer of the proceedings filed by the respondent under Section 138 of the Negotiable Instrument Act pending on the file of Additional Chief Judicial Magistrate Agra Uttar Pradesh to the competent Court at Siliguri Darjeeling West It is contended by the learned counsel for the petitioners that the proceedings are liable to be transferred to Siliguri for three reasons namely that under the delivery challan all disputes between the parties are made subject to the jurisdiction of courts in Siliguri that the petitioners have already lodged a criminal complaint on 29.05.2017 about the offences committed by the respondent and during the pendency of the criminal complaint the present proceedings have been initiated on 27.10.2018 and that when the respondent has its Head Office in Siliguri there was no reason to lodge the complaint at Agra except to harass the I am not convinced about any of these reasons. If the delivery challan which states that all disputes will be subject to the jurisdiction of courts in Siliguri is construed by the petitioners to constitute a bar for the courts in any other jurisdiction to entertain the proceedings it is always open to the petitioners to raise this point before the Agra Court. This cannot be a ground for seeking The fact that the petitioners have made a prior complaint to the police about the loss that he sustained on account of the poor quality of feed supplied by the respondent herein cannot be a ground to seek the transfer of the proceedings under Section 138. The fact that the respondent has its Head Office at Siliguri and that there is no reason why it chose to file a complaint in Agra except to harass the petitioners cannot also be a ground for seeking transfer. Under Section 142(2)(a of the Negotiable Instrument Act the court within whose jurisdiction the branch of the bank where the payee maintains the account is situated will have jurisdiction to try the offence if the cheque is delivered for collection through an account. Therefore all the grounds on which the petitioners seek transfer are unsustainable. The Transfer Petition is therefore dismissed. Pending application(s) if any stands disposed of ASHWANI KUMAR) (KAMLESH RAWAT AR CUM PS COURT MASTER (NSH

Summary: The Hon’ble Supreme Court of India in M/S Himalaya Self Farming Group Vs. M/S Goyal Feed Suppliers [Transfer Petition Criminal No. 273 of 2020] held that the court within whose jurisdiction the branch of the bank where payee maintains the account is situated, will have jurisdiction to try the offence under the Negotiable Instruments Act, 1881, (“Act”) if the cheque is delivered for collection through an account.   Background:  The petitioner approached the court by filing a petition u/s 406 of CrPC contending that under the delivery challan all disputes between the parties will be subjected to the jurisdiction of Silliguri and there was no reason to lodge complaint in agra other than the ulterior motive to harass the petitioner.   Relevant Provisions:
 Through the Negotiable Instruments Amendment Act, 2015, Section 142 of the act was amended to introduce the following provision – “(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.”   Held/Observation –  The bench headed by Hon’ble Justice V. Ramasubramanian , while examining a Transfer Petition observed that, “If the delivery challan which states that all disputes will be subject to the jurisdiction of courts in Siliguri, is construed by the petitioners to constitute a bar for the courts in any other jurisdiction to entertain the proceedings, it is always open to the petitioners to raise this point before the Agra Court. This cannot be a ground for seeking transfer.” It was further observed by the Hon’ble Apex Court that “The fact that the petitioners have made a prior complaint to the police about the loss that he sustained on account of the poor quality of feed supplied by the respondent herein cannot be a ground to seek the transfer of the proceedings under Section 138.”