Supreme Court Doubts Verdict Which Held Mere Inconvenience Of Parties As No Ground To Transfer Criminal Case

The Supreme Court has cast doubt on its recent judgment in Shri Sendhur Agro & Oil Industries vs. Kotak Mahindra Bank Ltd which held that "mere convenience or inconvenience of the parties may not by itself be sufficient enough to pray for transfer" of a criminal case from one state to another as per Section 406 of the Code of Criminal Procedure.

A bench comprising Justice Surya Kant(as he was then) and Justice Joymalya Bagchi, in the order passed on November 18 (but uploaded today), referred the Shri Sendhur Agro & Oil Industries case to a larger bench for an authoritative and binding clarification.

The development came in a transfer petition filed by Golla Naraesh Kumar Yadav, a trader from Adoni in Andhra Pradesh, who sought the transfer of two cheque bounce cases initiated by Kotak Mahindra Bank in Chandigarh. The cheques, worth ₹3 crore and ₹6 crore,were issued as part of business dealings between the borrower and the bank's Adoni branch. However, the bank presented them for collection in Chandigarh, where the criminal cases under Section 138 of the Negotiable Instruments Act were filed upon the dishonour of the cheques.

The judgment began by describing the dispute as a classic “David versus Goliath battle”, a small-time borrower with limited means pitted against a banking giant with branches and resources across the country.

The Court noted that the borrower would be compelled to travel more than 2,000 km to Chandigarh, engage a lawyer unfamiliar to him, manage expenses, and attend proceedings conducted in a different language. Meanwhile, the bank offered no convincing reason for why the cheques were presented at its Chandigarh collection centre other than convenience. The bench noted that the bank had even instituted 476 similar cases in Chandigarh against accused persons located outside the jurisdiction, suggesting a deliberate strategy to centralise prosecutions far from borrowers' locations.

Why the Court Questioned Its Own Earlier Ruling

In Shri Sendhur Agro & Oil Industries v. Kotak Mahindra Bank (2025), a coordinate bench of the Supreme Court had held that “mere inconvenience or hardship” to the accused is not enough to justify transferring a criminal case. 

But the present bench found that this approach did not align with earlier authority, Nahar Singh Yadav v. Union of India (2011) 1 SCC 307, which explicitly recognised “comparative inconvenience and hardship” to the parties and witnesses as a valid consideration in deciding transfer petitions.

"Prayers for transfer are, therefore, not agnostic to inconvenience/hardship and ought to be tested on the scale of relative convenience/inconvenience of all stakeholders including witnesses," the judgment stated.

Moreover, the bench clarified that cheque bounce cases occupy a distinct category. These are quasi-criminal offences arising out of private financial disputes, not grave crimes against society. Because the NI Act places the burden of rebutting statutory presumptions on the accused, the location of the trial court becomes crucial to the accused's ability to marshal a meaningful defence.

Fair Trial Rights Cannot Become Illusory

The Court emphasised that although the NI Act allows complainants to file cases in jurisdictions where cheques are deposited, this statutory convenience for banks cannot be stretched to make fair trial rights illusory for borrowers. An accused's ability to secure legal representation of his choice, consult his lawyer regularly, bring witnesses, and prepare an effective defence is severely compromised when the forum is placed thousands of kilometres away.

“It is a herculean task for a petty borrower… to traverse over a thousand kilometres and access adequate legal representation in a far-off Court,” the bench observed, adding that such circumstances “adversely impact his fundamental right to adequate legal assistance.”

The Court reasoned that when parties are unequally placed,such as a financially mighty corporation vis-à-vis an individual with limited means,the justice system cannot ignore the imbalance. In such cases, giving primacy to the convenience of the complainant bank, while dismissing the severe hardship imposed on the accused, cannot be considered fair. The bench stressed that the NI Act's objective of promoting financial discipline must not come at the cost of constitutional guarantees.

"The convenience/inconvenience paradigm essentially rests on the relative status and wherewithal of parties to the lis. In the event the parties are co-equal in status and socio-economic standing, the court may be shy to transfer a case solely for the convenience of legal representation and defence of the accused, since such a shift, though welcome from the end of the accused, would cause undue hardship to the complainant. On the other hand, if the battle is between two unequal parties i.e., the complainant, a large corporation and the accused, a puny individual with limited means, a transfer of the proceedings to secure adequate legal representation to such an accused would hardly impact the giant corporation's right to access justice. It is little solace for the accused to be told that he may be represented under Section 228 BNSS (corresponding to Section 205 CrPC) through a lawyer when he is be required to travel over a thousand kilometres to engage a lawyer ordinarily practicing in such Page 13 of 16 court and have regular consultations with him for preparation of his defence. The balance of relative convenience in such cases would surely tilt in favour of the accused justifying transfer," the judgment stated.

Though the borrower had sought transfer to Adoni, the Court identified Hyderabad as a more appropriate forum for both parties. Because related SARFAESI proceedings are pending before the Debt Recovery Tribunal, Hyderabad. Also, the High Court is already hearing challenges connected to the same loan transaction. Hence, Hyderabad is more accessible to both parties and ensures consistency across related judicial processes.

The Court thus transferred the cases to the Chief Metropolitan Magistrate, Hyderabad, to be tried there until a Larger Bench settles the legal question.

"As we are differing from the view expressed in Shri Sendhur Agro & Oil Industries (supra), in consonance with the principles of judicial discipline and decorum, we consider it prudent to place the matters before the Hon'ble Chief Justice for constituting a Larger Bench to give a definitive opinion on the issue at hand," the Court observed.

Case : Golla Naraesh Kumar Yadav etc. versus Kotak Mahindra Bank

Citation : 2025 LiveLaw (SC) 1172

Click here to read the judgment