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TMI Blog2017 (5) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... he sake of convenience, the Criminal Misc. Application No.9134 of 2016 is treated as the lead matter. 4. The applicants-original accused Nos.2,3 and 4 have prayed for the following reliefs; "(A) To quash and set aside the complaint being Criminal Case No.49661 of 2015 pending before the Hon'ble Court of 12th Additional Chief Judicial Magistrate, Vadodara at Annexure-A and to pass all incidental and consequential orders as may be deemed fit and proper. (B) To quash and set aside the bailable warrant issued on 05.03.2016 by the Hon'ble Court of 12th Additional chief Judicial Magistrate, Vadodara under section 138 of the Negotiable Instruments Act, 1881 Annexure-D to this application and to pass all incidental and consequential orders as may be deemed fit and proper. (C ) Pending admission, final hearing and disposal of this petition, to stay further proceedings of Criminal Case No.49661 of 2015 pending before the Hon'ble Court of 12th Additional Chief Judicial Magistrate, Vadodara. (D) Pending admission, final hearing and disposal of this petition, to stay bailable warrant issued on 05.03.2016 in Criminal Case No.49661 of 2015 by the Hon'ble Court of 12th Additional chief Jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany. It is pertinent to note that at the said relevant point being directors and responsible officers of the Company, all were aware about the financial position of the accused No.1 Company. Despite being aware of the week financial position of the accused No.1 company all the directors and responsible officers and authorized signatories, they all were involved in decision making process of continuing business transaction with the complainant company, advancing on their behalf through their agents, false promises to their knowledge that as and when the amount will be due to the complainant company, the same will be paid. It is also well settled that in addition to their fiduciary duties, the directors also owe a duty of care to the Company not to act negligently in the management of its affairs. A director may be shown to be so placed and to have been so closely and so long associated personally with the management of the Company that he will be deemed to be not merely cognizant of but liable for fraud in the conduct of the business of the Company even through no specific act of dishonesty is proved against him personally. He cannot shut his eyes to what must be obvious to ever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the said outstanding amount accused No.1 company had assured payment and payment & clearances of the outstanding amount vide many letters and assurances given therein, but to no avail. That in view of admitted liability, accused No.1 company had issued cheques with a view to clear liabilities towards the complainant company. Towards the aforesaid dues the accused No.5 and 6 had signed and issued three cheques from M/s. Modipon Fibre Company (a division of Modipon Ltd.) bearing Nos.(1) 943805 dated 29.06.2007 of Rs. 19,59,759/- (ii) 943806 dated 29.06.2007 of Rs. 19,59,759 and (iii) 943807 dated 29.06.2007 of Rs. 19,59,759/- drawn on Karnataka Bank Ltd., New Delhi Branch. The cheques were issued in favour of the complainant company with an implied assurance that the cheques would be honoured and payment shall be duly made. 7. Despite various correspondences with the Company, the outstanding amount was not cleared and, therefore, the complainant again required and called upon the Accused No.1 company to clear the outstanding but the accused No.1 company informed that it was in financial trouble and therefore, was in no position to clear the outstanding and that the same wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the accused have unequivocally committed offence under section 138 read with section 141 of the Negotiable Instruments Act, 1881. 11. The notices dated 07.11.2007 were sent to all the accused on 08.11.2007 and replies in respect of the notices were received by the advocate of the complainant on various dates starting from 21.11.2007 and the last reply was received on 13.12.2007 and the complaint has bee filed today and therefore, the same is within the period of limitation. It is further stated that despite the notices served upon all the accused under the provisions of Negotiable Instruments Act 1881, all the accused deliberately did not make any arrangement towards clearance of the said cheques and have given evasive reply not tenable in the eye of law, only with a view to avoid discharging the admitted debts and liability, that all the accused owed towards the complainant. All the accused had replied vide reply of notice dated 24.11.2007 which was received by the advocate of the complainant on 28.11.2007, through their advocates Op. Khaitan and Co. Further, all the accused had issued Corrigendum dated 28.11.2007 to clear certain typographical error of their earlier rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arance, and the Corporation Bank informed the complainant that all the cheques had been dishonoured to the account maintained by the complainant with the Bank of Baroda, Fertilizers Nagar Branch, Vadodara. 