Case Note: Section 142A of Negotiable Instruments Act applies Retrospectively

Bridgestone India Private Limited v. Inderpal Singh[1]

Harish Adwant, IV B.S.L. LL.B.

Section 4 of the Negotiable Instruments (Amendment) Second Ordinance, 2015 (Ordinance) inserts Section 142A in the Negotiable Instruments Act, 1881 (the Act) which provides for retrospective application of Section 142.

A cheque was issued by Inderpal Singh (Respondent) in favour of M/s. Bridgestone India Pvt. Ltd. (Appellant). This cheque was subsequently dishonoured on account of “…exceeds arrangement…” The Appellant then initiated proceedings before the Judicial Magistrate, First Class, Indore (JMFC) which were disposed of on grounds of lack of territorial jurisdiction by an order of the High Court of Madhya Pradesh, Bench at Indore. In response to this ouster of jurisdiction, the Appellant moved the Supreme Court.

The Appellant contended that the Ordinance was in force with effect from June 15, 2015 and had amended the cognizance of offences[2] under the Act. It specified that Section 3 of the Ordinance inserted Sub-section (2) in Section 142 and widened the territorial jurisdiction of the court hearing an offence under Section 138 to the place where a cheque is delivered for collection i.e. the branch of the bank of the payee or holder in due course, where the drawee maintains an account. Section 142A is reproduced elow:

“142A. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 or any judgement, decree, order or directions of any court, all cases arising out of section 138 which were pending in any court, whether filed before it, or transferred to it, before the commencement of the Negotiable Instruments (Amendment) Ordinance, 2015 shall be transferred to the court having jurisdiction under sub-section (2) of section 142 as if that sub-section had been in force at all material times.

(2) Notwithstanding anything contained in sub-section c(2) of section 142 or sub-section (1), where the payee or the holder in due course, as the case may be, has filed a complaint against the drawer of a cheque in the court having jurisdiction under sub-section (2) of section 142 or the case has been transferred to that court under subsection (1), and such complaint is pending in that court, all subsequent complaints arising out of section 138 against the same drawer shall be filed before the same court irrespective of whether those cheques were delivered for collection or presented for payment within the territorial jurisdiction of that court.

(3) If, on the date of the commencement of the Negotiable Instruments (Amendment) Ordinance , 2015, more than one prosecution filed by the same payee or holder in due course, as the case may be, against the same drawer of cheques is pending before different courts, upon the said fact having been brought to the notice of the court, such court shall transfer the case to the court having jurisdiction under sub-section (2) of section 142 before which the first case was filed and is pending, as if that sub-section had been in force at all material times.”

The Court affirmed that provisions of the Ordinance would prevail over those under the Code of Criminal Procedure, 1973 as a result of the non-obstante clause phrased under the newly inserted Section 142A of the Act. While overruling the effect of its decision in Dashrath Rupsingh Rathod v State of Maharashtra,[3] the court stated that Section 142A(1), through the words “…as if that Sub-section had been in force at all material times…” provides for retrospectivity in application of Section 142 of the Act.

The Apex court allowed the Appeal and reinforced the territorial jurisdiction of the JMFC, Indore. Consequently, the impugned order of the High Court of Madhya Pradesh, Bench at Indore was quashed and set aside and the parties were directed to appear before the JMFC, Indore. The Supreme Court’s decision can be viewed here; and the full text of the Ordinance can be found here.

[1]Bridgestone India Private Limited vInderpal Singh[2015] 13 SCALE 155.

[2]Negotiable Instruments Act 1881, s 142.

[3]Dashrath Rupsingh Rathod v State of Maharashtra [2014] 9 SCC 129.

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