Home  > Recent Judgements  >SUPREME COURT FLAGS CONCERNS OVER JUDGEMENT DENYING TRANSFERS BASED ON MERE INCONVENIENCE

Dec  07- 2025

SUPREME COURT FLAGS CONCERNS OVER JUDGEMENT DENYING TRANSFERS BASED ON MERE INCONVENIENCE

The Supreme Court has cast doubt on its recent judgment in SHRI SENDHUR AGRO & OIL INDUSTRIES VS. KOTAK MAHINDRA BANK LTD which held that – “mere convenience or inconvenience of the parties may not by itself be sufficient enough to pray for transfer” of a criminal case from one state to another as per Section 406 of the Code of Criminal Procedure.

A bench comprising Justice Surya Kant(as he was then) and Justice Joymalya Bagchi, in the order passed on November 18 (but uploaded today), referred the Shri Sendhur Agro & Oil Industries case to a larger bench for an authoritative and binding clarification.

Background: The “SHRI SENDHUR AGRO” Judgment (March 2025)

  • In “SHRI SENDHUR AGRO & OIL INDUSTRIES V. KOTAK MAHINDRA BANK LTD.” (2025 INSC 328) the Supreme Court dealt with transfer petitions filed under Code of Criminal Procedure, 1973 (CrPC) Section 406, challenging criminal complaints under Negotiable Instruments Act, 1881 (NI Act) Section 138, for cheque dishonour.
  • In that case, the petitioner (a corporate borrower based in Coimbatore) argued that because all loan transactions and related dealings occurred in Tamil Nadu, the case filed by the bank in a distant jurisdiction (Chandigarh) ought to be transferred to Coimbatore.
  • The SC, by a bench of Justices J.B. Pardiwala and R. Mahadevan, rejected the transfer petitions. It held that under the amended Negotiable Instruments Act, 1881 (post-2015), the court where the cheque is presented for collection (through the payee’s bank/branch) here, Chandigarh has valid territorial jurisdiction under Section 142(2) of the Negotiable Instruments Act, 1881.
  • Importantly, the Court clarified that for exercising its discretion under Section 406 Code of Criminal Procedure, 1973 (transfer power), “mere inconvenience or hardship” of the accused (distance, travel, language, unfamiliar lawyer etc.) is not a sufficient ground. The transfer power must be exercised only when “expedient for the ends of justice,” which requires real issues like bias, threat to witnesses, fear of unfair trial etc.
  • The Court even pointed out that accused can seek exemption from personal appearance or request to appear online instead of transferring the entire case.

In sum: 2025’s “Shri Sendhur Agro” decision reinforced that statutory jurisdiction under Negotiable Instruments Act, 1881 (where cheque is presented) governs, and the Court will not routinely transfer such criminal cases on account of inconvenience to accused.

Recent Development: Supreme Court Re-Examines That Judgment in Yadav’s Case

What Happened

  • On 18 November 2025 (uploaded publicly 5 December), a different bench of the Supreme Courtcomprising (then) Justice Surya Kant and Justice Joymalya Bagchi referred the “Shri Sendhur Agro” judgment to a larger bench. The reason: serious doubts whether the earlier ruling was correct in completely rejecting “inconvenience/hardship” as valid grounds for transfer under Section 406 Code of Criminal Procedure, 1973.
  • This arose in a transfer petition filed by Golla Naraesh Kumar Yadav a trader from Adoni (Andhra Pradesh) in a case filed by Kotak Mahindra Bank. The bank had presented two cheques (worth ₹ 3 crores and ₹ 6 crores) issued by Yadav’s Adoni branch, for collection in Chandigarh; on dishonour, the bank filed two criminal complaints under Section 138 Negotiable Instruments Act, 1881 in Chandigarh.
  • The Bench observed that in practical terms, the accused (Yadav) would have to travel over 2,000 km, engage an unfamiliar lawyer, manage significant costs, possibly contend with language barriers, and find it difficult to regularly consult lawyer or bring witnesses. Meanwhile, the bank offered no reason other than “convenience” for choosing Chandigarh.
  • The Bench also noted that the bank had instituted hundreds (476) of similar cases in Chandigarh against accused persons outside the jurisdiction pointing to a pattern of centralising prosecutions far from borrowers’ residences.
  • The Bench referred the matter to a larger bench for authoritative and binding clarification. In the meanwhile, it transferred the two cases to the court at Hyderabad (rather than the borrower’s hometown Adoni) reasoning that related recoveries under applicable laws (e.g., before DRT) are pending in Hyderabad, and High Court proceedings are also there, making it a more appropriate forum for both sides.

What This Means – Why SC Re-examining Its Own View

The new bench found that the reasoning in “Shri Sendhur Agro” was potentially inconsistent with earlier jurisprudence, in particular NAHAR SINGH YADAV V. UNION OF INDIA (2011), which had recognised “comparative inconvenience and hardship” to parties/witnesses as a valid consideration for transfer petitions.

