2021 (11) TMI 443 - HC - Indian Laws

Dishonor of Cheque - territorial jurisdiction of drawee bank - It is contended that since the drawee bank in this case is located in Baramulla District, as such, Judicial Magistrate at Srinagar had no jurisdiction to entertain the complaint and to take cognizance of offence - Section 138 Negotiable Instruments Act - HELD THAT - Sub-section(2) of Section 142 of the Act alongwith its explanation has been inserted in the Act by Amendment Act 26 of 2015 with effect from 15th of June 2015. This provision has modified the law as laid down in DASHRATH RUPSINGH RATHOD VERSUS STATE OF MAHARASHTRA ANOTHER 2014 (8) TMI 417 - SUPREME COURT , whereby it was held that the territorial jurisdiction for filing of cheque dishonour complaint is restricted to the court within whose territorial jurisdiction the offence is committed i.e., which is the location where the cheque is dishonoured or returned unpaid by the bank on which it is drawn. Coming to the instant case, though the cheques which are subject matter of the complaint before the trial Magistrate, are drawn on Jammu Kashmir Bank Limited Hard Aboora Baramulla yet the complainant has clearly stated that when these cheques were presented with his banker i.e., J K Bank Ltd. Branch Unit Zainakote Srinagar, the same were dishonoured. Thus, the cause of action for filing the complaint in the instant case has also arisen within the local limits of the court having jurisdiction over Srinagar City. Thus, it cannot be said that the Judicial Magistrate at Srinagar did not have jurisdiction to entertain the complaint and issue process against the petitioner. The ground urged by the petitioner in this regard is without any merit. In the present times when the postal authorities resort to service through speed post etc., it is not in the realm of impossibility that a notice dispatched from Srinagar on 1st February, 2018, would not reach its destination in Baramulla the very next day. In any case, it is a matter of trial as to whether the notice was actually served upon the petitioner and if so, on what date - Petition dismissed.

Summary

Issues:
Jurisdiction of the court to entertain a complaint under Section 138 of the Negotiable Instruments Act and the validity of legal notice of demand served.

Jurisdiction Issue Analysis:
The petitioner challenged the criminal complaint filed under Section 138 of the Act, arguing that the Magistrate had no jurisdiction to entertain the complaint as the bank on which the cheques were issued is located outside the Magistrate's jurisdiction. The petitioner relied on the Supreme Court judgment in Dashrath Rupsing Rathod v. State of Maharashtra, (2014) 9 SCC 129. However, Section 142(2) of the Act clarifies that the court within whose jurisdiction the cheque is presented for payment by the payer through his account also has jurisdiction to entertain the complaint. The court noted that the cheques were dishonored when presented at a bank branch in Srinagar, establishing the cause of action within the jurisdiction of the Srinagar court. Thus, the jurisdictional challenge by the petitioner was deemed without merit.

Legal Notice Issue Analysis:
The petitioner contested the validity of the legal notice of demand, claiming it was not served upon him. The complaint, however, stated that the notice was issued on a specific date and served the next day, supported by photocopies of postal receipts. The court acknowledged advancements in postal services like speed post, making it plausible for a notice dispatched on one day to reach its destination the next day. The court emphasized that the actual service of the notice would be determined during trial, and the Magistrate was not required to delve into this matter at the stage of issuing process against the accused. Consequently, the court found no merit in the petitioner's argument regarding the legal notice and dismissed the petition.

In conclusion, the High Court of Jammu and Kashmir upheld the jurisdiction of the Magistrate to entertain the complaint under Section 138 of the Negotiable Instruments Act, as the cause of action had arisen within the court's jurisdiction. Additionally, the court rejected the petitioner's challenge regarding the legal notice of demand, emphasizing that such matters would be addressed during trial and were not necessary considerations at the stage of issuing process against the accused. The petition was dismissed.