8. In such circumstances referred to above, the complainant issued the statutory notice to the accused persons, and as the amount was not paid, ultimately, thirty complaints came to be filed for the offence under section 138 of the N.I. Act in the court of the learned 12th Additional Chief Judicial Magistrate, Vadodara. 9. It is the case of the applicants that the complaints, for the dishonour of the cheques, could not have been filed in the court of the 12th Additional Chief Judicial Magistrate, Vadodara as the territorial jurisdiction to try the complaints would be with the court at New Delhi. This is the sum and substance of all the applications on hand. Submissions on behalf of the applicants: 10. 10. Mr. Deven Parikh, the learned senior counsel appearing for the applicants has filed his submissions in writing. The submissions are as under; 10.1 A perusal of Section 142(2) demonstrates that it is in two parts. It either gives jurisdiction to the Court where the payees b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the jurisdiction of the court where his account is actually situated. In such circumstances, the legislature has thought it fit to grant jurisdiction to the courts where the drawee bank is situated. 10.9 In the present case admittedly, the GSFC has its account in the Bank of Baroda at Vadodara. It has however not deposited the cheques drawn by the applicant for collection either in its account in the Bank of Baroda at Vadodara nor has it deposited the same for collection in any other branch of Bank of Baroda, anywhere in the Country. Clearly, therefore, this is not a case falling under 142(2)(a) or the explanation. 10.10 The GSFC has not chosen to use its bank or its bank account but has chosen its independent agreement and arrangement with the Corporation Bank, New Delhi for the purpose of deposit and presentation of the cheque. Such a situation falls under 142(2)(b). 10..11 The GSFC'S detailed arrangement with the Corporation Bank, New Delhi is demonstrated by the documents from page 45 to 63 of the further Affidavit filed by the GSFC itself. The following salient features emerge: a). The arrangement needs a separate Board Resolution (page 45), a separate exposure and credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cheque even the proceeds of the cheque if encashed would have gone to the Corporation Bank. 10.12 The aforesaid demonstrates, a completely independent mechanism between the GSFC and the Corporation Bank, New Delhi for the deposit and collection of the cheques. This agreement is not even remotely connected to the BOB account of the GSFC. In the new banking world, there may be various ways for presenting a cheque for collection, otherwise than through the payee's account. The present is one such arrangement in the modern banking world. 10.13. All such arrangements where the payee does not use his account or his bank will fall under Section 142(2)(b). 10.14. The argument that Section 142(2)(b) deals with the bearer cheques whereas Section 142(2)(a) deals with cross or cross order cheques is clearly not palatable. 10.15. Nothing stopped the legislature from providing that Section 142(2)(b) deals with the bearer cheques. The absence of such language demonstrates that the legislature wanted to cover all kinds of situations where a cheque is presented otherwise than through an account. 10.16 More importantly a scheme of the Negotiable Instruments Act and more Specifically Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(2)(a). As a matter of fact, the argument that the case fell under Section 142(2)(b) was specifically rejected. 10.21. It is submitted that even in the context of the present interpretation, this Court arrived at the correct conclusion as it was dealing with Section 142(2)(a) read with the explanation, and in that case the IClCl where themselves the Complainant's bankers. In light of the explanation, it may be little different whether the cheque was deposited in their own account of lClCI bank or in any other branch of their bank. 10.22. The aforesaid judgment has no application to Section 142(2)(b). inasmuch as the said Sub-Section was not being considered. The observations cannot be taken to be an absolute proposition of law laid down in the context of the said sub-section. 