2014 (8) TMI 649 - SC - Companies Law

Jurisdiction of court - Dishonour of cheque - Whether Courts at Gurgaon holds the jurisdiction to entertain the appeal ince the notice as contemplated in Section 138 of the Negotiable Instruments Act, 1881 had been dispatched from Gurgaon - Held that - It appears that the learned Judicial Magistrate, First Class (Special Court), District Gurgaon, Haryana, on 14.6.2010 issued Summons to the Appellant. The Appellant thereupon approached the High Court of Punjab & Haryana at Chandigarh, which passed the impugned order. On 23.9.2013, this Court issued notice and also ordered that proceedings before the Trial Court shall remain stayed. It is evident, therefore, that evidence, post-summoning, has not been recorded. Courts at Gurgaon do not possess territorial jurisdiction to entertain the present proceedings under Section 138 of the NI Act solely because, on the instructions of the Respondent, a legal notice of demand has emanated from that city. The Complaint be returned to the Complainant/Respondent for refilling in the appropriate Court at Bangalore, Karnataka. As mentioned in Dashrath Rupsingh, if the Complaint is re-filed in the appropriate Court in Bangalore within 30 days, it shall be deemed to have been filed within limitation. The interim orders stand recalled.

Summary

Issues Involved: Jurisdiction of Court in a case under Section 138 of the Negotiable Instruments Act, 1881.

Analysis:

1. Jurisdiction of Court: The Supreme Court addressed the issue of territorial jurisdiction in a case under Section 138 of the Negotiable Instruments Act, 1881. The appeal challenged the High Court's order, which held that the Courts in Gurgaon, Haryana had jurisdiction based on the dispatch of notice under Section 138 from Gurgaon. The Supreme Court referred to previous decisions like K. Bhaskaran v. Sankaran Vaidhyan Balan and Harman Electronics Private Limited v. National Panasonic India Private Limited. However, the Court emphasized the recent decision in Dashrath Rupsingh Rathod v. State of Maharashtra, stating that the issuance of the notice does not determine territorial jurisdiction. The dishonored cheques were drawn on the Appellant's Bank in Bangalore, and the Court concluded that Gurgaon did not have jurisdiction solely based on the notice's dispatch location.

2. Procedural History: The Court noted that the Judicial Magistrate in Gurgaon issued summons to the Appellant, who then approached the High Court of Punjab & Haryana at Chandigarh. The Supreme Court intervened by issuing notice and staying the proceedings before the Trial Court, preventing the recording of evidence post-summoning. The Court emphasized that evidence had not been recorded due to the stay order.

3. Decision and Order: Considering the lack of territorial jurisdiction in Gurgaon, the Supreme Court allowed the appeal and directed the Complaint to be returned to the Complainant/Respondent for refiling in the appropriate Court in Bangalore, Karnataka. The Court clarified that if the Complaint is re-filed in Bangalore within 30 days, it would be deemed filed within the limitation period. The interim orders were recalled accordingly, and the parties were ordered to bear their respective costs.