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Question Bank
Question
Explain the significance of the non obstante clause found in Section 142(1) of the Negotiable Instruments Act, 1881. Does this clause exclude the application of other procedural laws like Section 406 of the Cr.P.C. for transferring cases?
Solution
The non obstante clause, meaning "notwithstanding anything contained in," is a legislative tool used to give the overriding effect to a specific provision. In the context of Section 142(1) of the Negotiable Instruments Act, 1881, this clause primarily overrides the general provisions of the Code of Criminal Procedure, 1973 (Cr.P.C.) concerning the cognizance of offences. Its key purpose is to mandate that no court can take cognizance of a cheque dishonour offence under Section 138 except upon a written complaint by the payee, made within a stipulated time. However, this clause is not interpreted to exclude all other procedural powers under the Cr.P.C. Specifically, it does not nullify the power of the Supreme Court under Section 406 Cr.P.C. to transfer cases. This power remains intact to serve the broader interests of justice, as the non obstante clause in Section 142(1) is context-specific and relates to the conditions for taking cognizance, not the subsequent transfer of proceedings for convenience and justice.
Question
As per the amended Negotiable Instruments Act, 1881, which court has the exclusive jurisdiction to inquire into and try an offence under Section 138? Elaborate on the criterion established by Section 142(2).?
Solution
Following the 2015 amendment, the Negotiable Instruments Act, 1881 introduced Section 142(2) to bring clarity and exclusivity to territorial jurisdiction. This section mandates that an offence under Section 138 shall be inquired into and tried only by a Court within a specific local jurisdiction. The key criterion, as per Section 142(2)(a), is the location of the branch of the bank where the payee or holder in due course maintains the account and to which the cheque was delivered for collection. This means the exclusive jurisdiction lies with the court within whose local limits the bank branch of the complainant (payee), where they deposited the cheque for encashment, is situated. This provision specifically overturned previous legal positions that vested jurisdiction in the location of the drawer's bank.
Question
What are the essential components or stages that collectively constitute the commission of an offence under Section 138 of the Negotiable Instruments Act, 1881?
Solution
The offence under Section 138 is a composite one, completed through a series of interconnected acts. The essential components, as established by judicial precedent, are: (1) drawing of the cheque by the drawer; (2) presentation of the cheque to the bank by the payee within its validity period; (3) returning of the cheque unpaid by the drawee bank due to insufficiency of funds or other specified reasons; (4) giving notice in writing to the drawer of the cheque demanding payment within a statutory timeframe after dishonour; and (5) the subsequent failure of the drawer to make the payment to the payee within 15 days of receiving the demand notice. The completion of all these stages is necessary to trigger the cause of action for prosecution.
Question
In the context of the Negotiable Instruments Act, 1881, what is the legal implication of a drawer issuing stop payment instructions to their bank concerning a cheque?
Solution
Issuing stop payment instructions is a significant act that directly leads to the dishonour of the cheque when it is presented for payment by the payee. Under the Negotiable Instruments Act, 1881, such dishonour, unless justified by a valid legal reason, is presumed to be for reasons that fall within the ambit of Section 138. The law treats the stop payment instruction as an act reflecting the drawer's intention to not honour the legally enforceable liability for which the cheque was issued. Therefore, it constitutes a valid ground for initiating a cheque dishonour case, as the cheque is returned unpaid not because of a technical error, but due to a deliberate act of the drawer, fulfilling the condition of dishonour required to complete the offence.
Question
Under what circumstances can the Supreme Court exercise its power under Section 406 of the Cr.P.C. to transfer criminal cases, and how does this power apply to cases involving the dishonour of cheques?
Solution
The Supreme Court's power under Section 406 of the Code of Criminal Procedure (Cr.P.C.) is a wide discretionary power exercised to meet the ends of justice. The primary circumstance warranting such transfer is when it is found expedient to avoid multiplicity of proceedings, conflicting judgments, or to provide a convenient forum for all parties and witnesses. This power is particularly relevant in cheque dishonour cases arising from a single transaction. For instance, if multiple cheques from one transaction are dishonoured and cases are filed in different courts across the country, the Supreme Court can transfer all cases to one competent court to ensure a common adjudication. This prevents the possibility of contradictory findings and serves the interests of all parties, and this power is not diluted by the special provisions of the Negotiable Instruments Act.
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