Can SC Transfer Cheque Dishonour Case To Jurisdiction Where Drawer's Bak Is Situated Despite S.142A NI Act? Supreme Court To Consider

The Supreme Court on Wednesday (April 24) decided to implead the Union of India as a party to the proceedings that involve the interpretation and consideration of consequences of the amendment made to Section 142A of the Negotiable Instruments Act.“Taking note of the fact that issue involved requires interpretation and also consideration of consequence of the amendment made to Section 142A of the Negotiable Instruments Act, we are of the considered view that Union of India is to be made a party to these proceedings.”, the bench comprising Justices CT Ravikumar and Aravind Kumar said.The issue before the Supreme Court is "whether after the Negotiable Instruments (Amendment) Act 26 of 2015 which creates specific territorial jurisdiction over the branch of the bank where the "payee" or "holder" in due course maintains a bank account, can the Supreme Court exercise powers under Section 406 Cr.P.C. read with Order XXXIX of the Supreme Court Rules, 2013 to transfer a complaint to the jurisdiction of a Court where the drawer's bank is situated when it is specifically barred by the amended NI Act?"Considering the issue to be important which requires the stand of the Union Of India, the Court suo motu impleaded the Union of India, represented by the Ministry of Finance (Department of Financial Services) and the Ministry of Law and Justice (Legislative Department) and requested the Attorney General for India to address the matter.In the Dasrath Rupsingh Rathod v State of Maharashtra(2014) case, a three-judge Bench of the Supreme Court held that a complaint for the dishonor of a cheque can be filed only in the Court within whose local jurisdiction where the cheque is dishonoured by the bank on which it is drawn. The Court overruled the previous judgments which held that such a complaint could be filed in any of the jurisdictions where the cheque was drawn, the cheque was presented, the cheque was dishonored, notice was sent and notice was received.In compliance with the Supreme Court's ruling in Dasrath Rupsingh Rathod, the trial courts started returning the complaints to be filed at jurisdictions where the dishonor took place. To resolve the confusion surrounding jurisdiction, the Union Government brought an amendment in 2015. The Negotiable Instruments (Amendment) Act 2015, added Section 142(2) to the NI Act stating that "the offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction the bank branch of the payee, where the payee presents the cheque for payment, is situated."Section 142A was added to the Act to mandate the transfer of all pending complaints to courts having jurisdiction as per Section 142(2).2015 Amendment To Section 142A Violates Articles 14 and 21 of the Constitution As It Impacts Access To Justice, Says Amicus Curiae.Senior Advocate Mr. Siddharth Luthra who was appointed Amicus-Curiae in the matter by the Court submitted that the 2015 amendment to Section 142A of the NI Act violates Articles 14 & 21 of the constitution as it won't provide equal access to justice to the drawer of the cheque (accused) to defend himself without any hardship which is against his right to get a fair trial.Mr. Luthra argued that Parliament had passed a one-sided amendment to the Act without considering the right of the accused person to access to justice as the legislation provided easy access to justice to the payee/holder of the cheque (complainant) to file a complaint before the court where the payee maintains the bank account, and developed a hardship for the drawer of cheque (accused) by denying equal access to justice as of the complainant. Because it is the accused who has to regularly appear and defend himself before the court, Mr. Luthra argued that it would cause blatant hardship to the accused to appear before the different jurisdictions and face trial as the amendment act is silent on the aspect of lodging complaints against the accused at places where the complainant maintains bank account. Mr. Luthra also raised concerns about the misuse of the amended provisions by the complainant by providing him an un-canalized power to decide the jurisdiction. He stated that since the amendment doesn't specify whether the bank account of the Payee was open at the time of issuance of the cheque or whether it is opened subsequently and to that effect the legislation is vague and arbitrary and provides un-canalized discretion on a complainant/payee or holder till due course to create jurisdiction by opening a bank account at a location of his choice and then prosecuting the 'drawer of the cheque at such location.The matter is next listed on 23.07.2024Case Title: KEDAR BHAUSAHEB MALHARI VERSUS AXIS BANK LIMITEDClick Here To Read/Download The Order

Can SC Transfer Cheque Dishonour Case To Jurisdiction Where Drawer's Bak Is Situated Despite S.142A NI Act? Supreme Court To Consider

Yash Mittal

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