2017 (8) TMI 1688 - HC - Indian Laws

Dishonor of Cheque - jurisdiction of the Court to try a case initiated under Section 138 of the Negotiable Instrument Act - territorial jurisdiction - time limitation - HELD THAT - It was observed by their Lordships that the amended Section 142(2) leaves no room for any doubt that with reference to an offence under Section 138 of the Act the place the cheque was delivered for collection would be determinative of the place of territorial jurisdiction. The proceeding under Section 138 of the Act shall be only in the Court under whose jurisdiction the cheque was presented for encashment by the payee or holder in due course where the drawee maintains the account. This is irrespective of the fact as to whether the taking of evidence has commenced in course of trial or not as was observed in the case of Rupsingh Rathod 2014 (8) TMI 417 - SUPREME COURT . In view of the aforesaid settled position of law the findings of the learned Sessions Judge is not sustainable in law and is accordingly set aside confirming the order passed by the learned Trial Court. In view of the aforesaid findings the complaint shall be returned by the learned Trial Court to the complainant within a week of presentation of a certified copy of this order before the said Court by the present petitioner and the complainant shall be at liberty to file the same in the Court having competent jurisdiction according to law and it shall be accepted to have been filed within time if filed before the competent Court within thirty days from the date of return of the complaint to the complainant unless the initial or prior filling was itself time barred. Application allowed.

Summary

Issues:
Jurisdiction of the Court to try a case under Section 138 of the Negotiable Instrument Act.

Analysis:
The case involved an application under Section 482, Cr.P.C., challenging the order of the Sessions Judge setting aside the order of the J.M.F.C. The complaint alleged an offense under Section 138 of the Act due to a dishonored cheque. The J.M.F.C. held it had no jurisdiction as the cheque was presented in a different city. The Sessions Judge, considering the evidence already commenced, found jurisdiction in Cuttack based on legal precedents.

The revision challenged the Sessions Judge's order citing a subsequent Supreme Court decision in M/s. Bridgestone India Pvt. Ltd. v. Inderpal Singh. This case introduced Section 142-A, specifying jurisdiction based on the location where the cheque was delivered for collection. The amendment clarified that the trial must occur in the local jurisdiction of the bank branch where the payee maintains the account.

The Supreme Court, referencing the amended Section 142(2), emphasized that territorial jurisdiction is determined by the place the cheque was delivered for collection. The Court highlighted the non-obstante clause in Section 142-A, indicating that the provisions of the Negotiable Instruments Act prevail over the Code of Criminal Procedure. Thus, the Court concluded that the trial must take place where the cheque was presented for encashment, irrespective of the trial stage.

Consequently, the settled law dictates that a case under Section 138 of the Act must be tried in the jurisdiction where the cheque was presented for encashment. The Court overturned the Sessions Judge's decision, upholding the Trial Court's order. The complaint was to be returned to the complainant for filing in the appropriate jurisdiction within thirty days, as per the law.

In conclusion, the judgment clarified the jurisdictional aspect of cases under Section 138 of the Negotiable Instrument Act, emphasizing the location of the cheque's presentation for determining trial jurisdiction. The ruling highlighted the importance of legal amendments and precedents in guiding court decisions on jurisdictional matters.