10.23. When the Court was not dealing with the said sub- section, the judgment cannot be read as if the court was considering all the possibilities that may ever fall under the said sub-section. The Court only gave an example that the situation where a bearer cheque is presented over the counter could be a situation falling under 142(2)(b). The court started giving an example on page 12 and in continuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he applications have been vehemently opposed by Mr. K.S. Nanavati, the learned senior counsel appearing for the complainant. Mr. Nanavati has also filed his submissions in writing. The submissions are as under; 12.1. The cheques issued by the accused are Crossed "Account Payee only" cheques, drawn on the Karnataka Bank Ltd in favour of the Complainant. For collection of the cheques, the banker of the Complainant is the Corporation Bank with which the Complainant has entered into arrangement of Fast Collection Services (FCS). Under this arrangement, the Complainant has to deposit the cheques for collection at any of the operating branches of the Corporation Bank. The Corporation Bank has assigned a "Customer Code (GFC 563)". All the cheques delivered for collection to the Corporation Bank would be reflected in the Account of the complainant. On the amount being collected, the collection would get credited in the Pooled Account No. 02090500000002 with the Pooling Branch of Bank of Baroda. 12.2. On such facts, the case clearly falls under Section 142(2)(a). Section 142(2) seeks to define the jurisdiction to try offences under section 138 of dishonoured cheques. The jurisdiction is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arer cheque". Apart from the fact that in the event of the cheque being a bearer cheque, the payee would have to deliver the cheque to the drawer's bank for payment "otherwise through an account" that is over the counter, and cannot be deposited in payee's account (like an account payee cheque) as suggested by the applicants. 12.7. Even otherwise, in the instant case such issue does not arise because as is apparent from the pleadings the collecting Bank i.e. Corporation Bank does maintain an account of the Complainant bearing Code No. GFC 563. 12.8. The submission of the accused that there is no distinction between the cross and bearer cheques and both are negotiable instruments and have to be presented to the drawee has no relevance to the interpretation. Both are undoubtedly negotiable instruments, however, both are treated separately by the Act in so far as how the payment is to be made is concerned, which Section 142 (2) seeks to bifurcate. 12.9. The case of the Complainant is fully covered by the Judgement of this Court in Criminal Miscellaneous Application No. 13062 of 2011 dated 30.03.2016 and in particular paragraphs 19, 28, 29, 41 and 42 where the Court has in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch facility, the daily fund/ amount is, collected from all Centers and credited in the said Account No. 02090500000002 at Bank of Baroda, Vadodara. Annexed hereto and marked as Annexrure-RI is a copy of a Certificate dated 07.09.2015 with Annexure A thereto issued by the Senior Manager of Corporation Bank, Ahmedabad certifying that the cheques listed at Annexure A to the said Certificate had been deposited and dishonored to the said Account No. 02090500000002 at Bank of Baroda, Vadodara. I say that the impugned cheques were deposited in New Delhi only to facilitate collection so that the amount is credited in the said Account No. 02090500000002 maintained by Respondent No. 2 at Bank of Baroda, Vadodara. 9. With reference to para 10 of the Application, I reproduce for ready reference the Explanation to S. 142(2) of the Negotiable InStruments Act, 1881 (hereinafter referred to as "the Act") after the amendment dated 26. 12.2015: Explanation: For the purpose of Clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the Beneficiary. This is merely an arrangement or method or facility of pooling cheques deposited at various branches of Corporation Bank across the Country for crediting in Bank Account No. 02090500000002 ("Central Pooling Account") maintained by Respondent No.2 with Bank of Baroda, Fertilizer Nagar, Vadodara. I say that, for this purpose, Respondent No.2 has been a given a Customer Code "GFC 563" for availing such service. Annexed hereto and marked as Anenxure-R3 (Colly.) are copies of Pay-in- Forms dated 17.10.2007 reflecting the said Customer Code GFC 563 and details of the cheques in question and copies of some cheques that got dishonoured with their Return Memos. For availing this service, the beneficiary need not have any bank account with Corporation Bank at any place in India including New Delhi. Instead, the Customer Code allotted is sufficient for effective functioning of the facility. 