Cheque Cases Can Be Transferred From One State To Another Invoking Section 406 CrPC : SC

06 Aug 2025 --
0 Comments

⚖️ Topic:

“Cheque Cases Can Be Transferred From One State To Another Invoking Section 406 CrPC” – Supreme Court

🔹 What is Section 406 of the CrPC?

Section 406 CrPC – Power of the Supreme Court to Transfer Cases and Appeals:

“Whenever it is made to appear to the Supreme Court that an order is expedient for the ends of justice, it may transfer any particular 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.”

This section is invoked in cases where:

A fair trial is at stake, or

There is risk of miscarriage of justice, or

There are multiple cases in different jurisdictions causing inconvenience or delay.

🔹 What is Section 138 of the Negotiable Instruments Act?

Section 138 NI Act deals with the offence of dishonour of cheque due to insufficient funds or other reasons.

It's a criminal offence, though compoundable in nature, and is widely used in commercial litigation.

🔹 Legal Issue Addressed

Whether the Supreme Court has the power to transfer cheque bounce cases under Section 138 NI Act from courts in one state to another state under Section 406 CrPC?

✅ Supreme Court's Ruling: YES

The Supreme Court of India has held that:

Cheque bounce cases are criminal proceedings, and hence they fall within the ambit of Section 406 CrPC.

The Court can transfer such cases inter-state, i.e., from one High Court jurisdiction to another, in the interest of justice.

🔹 Key Case Law:

M/S Meters and Instruments Pvt. Ltd. & Anr. v. Kanchan Mehta, (2018) 1 SCC 560

Though not directly about transfer, this case laid the foundation that Section 138 cases are criminal in nature but have civil overtones.

It emphasized speedy disposal and judicial efficiency in such matters.

Case Directly Addressing the Transfer:

Y. Abraham Ajith v. Inspector of Police, (2004) 8 SCC 100

Supreme Court clarified that:

“The jurisdiction to try a cheque bounce case depends on where the cheque was dishonoured, presented, or notice was issued.”

This led to jurisdictional confusion, especially when multiple cases were filed in different states.

Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129

Held that jurisdiction lies where the drawee bank is located, i.e., where the cheque is dishonoured.

Resulted in a massive transfer of pending cases across states.

Recent Application of Section 406 CrPC in NI Act Cases:

In various cases, especially where:

There are multiple Section 138 cases filed in different courts against the same accused, or

There is a request for consolidation and transfer to a single court for convenience,

The Supreme Court has exercised its powers under Section 406 CrPC to transfer all cases to one jurisdiction.

✅ Reasoning:

Avoid multiplicity of litigation.

Prevent harassment of the accused having to defend multiple cases across India.

Save judicial time and resources.

Ensure consistent and fair trial.

🔹 Example: Practical Application

Let’s say:

A company has its registered office in Delhi.

It issues cheques to suppliers in Mumbai, Chennai, and Kolkata.

The cheques are dishonoured, and three separate criminal complaints under Section 138 NI Act are filed in these cities.

👉 The accused (company or director) can file a transfer petition under Section 406 CrPC before the Supreme Court seeking transfer of all cases to Delhi, for reasons such as:

Common defence,

Same transaction,

Convenience of parties,

Avoidance of conflicting judgments.

🔹 Principles Laid Down

Principle	Explanation
Cheque cases are criminal in nature	Hence, covered by Section 406 CrPC.
Supreme Court has exclusive power	Only SC can order inter-state transfer of criminal cases.
Consolidation is desirable	Especially when multiple cases are filed from a single transaction or against the same accused.
Ends of justice are paramount	If separate trials cause hardship, transfer is justified.