The Bench emphasised that in chequebounce cases (quasi-criminal disputes arising from private financial dealings), because the burden of rebutting statutory presumptions lies on the accused, location of trial becomes crucial for fair representation and effective defence. Denying transfer just because complainant bank preferred a distant jurisdiction could render the accused’s fair-trial rights illusory.

It also observed that when parties are unequal in socioeconomic standing (a big bank vs. a small borrower), the balance of convenience/inconvenience may tilt in favour of the weaker party; and this inequality cannot be ignored while deciding transfer applications.

In short: the Court is signalling that a rigid rule against transfers on account of “mere inconvenience” might need re-thinking at least insofar as Negotiable Instruments Act, 1881/Sec 138 cheque bounce cases are concerned.

Legal Significance and Broader Implications

Reopening of Transfer Jurisprudence in Negotiable Instruments Act, 1881 Cases

  • The reference to a LargerBench signal that the Supreme Courtis open to revisiting its 2025 “Shri Sendhur Agro” decision. If the Larger Bench accepts that inconvenience/hardship can be a legitimate ground for transfer, it would reintroduce flexibility into case-transfer jurisprudence under Section 406 Code of Criminal Procedure, 1973 for Negotiable Instruments Act, 1881 offences.
  • This could benefit many borrowers across the country who were forced to defend cheque-bounce complaints in distant jurisdictions (often as a strategy by banks).

Fair Trial / Equality Under LawEmphasis on Access to Justice

  • The decision underscores that procedural convenience to complainant (e.g., bank) cannot come at the cost of the accused’s constitutional and statutory rights to fair trial.
  • It better aligns with earlier precedents (like Nahar Singh Yadav) that recognised relative hardship to parties/witnesses as relevant thus protecting vulnerable individuals in “DAVID VS GOLIATH” litigation.

Potential Check on “Forum Shopping” by Banks

  • The Court has indirectly criticised the practice where banks (or other creditors) routinely present cheques for collection in faroff, perhaps more bank-friendly or convenient jurisdictions, forcing borrowers to litigate hundreds/thousands of km away. The reference to larger bench may discourage such strategies going forward.
  • Many pending cheque bounce cases (especially those filed in distant jurisdictions) may see renewed petitions for transfer, especially where accused persons are weak or distant.

Interplay of Negotiable Instruments Act, 1881, Code of Criminal Procedure, 1973 and “Ends of Justice” Standard

  • The case highlights the delicate balance between statutory jurisdiction under Negotiable Instruments Act, 1881 (post2015 amendment) and discretionary power under Code of Criminal Procedure, 1973.
  • It reiterates that “ends of justice” is not a free-floating notion but must be grounded in real disadvantages to accused/witnesses, unequal status of parties, or circumstances impairing fair trial.

Why This Matters Especially for Borrowers & Practitioners

  • For borrowers (individuals, small traders, SMEs) who deal with banks and issue cheques: this reopened jurisprudence creates realistic hope to shift cases to their home courts rather than travel across states reducing burden, costs, time, and language/representation hardship.
  • For defence lawyers and litigators: this may become an important lever in future Negotiable Instruments Act, 1881 cases especially where banks have filed cases in distant cities for “collection convenience.”
  • For banks & creditors: this signals caution although they may have statutory right to file in collection-centre jurisdiction, over-reliance on this may attract scrutiny if courts find imbalance or unfair burden on accused.

What Remains Unsettled – What the Larger Bench May Examine

  • Whether “inconvenience or hardship” alone without any evidence of bias, collusion, threats, or prejudice is sufficient to justify transfer in Negotiable Instruments Act, 1881/Section 138 cases.
  • What threshold of hardship should be required (e.g. distance, costs, language, representation availability), especially in cases involving corporates vs individuals.
  • Whether the criterion should differ where parties are socioeconomically equal vs grossly unequal.
  • How to reconcile statutory right under Section 142(2) Negotiable Instruments Act, 1881 (chequepresentment jurisdiction) with a flexible “ends of justice” test under Section 406 Code of Criminal Procedure, 1973 without creating uncertainty for complainants.
  • Implications for ongoing or future largescale chequebounce litigations across India.

Conclusion – Importance of This Development

The Supreme Court’s decision to refer “SHRI SENDHUR AGRO & OIL INDUSTRIES V. KOTAK MAHINDRA BANK LTD.” to a Larger Bench marks a potentially watershed moment in cheque-bounce jurisprudence. It signals a readiness to correct a perhaps overly rigid approach that prioritized statutory convenience for banks over the accused’s right to a fair, reasonable trial. For small borrowers and individual accused persons especially those who lack resources this could significantly improve access to justice and balance the justice system more equitably.

Given the high stakes (both for banks and borrowers), the forthcoming Larger Bench judgment will be closely watched by all stakeholders, legal practitioners, banks, debtors, and scholars.