5. Thus, the total amount of the previous day's cheques so deposited gets reflected in the said Central Pooling Account even before the cheques so deposited get realized or dishonoured. In case of dishonour of a cheque deposited with any FCS Corporation Bank branch anywhere in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... havmg terrirorial jurisdiction over Bank of Baroda, Fertilizer Nagar Branch, Vadodara alone shall have territorial jurisdiction in the present matter as Respondent No.2 maintains the said Central Pooling Account where the amounts of the dishonoured cheques under FCS would have been credited, had the same been honoured on presentment. " ANALYSIS 15. Having heard the learned counsel appearing for the parties and having considered the materials on record, the only question that falls for my consideration is whether the 12th Additional Chief Judicial Magistrate, Vadodara has the territorial jurisdiction to try the complaints filed by the complainant under section 138 of the N.I. Act. 16. In the case of Brijendra Enterprise (supra), I had the occasion to consider the issue of territorial jurisdiction of a court to try the offence under section 138 of the N.I. Act having regard to the amended provisions of section 142 of the N.I. Act. In the said case, the cheque was drawn by the accused on an account maintained by him with the Union Bank of India, Badalapur, Dist: Jaunpur, State of U.P. The complainant deposited the cheque with the ICICI Bank Ltd., Gorakhpur Branch, Gorakhpur, Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act, which has been inserted by the new Ordinance referred to above. According to the new Ordinance, even the pending cases would stand transferred to the Courts. In Dashrath Rupsingh Rathod (supra), a three Judge bench of the Supreme Court took the view that a complaint for dishonour of cheque can be filed only in a Court which has the territorial jurisdiction over the place where the cheque is dishonoured by the bank on which it is drawn. Thus, if a cheque is drawn by a person of the account maintained with his bank at Ahmedabad, the complaint for dishonour in respect of such cheque could be filed only in a Court at Ahmedabad within whose territorial jurisdiction the said bank is located. According to the decision of the Supreme Court, such a case cannot be filed in any other Court at any other place. For example, if 'X' is the payee of the cheque and if he presents a cheque for clearing at Vadodara, it cannot be filed at Vadodara. The judgment of the Supreme Court proceeded on the footing that the payee of a cheque should not necessarily harass the drawer of the cheque by filing complaint for dishonour at the place of his choice by deliberately choosing a differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section (2) of Section 142 or the case has been transferred to that Court under sub-section (1), and such complaint is pending in that Court, all subsequent complaints arising out of Section 138 against the same drawer shall be filed before the same Court irrespective of whether those cheques were delivered for collection or presented for payment within the territorial jurisdiction of that Court. (3) If, on the date of the commencement of the Negotiable Instruments (Amendment) Ordinance, 2015, more than one prosecution filed by the same payee or holder in due course, as the case may be, against the same drawer of cheques is pending before different Courts, upon the said fact having been brought to the notice of the Court, such Court shall transfer the case to the Court having jurisdiction under sub-section (2) of Section 142 before which the first case was filed and is pending, as if that sub-section had been in force at all material times." The Negotiable Instruments (Amendment) Ordinance, 2015 (Ordinance 6 of 2015) came to be replaced with the Negotiable Instruments (Amendment) Bill, 2015. The Negotiable Instruments (Amendment) Bill, 2015, inter alia, provides for the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on according to the amendment : 1. 'A' holds an account with the Navrangpura Branch, Ahmedabad, of 'XYZ' Bank, issues a cheque payable at par in favour of 'B'. 'B' holds an account with the M.S. University Road Branch, Vadodara, of the 'PQR' Bank, deposits the said cheque at the Surat Branch of the 'PQR' Bank and the cheque is dishonoured. The complaint will have to be filed before the Court having the local jurisdiction where the M.S.University Road Branch, Vadodara, of the 'PQR' Bank is situated. 2. 'A' holds an account with the Navranpura Branch, Ahmedabad, of 'XYZ' Bank, issues a cheque payable at par in favour of 'B'. 'B' presents the said cheque at the Vadodara Branch of the 'XYZ' Bank (but 'B' does not hold account in any branch of the 'XYZ' Bank) and the cheque is dishonoured. The complaint will have to be filed before the Court having the local jurisdiction where the Navrangpura Branch, Ahmedabad, of the 'XYZ' Bank is situated. Therefore, to summarise, first, when the cheque is delivered for collection through an account, the complaint is to be filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt with the same. It was dishonoured with the intimation funds insufficient. However, as explained by the complainant, the complainant was to receive the credit of the said cheque at the centralized pooling account in Ahmedabad. Since the cheque could not be cleared, the intimation regarding the same was given by the ICICI Bank Limited, JMC House, Ahmedabad Branch, to the complainant at its address of the registered office in Ahmedabad. Whatever may be the arrangement of the complainant with its banker, could it be said