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2025 (4) TMI 747 - HC - Indian LawsDishonour of Cheque - territorial jurisdiction of Trial Magistrate to entertain the complaint under Section 138 of the Negotiable Instruments Act - HELD THAT - A complaint for offence under section 138 Negotiable Instruments Act can be inquired into and tried only by the court within whose local jurisdiction a cheque is delivered for collection i.e. the branch of the bank of the payee or the holder in due course or if the cheque is presented for payment otherwise through an account the location of the branch of the drawee bank where the drawer maintains the account would be determinative of the territorial jurisdiction. Reliance placed in the judgement of Supreme Court in the case of Bridgestone India Pvt. Ltd. v Inderpal Singh 2015 (12) TMI 777 - SUPREME COURT in which it has been held that Section 142(2) of the Negotiable Instruments Act amended by the Negotiable Instruments (Amendment) Second Ordinance 2015 leaves no room for any doubt specially in view of the Explanation thereunder that with reference to an offence under section 138 of the Negotiable Instruments Act the place where cheque is delivered for collection i.e. branch of the bank of the payee or holder in due course where the drawee maintains an account would be determinative of the place of territorial jurisdiction. Thus it is clear that inquiry trial or other proceedings in respect of a case under section 138 Negotiable Instruments Act can be held only by a court within whose local jurisdiction the cheque is delivered for collection i.e. the branch of the bank of the payee where the payee or the holder in due course as the case may be maintains the account. Adverting to the facts of the present case it is clear that the respondent/complainant had presented the cheque in his bank account maintained at ICICI Sector 128 Noida (UP) which is beyond the local territorial jurisdiction of the learned Trial Magistrate. It is not a case where the respondent/complainant had presented the cheque for payment otherwise through an account in that case even the location of the branch of drawee bank where the drawer maintains the account would have been determinative of the territorial jurisdiction. Thus it is clear that the learned Trial Magistrate did not have territorial jurisdiction to entertain the complaint which is subject matter of the present petition. Having held that the learned Trial Magistrate had no jurisdiction to entertain the complaint filed by the respondent against the petitioner and the co-accused and consequently he had no jurisdiction to issue process against the petitioner and the co-accused it is not necessary to go to the second ground of challenge urged by the learned counsel for the petitioner. Conclusion - The order of the Trial Magistrate is set aside due to lack of territorial jurisdiction. The complaint is ordered to be returned to the respondent for filing before the competent magistrate. Petition allowed.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Territorial Jurisdiction under Section 138 of the Negotiable Instruments Act Relevant Legal Framework and Precedents: The legal framework concerning territorial jurisdiction in cases under Section 138 of the Negotiable Instruments Act is governed by Section 142(2) of the same Act. It specifies that the complaint can only be inquired into and tried by a court within whose local jurisdiction the cheque is delivered for collection, i.e., the branch of the bank where the payee maintains the account. The Supreme Court in Bridgestone India Pvt. Ltd. v Inderpal Singh and Sh. Sendhuragro and Oil Industries v Kotak Mahindra Bank Limited has clarified this aspect. Court's Interpretation and Reasoning: The Court interpreted Section 142(2) to mean that the territorial jurisdiction is determined by the location of the bank branch where the cheque is presented for collection, not where the drawee bank is located. The Court emphasized that Section 142 starts with a non-obstante clause, indicating that it overrides the general provisions of the Code of Criminal Procedure regarding jurisdiction. Key Evidence and Findings: The complaint and the dishonor memo indicated that the cheque was presented for collection at ICICI Bank Limited, Sector 128, Noida, Uttar Pradesh, which is outside the territorial jurisdiction of the Trial Magistrate in Jammu. Application of Law to Facts: The Court applied Section 142(2) and concluded that since the cheque was presented in Noida, the Trial Magistrate in Jammu lacked jurisdiction. Treatment of Competing Arguments: The respondent's argument that the petitioner acquiesced to the jurisdiction by participating in proceedings was rejected. The Court held that jurisdiction cannot be conferred by consent or conduct if the court inherently lacks it. Conclusions: The Court concluded that the Trial Magistrate lacked territorial jurisdiction, rendering the proceedings void. 2. Acceptance of Preliminary Evidence by Affidavit Relevant Legal Framework and Precedents: The issue revolves around Section 145 of the Negotiable Instruments Act, which allows evidence to be given by affidavit, and Section 200 of the Cr.P.C., which typically requires the complainant's statement to be recorded on oath. Court's Interpretation and Reasoning: The Court did not delve deeply into this issue, as it was rendered moot by the jurisdictional finding. However, it was noted that Section 145 permits evidence by affidavit in proceedings under the Negotiable Instruments Act. Key Evidence and Findings: Not applicable due to the jurisdictional finding. Application of Law to Facts: Not directly addressed due to the primary jurisdictional ruling. Treatment of Competing Arguments: The Court did not need to resolve this issue given the jurisdictional decision. Conclusions: The Court did not make a determination on this issue due to the lack of jurisdiction. SIGNIFICANT HOLDINGS Preserve Verbatim Quotes of Crucial Legal Reasoning: The Court noted, "Having held that the learned Trial Magistrate had no jurisdiction to entertain the complaint filed by the respondent against the petitioner and the co-accused, and consequently he had no jurisdiction to issue process against the petitioner and the co-accused, it is not necessary to go to the second ground of challenge urged by the learned counsel for the petitioner." Core Principles Established: The judgment reaffirms the principle that territorial jurisdiction under Section 138 of the Negotiable Instruments Act is strictly determined by the location where the cheque is presented for collection, as per Section 142(2), and cannot be altered by the parties' conduct or consent. Final Determinations on Each Issue: The petition was allowed, and the order of the Trial Magistrate was set aside due to lack of territorial jurisdiction. The complaint was ordered to be returned to the respondent for filing before the competent magistrate. The issue of evidence by affidavit was not addressed due to the jurisdictional decision.
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