Source:  Supreme Court 

Why in News? 

In recent Supreme Court in matter of Kasthuripandian v. RBL Bank Limited ruled on the transfer petition related to Section 138 of the Negotiable Instruments Act, 1881(NI Act). Justices AS Oka and Rajesh Bindal dismissed the accused's plea to transfer the complaint, affirming that such decisions typically rest with the complainant, not the accused.  

• This decision clarifies the boundaries of court jurisdiction in such matters while allowing the accused to seek exemptions from personal appearance as necessary. 

What was the Background of Kasthuripandian v. RBL Bank Limited? 

• A complaint was initially filed under Section 138 of the NI Act, 1881 for dishonour of cheques. 
• Kasthuripandian approached the Supreme Court to transfer the complaint filed against him to a different court. 
• The Supreme Court considered that the accused person in a cheque dishonour case has the right to seek the transfer of the case to another court. 
• The Supreme Court needed to examine this issue to determine the validity of Kasthuripandian S's petition. 

What were the Court’s Observations? 

• The Supreme Court dismissed the transfer petition filed by the accused in a Section 138 NI Act case. 
• The Court held that an accused in a cheque dishonour case cannot seek transfer of the complaint. 
• The Bench, comprising Justices AS Oka and Rajesh Bindal, emphasized that the power to transfer such cases does not extend to requests made by the accused. 
• The Court affirmed that the forum choice in cheque dishonour cases typically rests with the complainant. 
• While rejecting the transfer request, the Court noted that the accused retains the right to apply for exemption from personal appearance. 
• The Bench directed that any application for exemption from personal appearance should be made to the court concerned where the complaint is filed. 
• This ruling effectively limits the accused's ability to change the venue of the trial while maintaining provisions for addressing potential hardships in court attendance. 

What is Dishonor of Cheque under Negotiable Instruments Act? 

• About: 
  • Dishonor of Cheques is dealt under Section 138, covered under Chapter 17 of the NI Act inserted in 1988. 
  • Section 138 of NI Act specifically deals with the offence related to dishonor of a cheque for insufficiency of funds or if it exceeds the amount arranged to be paid by the drawer's account. 
  • It relates to the procedure where a cheque is drawn by drawer to discharge a debt, wholly or in part, and the cheque is returned to the Bank. 
• Legal Provision: 
  • This Section deals with the dishonor of cheque for insufficiency, etc., of funds in the account.  
  • It states that where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honor the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: 
  • Provided that nothing contained in this section shall apply unless— 

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; 

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and 

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. 

• Explanation. - For the purposes of this section, debt or other liability means a legally enforceable debt or other liability. 

What is Section 406 of CrPC? 

• Supreme Court’s has power under Section 406 Code of Criminal Procedure ,1973 (CrPC) to transfer Section 138 NI Act cases and effect of non-obstante clause under Section 142(1) NI Act. 
• Now, Section 446 of Bharatiya Nagarik Suraksha Sanhita, 2023(BNSS) deals with the power of Supreme Court to transfer cases and appeals. 
• This section empowers the Supreme Court to transfer any criminal case or appeal from one High Court to another High Court or from a Criminal Court subordinate to one High Court to a Criminal Court subordinate to another High Court. 
• The Supreme Court may act under this section only on the application of the Attorney-General of India or of a party interested, and every such application shall be made by motion, which shall, except when the applicant is the Attorney-General of India or the Advocate-General of the State, be supported by affidavit or affirmation. 
• The Supreme Court may act only on the application of: 
  • The Attorney-General of India or; 
  • A party interested 
    • Complainant 
    • Public prosecutor 
    • The accused 
    • A person lodging the First Information Report (FIR). 
• Every such application shall be made in the form of motion supported by affidavit or affirmation, except when the application is by: 
  • The Attorney-General of India or; 
  • The Advocate-General of the State. 
• Where any application for the exercise of the powers conferred by this section is dismissed, the Supreme Court may, if it is of opinion that the application was frivolous or vexatious, order the applicant to pay by way of compensation to any person who has opposed the application such sum not exceeding one thousand rupees as it may consider appropriate in the circumstances of the case. 

Case Law 

• S Nalini Jayanthi v. M. Ramasubba Reddy (2022) 
  • The Supreme Court observed that a complaint under Section 138 cannot be transferred as per the convenience of the accused. Court state that the petitioner is a woman and a senior citizen, the judge observed that she can always seek exemption from personal appearance.