that the cheque was deposited in the ICICI Bank Limited at Ahmedabad i.e. the branch which actually gave intimation to the complainant regarding the dishonour of the cheque. The argument canvassed on behalf of the complainant is that since the requisite cheque amount was to be credited in the account maintained by the company with the ICICI Bank Limited at Ahmedabad and the intimation of dishonour was also by the branch of the ICICI Bank Limited at Ahmedabad, his complaint at Ahmedabad in the Court of the learned Metropolitan Magistrate is maintainable. Before adverting to the rival submissions canvassed on either side, let me look into the decision of the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons drawn by this Court in paragraph 58, which is extracted hereunder: "58. To sum up: 1.An offence under Section 138 of the Negotiable Instruments Act, 1881 is committed no sooner a cheque drawn by the accused on an account being maintained by him in a bank for discharge of debt/liability is returned unpaid for insufficiency of funds or for the reason that the amount exceeds the arrangement made with the bank. 2.Cognizance of any such offence is however forbidden under Section 142 of the Act except upon a complaint in writing made by the payee or holder of the cheque in due course within a period of one month from the date the cause of action accrues to such payee or holder under clause (c) of proviso to Section 138. 58.3 The cause of action to file a complaint accrues to a complainant/payee/holder of a cheque in due course if (a) the dishonoured cheque is presented to the drawee bank within a period of six months from the date of its issue. (b) If the complainant has demanded payment of cheque amount within thirty days of receipt of information by him from the bank regarding the dishonour of the cheque, and (c) If the drawer has failed to pay the cheque amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as sub-section (1) thereof and after sub-section (1) as so numbered, the following subsection shall be inserted, namely:- (2) The offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction,-- (a) if the 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; or (b) if the cheque is presented for payment by the payee or holder in due course otherwise through an account, the branch of the drawee bank where the drawer maintains the account, is situated. Explanation For the purposes of clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains the account." 4. In the principal Act, after section 142, the following section shall be inserted, namely:- 142A. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 or any judgment, decree, order or directions of any court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruments Act. A perusal of Sub-section (1) thereof leaves no room for any doubt, that insofar as the offence under Section 138 of the Negotiable Instruments Act is concerned, on the issue of jurisdiction, the provisions of the Code of Criminal Procedure, 1973, would have to give way to the provisions of the instant enactment on account of the non-obstante clause in sub-section (1) of Section 142A. Likewise, any judgment, decree, order or direction issued by a Court would have no effect insofar as the territorial jurisdiction for initiating proceedings under Section 138 of the Negotiable Instruments Act is concerned. In the above view of the matter, we are satisfied, that the judgment rendered by this Court in Dashrath Rupsingh Rathod's case would also not non-suit the appellant for the relief claimed. 12. We are in complete agreement with the contention advanced at the hands of the learned counsel for the appellant. We are satisfied, that Section 142(2)(a), amended through the Negotiable Instruments (Amendment) Second Ordinance, 2015, vests jurisdiction for initiating proceedings for the offence under Section 138 of the Negotiable Instruments Act, inter alia in the territor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any branch of the ICICI Bank anywhere in the country without there being any account being maintained in the said branch. The branch bank which accepts the cheques will thereafter process the same, and as explained above, the credit of the requisite amounts mentioned in the cheque would be given in the centralized pooling account, i.e. like in the present case, in the centralized pooling account maintained by the complainant at Ahmedabad. At this stage, it is important to look into the explanation in Section 142(2). The explanation provides that for the purposes of clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or the holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or the holder in due course, as the case may be, maintains the account. For example, like in the present case, the cheque was delivered for collection at the ICICI Bank, Gorakhpur branch, Uttar Pradesh, where the complainant has no account but, by virtue of the said explanation, it is deemed to have been delivered at the ICICI Bank, JMC House Branch, Ahmedabad, where the account is maintained. