2020 (1) TMI 201 - HC - Indian Laws

Dishonor of cheque - section 138 of NI Act - Maintainability of complaint - territorial jurisdiction - delay in filing complaint - appellant had re-presented its complaint but the same was not entertained, as it was filed beyond the period as stipulated by the court where it was initially filed, while returning the complaint - whether the appellant could maintain its complaint as re-presented? - HELD THAT - There is no dispute that the complaint filed by the appellant before the learned Metropolitan Magistrate, Patiala House Courts was not maintainable at the material time, as the said Court did not have the jurisdiction to entertain the said complaint when it was instituted. The cheques in question were drawn on Vijaya Bank, Defence Colony Branch, New Delhi. The appellant had presented the cheques through its banker IDBI Bank, Nehru Palace Branch. The complaint was filed before the learned M.M. Patiala House as the cause of action was stated to have arisen within the jurisdiction of Police Station Kalkaji New Delhi, that is, where the complainant s bank (IDBI Nehru Palace) where the cheques in question were deposited is located. It was not open for the appellant to file its complaint before the learned M.M., Patiala House Courts, who did not have territorial jurisdiction over the place where the respondent s bank was located (that is, Defence Colony, New Delhi) - Admittedly, in this case, the complaint had not reached the stage of Section 145(2) of the NI Act and thus, at the material time, the learned M.M., Patiala House Courts did not have the jurisdiction to try the said complaint. In terms of Section 142 (A) of the NI Act, as amended by the Negotiable Instrument (Amendment) Act, 2015 which was enacted with retrospective effect from 15.06.2015 all cases transferred under the Negotiable Instruments (Amendment) Ordinance, 2015 were deemed to have been transferred under the NI Act. There is no dispute that if the appellant s complaint was pending before the learned M.M. (Patiala House Courts) or had been re-filed before the Learned MM, South East, Saket Courts the appellant could have the benefit of Section 142(A) (1) of the NI Act as inserted by the Negotiable Instruments (Amendment) Ordinance 2015. However, the said ordinance is of little assistance to the appellant since the said case was neither pending before the learned M.M. Patiala House Court nor before the court of learned MM, South East Distt. as on 15th June, 2015, that is, the date on which the said ordinance came into force. The appellant s complaint stood returned to the appellant by virtue of the order dated 25th August, 2018 passed by the learned M.M. This Court is also of the view that the aforesaid contention is without merit. The logical sequitur of accepting the above contention would be that even if the appellant had not re-filed the said complaint, its complaint would, nonetheless, be required to be adjudicated as a pending case. The present petition seeking leave to appeal against the impugned judgment is dismissed.

Summary

Issues Involved:
1. Whether the appellant could maintain its complaint as re-presented.
2. Whether the complaint was barred by limitation.
3. Whether the Negotiable Instruments (Amendment) Ordinance, 2015 applied to the case.
4. Whether the appellant's contention of awaiting the Supreme Court's decision justified the delay in re-filing the complaint.
5. Whether the cheques were issued as consideration or security.

Detailed Analysis:

Issue 1: Whether the appellant could maintain its complaint as re-presented.

The primary issue was whether the appellant could maintain its complaint under Section 138 of the Negotiable Instruments Act, 1881, as re-presented. The complaint was initially dismissed by the Learned Metropolitan Magistrate (MM) because it was filed beyond the stipulated period after being returned for lack of jurisdiction. The appellant had re-presented the complaint after approximately one year and two months, whereas it should have been re-filed within thirty days as per the Supreme Court's directive in Dashrath Rupsingh Rathod v. State of Maharashtra: (2014) 9 SCC 129.

Issue 2: Whether the complaint was barred by limitation.

The complaint was dismissed on the ground of being barred by limitation. The MM held that the complaint was to be re-filed within thirty days from the date of the order returning the complaint, which was 25th August 2014. The appellant re-filed the complaint on 4th November 2015, well beyond the stipulated period. The appellant contended that it awaited the Supreme Court's decision in its appeal, but the court found this argument unmerited as the appellant had taken steps to revive the complaint and the trial court had already resumed proceedings.

Issue 3: Whether the Negotiable Instruments (Amendment) Ordinance, 2015 applied to the case.

The appellant argued that the Negotiable Instruments (Amendment) Ordinance, 2015, which came into effect on 15th June 2015, should apply. This ordinance allowed pending cases to be transferred to the court with proper jurisdiction. However, the court noted that the appellant’s complaint was neither pending before the MM, Patiala House Court nor re-filed before the MM, South East, Saket Courts as of the date the ordinance came into force. Therefore, the ordinance did not assist the appellant.

Issue 4: Whether the appellant's contention of awaiting the Supreme Court's decision justified the delay in re-filing the complaint.

The appellant contended that it did not re-file the complaint within thirty days of the MM's order because it awaited the Supreme Court's decision in its appeal. The court found this argument unconvincing, noting that the Supreme Court had directed the trial court to proceed with the complaint without passing a final judgment. The appellant had already taken steps to revive the complaint, and there was no stay on the proceedings. The delay in re-filing was not justified.

Issue 5: Whether the cheques were issued as consideration or security.

The respondents argued that the cheques were issued as security for due performance and could only be encashed upon non-utilization of quota. They contended there was no enforceable liability when the cheques were presented. However, this issue was secondary to the primary question of whether the complaint was maintainable and within the limitation period.

Conclusion:

The court concluded that the appellant's complaint was rightly dismissed as barred by limitation. The appellant failed to re-file the complaint within the stipulated thirty-day period after it was returned by the MM. The Negotiable Instruments (Amendment) Ordinance, 2015, did not apply as the complaint was not pending in any court when the ordinance came into effect. The appellant's argument of awaiting the Supreme Court's decision was unmerited, and the delay in re-filing was unjustified. The petition seeking leave to appeal against the impugned judgment was dismissed.