2022 (4) TMI 555 - HC - Indian Laws

Dishonor of Cheque - jurisdiction of the court for proceedings initiated on a complaint under Section 138 of the Negotiable Instruments Act, 1881 - HELD THAT - The law as it stands today as regard jurisdiction is that, trial of a case under Section 138 of the Act shall only be by a court within whose local jurisdiction a cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account is situated. As admitted by the respondent herein, the complaint was filed before a court lacking territorial jurisdiction and as such, there is no option for this Court, but to conclude that the Trial Court cannot proceed with the complaint against the petitioner herein. The cited cases referred by the learned counsel for the respondent would have no persuasive value before this Court as the provisions of the statute stares in the face of the matter in issue before this Court and as such, with due respect, the same cannot be taken into account in these proceedings. The consequential result is that the proceedings therein has to be set aside. Petition allowed.

Summary

Issues Involved:
1. Time-barred complaint under Section 138 of the Negotiable Instruments Act, 1881.
2. Territorial jurisdiction of the court handling the complaint.

Detailed Analysis:

Issue 1: Time-barred Complaint
The petitioner argued that the complaint filed by the respondent under Section 138 of the Negotiable Instruments Act, 1881 was time-barred. This issue was initially raised but not pressed during the proceedings. The respondent countered by stating that the debt arose from an agreement between the parties, which is governed by Section 25(3) of the Indian Contract Act. According to the respondent, even if the limitation period had expired, the claim could be revived under this section. The respondent cited several judgments to support this contention. However, since the petitioner did not press this issue during the hearing, the court did not make a decision on this point.

Issue 2: Territorial Jurisdiction
The primary contention was whether the court that took cognizance of the complaint had the territorial jurisdiction to do so. The petitioner argued that the complaint was filed in a court that lacked territorial jurisdiction. According to Section 142(2) of the Negotiable Instruments Act, 1881, the court with territorial jurisdiction is the one where the bank branch, where the payee or holder maintains an account, is situated. The petitioner maintained an account with the Meghalaya Co-Operative Apex Bank, Shillong Branch, which falls under the jurisdiction of the Chief Judicial Magistrate, Shillong. However, the complaint was filed before the Court of the Additional Deputy Commissioner (Judicial), Shillong, which covers areas outside Normal Shillong.

The respondent admitted that the complaint was filed in a court lacking territorial jurisdiction but argued that the Judicial Magistrate First Class, Shillong, has jurisdiction over both Normal Shillong and Tribal Shillong areas. The respondent also cited the case of Dashrath Rupsingh Rathod v. State of Maharashtra & Anr, where the Supreme Court held that cases pending in courts lacking jurisdiction fall into two categories: (1) cases where only summons have been issued, which should be returned to the complainant for filing in the proper court, and (2) cases where evidence has started, which should continue in the same court. The respondent's case fell into the second category since evidence had already been led.

The court noted that the dictum of the Supreme Court in Dashrath Rupsingh Rathod had been legislatively overruled by an amendment to the Negotiable Instruments Act in 2015. According to the amended Section 142(2), the trial of a case under Section 138 should be by a court within whose local jurisdiction the cheque is delivered for collection through an account. Since the complaint was filed in a court lacking territorial jurisdiction, the trial court could not proceed with the complaint. Consequently, the proceedings in C.R. Case No. 1(T) of 2018 were set aside and quashed.

Conclusion:
The petition was allowed, and the proceedings in C.R. Case No. 1(T) of 2018 were quashed due to lack of territorial jurisdiction. The respondent was advised to pursue the matter before a proper forum in accordance with the law. The matter was disposed of with no cost.