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lain cl. (1)(a) of the Article and not vice versa . It is an error to explain the Explanation with the aid of the Article, because this reverses their roles." In Bihar Co-operative Development Cane Marketing Union Ltd. v. Bank of Bihar (1967) 1 SCR 848 : (AIR 1967 SC 389), the Supreme Court observed thus : "The Explanation must be read so as to harmonise with and clear up any ambiguity in the main section. It should not be so construed as to widen the ambit of the section." In Hiralal Rattanlal etc. v. State of U.P. [(AIR 1973 SC 1034)], the Supreme Court observed thus : "On the basis, of the language of the Explanation this Court held that it did not widen the scope of clause (c). But from what has been said in the case, it is clear that if on a true reading of an Explanation it appears that it has widened the scope of the main section, effect be given to legislative intent notwithstanding the fact that the legislature named that provision as an Explanation. " In Dattatraya Govind Mahajan v. State of Maharashtra [(1977) 2 SCR 790: (AIR 1977 SC 915), the Supreme Court observed thus : "It is true that the orthodox function of an explanation is to explain the meaning and eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icon by P.Ramanatha Aiyar, 4th Edition 2010 Vol.2). I find it difficult to accept the argument of the learned counsel appearing for the accused that the case in hand is covered by Section 142(2)(b). The argument is that as the cheque was delivered for collection at the ICICI Bank, Gorakhpur branch, Uttar Pradesh, without any account maintained in the said branch, it could be said that the cheque was presented for payment by the complainant otherwise through an account, and if that be so, the complaint for dishonour could be filed in a Court within whose local jurisdiction the branch of the drawee bank where the drawer maintains the account, is situated. In my view, the words otherwise through an account would mean that the cheque is presented for payment over the counter. In the case in hand, there is no question of presenting the cheque for payment over the counter because the cheque is crossed. When a cheque is crossed, the holder cannot encash it at the counter of the bank. The payment of such cheque is only credited to the bank account of the payee. A cheque is either 'open' or 'crossed'. An open cheque can be presented by the payee to the paying banker and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls the Court, and prior judgments tell this present Court, what the object of the Legislature was, the Court is to see whether the terms of the section are such as fairly to carry out that object and no other, and to read the section with a view to finding out what it means, and not with a view to extending it to something that was not intended." 21. It is significant to note that the traditional English view earlier held that the Legislative intent is not to be gathered from the Parliamentary history and felt that the introduction of the measures in Parliament cannot be used as evidence for the purpose of showing the intention. The Law then gradually changed its course and it was held that the courts are entitled to consider such external or historical facts as may be necessary to understand the subject matter to which the statute relates. The House of Lords in Black-Clawsan International Ltd. v. Papierwerke Waldhof-Aschaffenburg, A.G., [(1975)1 All ER 810 (HL)]1 unanimously held that the report of a committee presented to the Parliament preceding the legislation could be seen for finding out the then state of the law and the mischief required to be remedied. The earlier traditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Its interpretation should not be permitted or allowed to defeat the substantial justice. 24. The attendant circumstances and external aids being some of the tools available with the court for interpretation of a statute, their application has been largely accepted. In the case of Sub-Committee on Judicial Accountability v. Union of India and others, 1991 (4) SCC 699, the Constitution Bench of Supreme Court took the view that it was permissible to take into consideration the entire background as aid to interpretation and that it was a well settled principle of modern statutory construction that external aid could be used to discover the object of legislation particularly when internal aids are not forthcoming. Similar view was also accepted by the Supreme Court in the case of Shashikant Laxman Kale and another v. Union of India and another, (1990)4 SCC 366, where the court held as under:- "For determining the purpose or object of the legislation, it is permissible to look into the circumstances which prevailed at the time when the law was passed and which necessitated the passing of that law. For the limited purpose of appreciating the background and the antecedent factual matri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 