SC expresses displeasure over banks lodging cheque bounce cases at distant locations

New Delhi: Expressing displeasure over the "misuse of law" and "harassment" meted out to small-time borrowers by financial institutions and banks by lodging cheque bounce cases at distant locations in the country, the Supreme Court on Thursday said it would examine the issue and settle the law.

A bench of Justices Surya Kant and Joymalya Bagchi expressed shock over a case in which one Golla Naraesh Kumar Yadav sought the transfer of a case lodged by Kotak Mahindra Bank before the chief judicial magistrate at Chandigarh to a court of metropolitan magistrate in Adoni of Kurnool district in Andhra Pradesh.

Appearing for Yadav, the bench was informed by advocate P Mohith Rao that the bank has lodged the case at Chandigarh despite all transactions having taken place in Andhra Pradesh, which is creating difficulties for the petitioner.

He said that the borrower of the credit facilities from the bank regularly paid the loan instalment but the case was lodged due to a small default.

The bench asked the counsel appearing for the bank as to why the complaint was lodged against Yadav in Chandigarh when the entire transaction had taken place in Andhra Pradesh.

The counsel for the bank said that they have an office in Chandigarh which deals with the loan for which the petitioner is a guarantor.

"Just because you have an office in Chandigarh, you will lodge a complaint there. This is unfair and harassment of small-time borrowers.

"What makes you think that you will not get justice in Andhra Pradesh? Chandigarh courts are not sitting idle," Justice Kant told the counsel for the bank.

Rao told the bench that this is a problem which is happening day in and day out, and the apex court is flooded with cases where litigants, who are sometimes small borrowers, have to seek transfer of the cases lodged against them.

"They file cases in Delhi, Calcutta or any other city while transactions normally have taken place in some other distant part of the country," he submitted. Justice Kant told the bank's counsel, "You are like an octopus. You have offices everywhere, so does it mean you will file cases here and there? We are opening courts everywhere but you still file cases at distant places, just to harass the borrowers. Where is the access to justice?"