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2016 (4) TMI 2 - HC - Indian LawsMetropolitan Magistrate, Ahmedabadterritorial jurisdiction to try the offence of dishonour of cheque, punishable under Section 138 of Negotiable Instruments Act, 1881 - Held that - In the case in hand, there is no question of presenting the cheque for payment over the counter because the cheque is crossed. When a cheque is crossed, the holder cannot encash it at the counter of the bank. The payment of such cheque is only credited to the bank account of the payee. A cheque is either open or crossed . An open cheque can be presented by the payee to the paying banker and is paid over the counter. A crossed cheque cannot be paid across the counter but must be collected through a banker. A crossing is a direction to the paying banker to pay the money generally to a banker or to a particular banker, and not to pay otherwise. The object of crossing is to secure payment to a banker so that it could be traced to the person receiving the amount of the cheque. Crossing is a direction to the paying banker that the cheque should be paid only to a banker or a specified banker. To restrain negotiability, addition of words Not Negotiable or Account Payee Only is necessary. A crossed bearer cheque can be negotiated by delivery and crossed order cheque by endorsement and delivery. Crossing affords security and protection to the holder of the cheque. Thus, in view, the learned Metropolitan at Ahmedabad has the jurisdiction to try the case instituted by the complainant for the dishonour of the cheque.
Issues Involved:
1. Territorial Jurisdiction of the Court. 2. Applicability of the Negotiable Instruments (Amendment) Act, 2015. 3. Interpretation of Section 142(2) and 142A of the Negotiable Instruments Act. 4. Impact of the Supreme Court's decision in Dashrath Rupsingh Rathod v. State of Maharashtra. 5. Explanation and application of the deeming provision in Section 142(2). Issue-wise Detailed Analysis: 1. Territorial Jurisdiction of the Court: The primary issue was whether the Court of the learned Metropolitan Magistrate, Ahmedabad, had the territorial jurisdiction to try the offence of dishonour of cheque under Section 138 of the Negotiable Instruments Act. The applicants contended that since the entire transaction occurred in Uttar Pradesh, the complaint should be filed there. The respondent argued that due to a centralized pooling account in Ahmedabad, the complaint was rightly filed in Ahmedabad. 2. Applicability of the Negotiable Instruments (Amendment) Act, 2015: The judgment considered the impact of the Negotiable Instruments (Amendment) Act, 2015, which changed the jurisdiction to file complaints for dishonour of cheques. The amendment superseded the Supreme Court's judgment in Dashrath Rupsingh Rathod v. State of Maharashtra, which had restricted jurisdiction to the place where the cheque was dishonoured. 3. Interpretation of Section 142(2) and 142A of the Negotiable Instruments Act: The amendment introduced Section 142(2), allowing complaints to be filed in the Court where the payee's bank is located if the cheque is delivered for collection through an account. Section 142A provided for the transfer of pending cases to the appropriate jurisdiction as per the new provisions. The Court interpreted these sections to mean that the complaint could be filed where the payee's bank branch is situated, in this case, Ahmedabad. 4. Impact of the Supreme Court's Decision in Dashrath Rupsingh Rathod v. State of Maharashtra: The Supreme Court's decision in Dashrath Rupsingh Rathod had limited the jurisdiction to the place where the cheque was dishonoured. However, the amendment in 2015 changed this position, allowing complaints to be filed where the payee's bank is located. The judgment clarified that the amendment took precedence over the Supreme Court's decision. 5. Explanation and Application of the Deeming Provision in Section 142(2): The Court explained that the deeming provision in Section 142(2) meant that a cheque delivered for collection at any branch of the payee's bank is deemed to be delivered at the branch where the payee maintains the account. This interpretation supported the respondent's argument that the complaint was rightly filed in Ahmedabad, where the centralized pooling account was located. Conclusion: The Court concluded that the learned Metropolitan Magistrate at Ahmedabad had the jurisdiction to try the case. The application to quash the proceedings was rejected, and the trial Court was directed to proceed with the case expeditiously. The judgment emphasized that the amendment aimed to balance the interests of the payee and the drawer, ensuring that complaints are filed in a consistent jurisdiction to prevent harassment of the drawer.
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