2014 (8) TMI 429 - SC - Companies Law

Jurisdiction of Courts for offence under Section 138 of N.I. Act - Transfer of case - whether the Courts in Delhi had the jurisdiction to entertain the complaint in the facts and circumstances of the case especially when issue of statutory notices was the only reason urged by the respondentcomplainant for filing a complaint in Delhi - Held that - Issue of a statutory notice demanding payment of the cheque amount is, in our opinion, not sufficient to vest the Delhi Courts with the jurisdiction to entertain the complaint and try the case. We say so on the authority of the decision of this Court in Harman Electronics (P) Ltd. v. National Panasonic India (P) Ltd. (2008 (12) TMI 677 - SUPREME COURT OF INDIA) where this aspect was examined at length. This Court ruled that issue of a statutory notice cannot constitute a valid ground for conferring jurisdiction upon the Court concerned to take cognizance of an offence under Section 138. Cheque in question was dishonoured at Vellore where the bank on which it was drawn is located, we see no reason why the complaint filed by the respondents should not be transferred to Vellore for further proceedings - decided in favour of applicant.

Summary

Issues: Jurisdiction of Delhi Courts, Transfer of Criminal Complaint

Jurisdiction of Delhi Courts:
The petitioners sought transfer of a criminal complaint under Section 138 of the Negotiable Instruments Act, 1881 from Delhi to Pondicherry, arguing that the cheque in question was not in discharge of any debt but given as security. They contended that the Courts in Delhi lacked jurisdiction to entertain the complaint, as issuing statutory notices from Delhi did not confer jurisdiction. The Supreme Court analyzed the issue and cited the decision in Harman Electronics (P) Ltd. v. National Panasonic India (P) Ltd., emphasizing that the mere issue of a statutory notice was insufficient to vest Delhi Courts with jurisdiction. The Court also referred to the case of Dashrath Rupsingh Rathod v. State of Maharashtra & Anr., where it was ruled that issuing a notice from Delhi did not establish jurisdiction. The Court overruled an earlier decision in K. Bhaskaran v. Sankaran Vaidhyan Balan & Anr. and concluded that the Delhi Court could not exercise jurisdiction based solely on the notice of demand being issued from Delhi.

Transfer of Criminal Complaint:
Considering the factual position that the cheque was dishonored in Vellore where the bank was located, the Supreme Court decided to transfer the complaint to Vellore for further proceedings. The Court also noted that one of the petitioners had multiple medical problems, which would be addressed by transferring the proceedings from Delhi to Vellore. Consequently, the Court allowed the petition and directed the transfer of Criminal Complaint No.3960 of 2008 from the Metropolitan Magistrate at Patiala House Courts in New Delhi to the Chief Judicial Magistrate at Vellore for trial, or to any other competent Court. No costs were imposed in this decision.