Honourable Supreme Court has held in the case of Dashrath Rupsingh Rathod Vs. State of Maharashtra & Anr. that all the pending cases of cheque bouncing under Negotiable Instrument Act to be transferred to the place from the cheque is issued. The Court in the case has held as under-
31. To Sum up
(i) An offence under Section 138 of the Negotiable Instruments Act, 1881 is committed no sooner a cheque drawn by the accused on an account being maintained by him in a bank for discharge of debt/liability is returned unpaid for insufficiency of funds or for the reason that the amount exceeds the arrangement made with the bank.
(ii) Cognizance of any such offence is however forbidden under Section 142 of the Act except upon a complaint in writing made by the payee or holder of the cheque in due course within a period of one month from the date the cause of action accrues to such payee or holder under clause (c) of proviso to Section 138.
(iii) The cause of action to file a complaint accrues to a complainant/payee/holder of a cheque in due course if
(a) the dishonoured cheque is presented to the drawee bank within a period of six months from the date of its issue.
(b) If the complainant has demanded payment of cheque amount within thirty days of receipt of information by him from the bank regarding the dishonour of the cheque and
(c) If the drawer has failed to pay the cheque amount within fifteen days of receipt of such notice.
(iv) The facts constituting cause of action do not constitute the ingredients of the offence under Section 138 of the Act.Online GST Certification Course by TaxGuru & MSME- Click here to Join
(v) The proviso to Section 138 simply postpones/defers institution of criminal proceedings and taking of cognizance by the Court till such time cause of action in terms of clause (c) of proviso accrues to the complainant.
(vi) Once the cause of action accrues to the complainant, the jurisdiction of the Court to try the case will be determined by reference to the place where the cheque is dishonoured.
(vii) The general rule stipulated under Section 177 of Cr.P.C applies to cases under Section 138 of the Negotiable Instruments Act. Prosecution in such cases can, therefore, be launched against the drawer of the cheque only before the Court within whose jurisdiction the dishonour takes place except in situations where the offence of dishonour of the cheque punishable under Section 138 is committed along with other offences in a single transaction within the meaning of Section 220(1) read with Section 184 of the Code of Criminal Procedure or is covered by the provisions of Section 182(1) read with Sections 184 and 220 thereof.
32. Before parting with this aspect of the matter, we need to remind ourselves that an avalanche of cases involving dishonour of cheques has come upon the Magistracy of this country. The number of such cases as of October 2008 were estimated to be more than 38 lakhs by the Law Commission of India in its 213th Report. The result is that cases involving dishonour of cheque is in all major cities choking the criminal justice system at the Magistrate’s level. Courts in the four metropolitan cities and other commercially important centres are particularly burdened as the filing of such cases is in very large numbers. More than five lakh such cases were pending in criminal courts in Delhi alone as of 1st June 2008. The position is no different in other cities where large number of complaints are filed under S.138 not necessarily because the offence is committed in such cities but because multinational and other companies and commercial entities and agencies choose these places for filing the complaints for no better reason than the fact that notices demanding payment of cheque amounts were issued from such cities or the cheques were deposited for collection in their banks in those cities. Reliance is often placed on Bhaskaran’s case to justify institution of such cases far away from where the transaction forming basis of the dishonoured cheque had taken place. It is not uncommon to find complaints filed in different jurisdiction for cheques dishonoured in the same transaction and at the same place. This procedure is more often than not intended to use such oppressive litigation to achieve the collateral purpose of extracting money from the accused by denying him a fair opportunity to contest the claim by dragging him to a distant place. Bhaskaran’s case could never have intended to give to the complainant/payee of the cheque such an advantage. Even so, experience has shown that the view taken in Bhaskaran’s case permitting prosecution at any one of the five different places indicated therein has failed not only to meet the approval of other benches dealing with the question but also resulted in hardship, harassment and inconvenience to the accused persons. While anyone issuing a cheque is and ought to be made responsible if the same is dishonoured despite compliance with the provisions stipulated in the proviso, the Court ought to avoid an interpretation that can be used as an instrument of oppression by one of the parties. The unilateral acts of a complainant in presenting a cheque at a place of his choice or issuing a notice for payment of the dishonoured amount cannot in our view arm the complainant with the power to choose the place of trial. Suffice it to say, that not only on the Principles of Interpretation of Statutes but also the potential mischief which an erroneous interpretation can cause in terms of injustice and harassment to the accused the view taken in the Bhaskaran’s case needs to be revisited as we have done in foregoing paragraphs.
The decision of the Honourable Supreme Court in above case may cause undue hardship and the decision needs to be reviewed by Honourable Supreme Court for the following reasons :-
1. discomfort and unnecessary pain which could be avoided if the consent of the applicant or plaintiff is taken before shifting it. As it is he suffering because of no fault of his and now add to his woes this new order by the Honourable Court has passed .
2. the plaintiff who has already paid to a lawyer while hiring him at the of filing the case now will pay again to hire a new lawyer at a new place.
3. A new place to which the poor plaintiff is not known to will struggle hard to find a suitable lawyer or seeking help of others who may not understand his need and urgency.
4. where the case is already proceeding will be shifted to a new court and will start from the beginning again proving to a long litigation starting afresh. Instead of shifting, suggestible would have been early decision in all these cases at negotiation level.
5. where courts are full of other cases shifting of these cases will add to their lists making it longer.
6. at times transactions are so small which can be sorted at negotiation level now will be burdened with the high fee charged by the new lawyers and other litigation charges.
7. the poor plaintiff who is already in loss of money, interest loss on that money, loss in business due to non payment by the defaulter will have to go through now these troubles of going to a new place ;bearing travelling , boarding and lodging charges to stay to attend to the hearings.
Requesting the Honourable Court to reconsider this shifting of cheque bouncing to the new place.
(Compiled by Advocate Sargun Babuta and CA Sandeep Kanoi)