Source: Supreme Court 

Why in News? 

A bench of Justice JB Pardiwala and Justice R Mahadevan laid down the instances in which the trial could be transferred. It was also held that transfer of trial should not be done in routine manner and more particularly on plea of lack of territorial jurisdiction under Section 138 of NIA.    

• The Supreme Court held this in the case of M/s Shri Sendhuragro and Oil Industries Pranab Prakash v. Kotak Mahindra Bank (2025). 

What was the Background of M/s Shri Sendhuragro and Oil Industries Pranab Prakash v. Kotak Mahindra Bank (2025) Case?   

• The transfer petition has been filed by a proprietary concern through its proprietor to transfer a criminal case from Judicial Magistrate I Class, Chandigarh to Metropolitan Magistrate, Coimbatore, Tamil Nadu. 
• The petitioner is engaged in the business of producing and selling coconut oil and its by products and is situated in Coimbatore. 
• The petitioner availed overdraft facilities from Kotak Mahindra Bank at its R.S. Puram branch in Coimbatore against the equitable mortgage of properties located in Coimbatore. 
• The loan was processed, sanctioned, and disbursed in Coimbatore, with all the collateral properties being located in Tamil Nadu. 
• The petitioner defaulted on EMI payments in 2018, resulting in a demand notice under the SARFAESI Act,2002 for a sum of Rs. 2.74 crores, with subsequent sale notices and asset sales taking place in Coimbatore. 
• Despite all transactions taking place within Tamil Nadu jurisdiction, the respondent Bank chose to present a cheque for Rs. 21 lakhs at Chandigarh and filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) in Chandigarh. 
• The petitioner argues that filing the case in Chandigarh is meant to harass them, as they don't know anyone in Chandigarh or the local language and would have to travel far from Tamil Nadu for court proceedings. 
• The respondent Bank contends that the cheque was presented at the Chandigarh Branch because the routing/collection account for NPA accounts was located there, making the Chandigarh court a court of competent jurisdiction. 
• The petitioner is not disputing the jurisdiction of the Chandigarh court but is seeking transfer on grounds that it is "expedient for the ends of justice." 
• The Supreme Court has previously issued stay orders on the proceedings and asked the Bank to explain why it filed complaints in Chandigarh and not in Coimbatore. 

What were the Court’s Observations? 

• The Court analyzed the provisions related to jurisdiction in NIA. 
• The Court noted that the amendment of 2015 which inserted Section 142 (2) and Section 142 A of NIA was a direct consequence of the judgment in Dashrath Rupsingh Rathod v. State of Maharashtra (2014). 
• Section 142 (2) of NIA makes it clear that the jurisdiction to try such an offence would vest only in the Court within whose jurisdiction the branch of the Bank where the cheque was delivered for collection, through the account of the payee or holder in due course, is situated. 
• The newly inserted Section 142-A further clarifies this position by validating the transfer of pending cases to the Courts conferred with such jurisdiction after the amendment came into force. 
• The Court observed that the expression used in Section 406 of Criminal Procedure Code, 1973 (CrPC) “expedient for the ends of justice” is of great importance. 
• Discussion of laws Related to Jurisdiction: 
  • The Court observed that while the jurisdiction of the Civil Court is determined by (i) territorial and (ii) pecuniary limits, the jurisdiction of Criminal Court is determined by (i) the offence and / or (ii) the offender. 
  • It was further observed that the rules relating to territorial jurisdiction are contained in Chapter XIII and Chapter XXXV contains the answer to the question as to what happens when a court which has no territorial jurisdiction, inquires or tries an offence. 
• Discussion of Law on Transfer of Cases: 
  • The Court observed that transfer under Section 406 of CrPC can be allowed where there is reasonable apprehension backed by evidence that justice may not be done, and mere convenience or inconvenience of the parties may not be sufficient to pray for the transfer. 
  • The Court held that an order for transfer of trial should not be passed as a matter of routine and more particularly on the plea of lack of territorial jurisdiction of the Court to try the offence under Section 138 of NI Act. 
  • The Court further held that transfer of cases under Section 406 CrPC may be allowed when there is a reasonable apprehension backed by evidence that justice may not be done, and mere convenience or inconvenience of the parties may not by itself be sufficient enough to pray for transfer. 
  • The Court has to appropriately balance the grounds raised in the facts and circumstances of each case and exercise its discretion in a circumspect manner while ordering a transfer under Section 406. 
  • The Court held in this case that although no rigid and inflexible rule or test could be laid down to decide whether or not the power under Section 406 CrPC should be exercised, yet it is manifest from a bare reading of sub-sections (2) and (3) of the said section and on an analysis of the decisions of this Court that an order of transfer of trial is not to be passed as a matter of routine and more particularly on the plea of lack of territorial jurisdiction of the court to try the offence under Section 138 of the NI Act.  
• In the facts of the present case the Court held that: 
  • For the purpose of transfer of any case or proceedings under Section 406 of the CrPC the case must fall within the ambit of the expression “expedient for the ends of justice”. 
  • Mere inconvenience or hardship that the accused may have to face in travelling from Coimbatore to Chandigarh would not fall within the expression “expedient for the ends of justice”. 
• Thus, the Court held that no case is made out for transfer of petition under Section 406 of CrPC.

What is the Provision Concerning Jurisdiction under the NI Act? 

• The jurisdiction cases relating to Negotiable Instruments is provided in Section 142 (2) of NIA. 
• Section 142 (2) provides the following: 
  • Jurisdiction for Trial – The offence under Section 138 will be tried only in a court with jurisdiction based on where the cheque was processed. 
  • If Cheque is Deposited for Collection (Through an Account) 
    • The case will be tried in the court where the bank branch is located, where the payee (receiver of money) or holder in due course has their account. 
  • If Cheque is Presented for Payment (Without an Account Transfer) 
    • The case will be tried in the court where the drawer (issuer of the cheque) holds their account in the drawee bank. 
  • Explanation for Clause (a): 
    • If the cheque is deposited at any branch of the payee’s bank, it will be considered as deposited at the branch where the payee maintains their account.

What is the Law on Transfer of Cases under Section 406 of CrPC? 

• Section 406: 
  • 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 Court in the present case laid down the factors to be considered for transfer of trial: 
  • When it appears that the State machinery or prosecution is acting hand in glove with the accused, there is likelihood of miscarriage of justice due to the lackadaisical attitude of the prosecution. 
  • When there is material to show that the accused may influence the prosecution witnesses or cause physical harm to the complainant 
  • Comparative inconvenience and hardships likely to be caused to the accused, the complainant/the prosecution and the witnesses, besides the burden to be borne by the State exchequer in making payment of travelling and other expenses of the official and non-official witnesses 
  • A communally surcharged atmosphere, indicating some proof of inability in holding a fair and impartial trial because of the accusations made and the nature of the crime committed by the accused 
  • Existence of some material from which it can be inferred that some persons are so hostile that they are interfering or are likely to interfere, either directly or indirectly, with the course of justice. 
• It is to be noted that the above-mentioned factors are not exhaustive and are illustrative of the requirements of a fair trial.