2025 (4) TMI 2 - HC - Indian Laws

Dishonour of Cheque - insufficient funds - proceedings had reached the stage of Section 145(2) of the Negotiable Instruments Act and if so whether the case should continue in the court where it was initially filed? - HELD THAT - It is evident that the parties had a business relation and the accused incurred a monetary liability for which he issued one account payee Cheque in favour of the present petitioner complainant company. The said cheque being dishonoured for having insufficient fund the petitioner had to rush to the court with a complaint under section 138 of Negotiable Instrument Act 1881. On the basis of the complaint The Learned Court of ACJM Bidhannagar took cognizance and after completion of his S/A issued the summons under section 204 of CrPc. On receiving the said summons the opposite party No.1 /accused person entered appearance and prayed for Bail. In the decision of the Hon ble apex court in Indian bank Association and others v union of India and others 2014 (5) TMI 750 - SUPREME COURT it was observed that Section 145 of the N.I Act is a rule of procedure which lays down the manner in which the evidence of the complainant may be recorded and once the court issued summons and the presence of the accused is secured an option be given to the accused whether at that stage he would be willing to pay the amount due along with reasonable interest and if the accused is not willing to pay the Court may fix up the case at an early date and ensure day-to-day trial. Section 145 of the Negotiable Instrument Act lays down the procedure of giving evidence as such this section is more of a procedural law and not a substantive law. This provision was introduced in order to expedite the hearing of cases filed under Negotiable Instrument Act. The court dealing with a complaint under section 138 of the said Act has an option to take evidence on the one side of the prosecution as well as the defence witnesses and if any on affidavit after an application is made by the other party under subsection (2) of section 145. Conclusion - The jurisdiction for cases under Section 138 of the Negotiable Instruments Act is determined by the location of the drawee bank unless the trial has commenced under Section 145(2). This criminal revisional application stands allowed.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment include:

Whether the complaint under Section 138 of the Negotiable Instruments Act, 1881 was filed in the appropriate jurisdiction.
Whether the learned Additional Chief Judicial Magistrate, Bidhannagar, correctly interpreted the Supreme Court's decision in Dasharath Roop Singh Rathore regarding the jurisdictional requirements for cases under Section 138 of the Negotiable Instruments Act.
Whether the proceedings had reached the stage of Section 145(2) of the Negotiable Instruments Act, and if so, whether the case should continue in the court where it was initially filed.
Whether the actions of the learned court left the complainant without a remedy, despite the accused having appeared and pleaded "not guilty."

2. ISSUE-WISE DETAILED ANALYSIS

Jurisdiction under Section 138 of the Negotiable Instruments Act

Relevant legal framework and precedents: The legal framework involves Section 138 of the Negotiable Instruments Act, which addresses the dishonor of cheques, and the Supreme Court's decision in Dasharath Roop Singh Rathore, which clarified jurisdictional issues for such cases.
Court's interpretation and reasoning: The Court noted that the learned Additional Chief Judicial Magistrate, Bidhannagar, returned the complaint based on the Supreme Court's decision in Dasharath Roop Singh Rathore, which mandates that cases should be filed where the drawee bank is located unless the trial has commenced under Section 145(2).
Key evidence and findings: The Court found that the accused had appeared and pleaded "not guilty," but the evidence stage had not commenced under Section 145(2) of the Negotiable Instruments Act.
Application of law to facts: The Court determined that the proceedings had not reached the stage of Section 145(2), and thus the complaint should have been filed in the jurisdiction where the cheque was dishonored.
Treatment of competing arguments: The Court considered the argument that the complainant was left remedy-less due to the misinterpretation of the Supreme Court's decision and concluded that the learned court should have proceeded with the case.
Conclusions: The Court concluded that the learned Additional Chief Judicial Magistrate, Bidhannagar, had jurisdiction to entertain the complaint and directed the court to proceed with the case expeditiously.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: The Court emphasized, "This amply clarifies the position that merely leading of evidence at the pre-summoning stage will not exclude the applicability of the decision of the Hon'ble Apex Court but only after recording of evidence at the post-summoning stage had commenced, when the proceeding will continue."
Core principles established: The judgment reinforced the principle that jurisdiction for cases under Section 138 of the Negotiable Instruments Act is determined by the location of the drawee bank unless the trial has commenced under Section 145(2).
Final determinations on each issue: The Court allowed the criminal revisional application, deeming the Additional Chief Judicial Magistrate, Bidhannagar, as the appropriate authority to entertain the complaint. The Court directed the case to proceed in accordance with the law as expeditiously as possible.

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