with effect from 1st April, 1989. Section 138 of the said Act provides for penalties in case of dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque. 2. As Sections 138 to 142. of the said Act were found deficient in dealing with dishonour of cheques, the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002, inter alia, amended Sections 138,141 and 142 and inserted new Sections 143 to 147 in the said Act aimed at speedy disposal of cases relating to dishonour of cheque through their summary trial as well as making, them compoundable. Punishment provided under Section 138 too was enhanced from one year to two years. These legislative reforms are aimed at encouraging the usage of cheque and enhancing the credibility of the instrument so that the normal business transactions and settlement of liabilities could be ensured. 3. The Supreme Court, in its judgment dated 1st August, 2014, in the case of Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129, held that the territorial jurisdiction for dishonour of cheques is restricted to the court within whose local jurisdiction the offence was committed, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be filed before the same court. Irrespetive of whether those cheques were presented for payment within the territorial jurisdiction of that court; (iii) stipulating that if more than one prosecution is filed against the same drawer of cheques before different courts, upon the said fact having been brought to the notice of the court, the court shall transfer the case to the court having jurisdiction as per the new scheme of jurisdiction; and (iv) amending Explanation 1 under Section 6 of the said Act relating to the meaning of expression "a cheque in the electronic form", as the said meaning is found to be deficient because it presumes drawing of a physical cheque, which is not the objecrive in preparing "a cheque in the electronic form" and inserting a new Explanation III in the said section giving :reference of the expressions contained in the Information Technology Act, 2000. ' 6. It is expected that the proposed amendments to the Negotiable Instruments Act, 1881 would help in ensuring that a fair trial of cases under Section 138 of the said Act is conducted keeping in view the interests of the complainant by clarifying the territorial jurisdiction for trying the cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , ultimately, held that the complainant could choose any one of those courts, having jurisdiction over any one of the local areas within the territorial limits, of which, any one of those five acts was done. 31. The judgment of the Supreme Court, in the case of K. Bheskaran (supra) was followed over a period of time. However, in view of the other decisions of the Supreme Court, in the case of Nishant Aggarwal vs. Kailash Kumar Sharma, reported in 2013(10) SCC 72, in the case of Shri Ishar Alloys Steels Ltd. vs. Jayaswals Neco Ltd., reported in 2001 (3) SCC 609 and in the case of Harman Electronicss (P) Ltd. vs. National Panasonic India Ltd., reported in 2009 (1) SCC 720, the issue as regards the territorial jurisdiction, once again, became debatable. In such circumstances, a larger bench was constituted, and it delivered the judgment in the case of Dasrath Rupsingh Rathod (supra). In this case, a three judge bench of the Supreme Court had held that a cheque bouncing case can be filed only in a court, which has the territorial jurisdiction over the place where the cheque is dishonoured by the Bank on which it is drawn. This judgment, in the case of Dasrath Rupsingh Rathod (supra) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this stage that in the N.I. Amendment Bill, 2015, as introduced in the Lok Sabha section 142 (2) intended to be amended as follows; Section 142, Cognizance of offences:-"(2) The offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction the bank branch of the payee, where the payee presents the cheque for payment, is situated. 35. Accordingly, the N.I. Amendment Bill, 2015, which, in fact was approved by the Lok Sabha, but couldn't make it through the Rajya Sabha, provided that the Court will try the case within whose local jurisdiction the bank branch of the payee, where the payee presents the cheque for payment, is situated. However, the N.I. Ordinance, 2015, did not stick to what the N.I. Amendment Bill, 2015 suggested and provided additional set of rules for the cases not presented through the payee's bank account. What I am trying to drive at is that it was not possible for the legislature to keep in mind all the possible permutations and combinations of the problems arising in filing the cases under section 138 of the N.I. Act. The N.I. Ordinance, 2015, finally put an end to the confusion of territorial jurisdiction in cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of funds. 8) Interest on RIA 14.50% p.a. i.e. Base Rate (10.25% p.a.) + 4.25%, till the date of recovery. 9) Courier charges per Instrument Location. No. 10) Courier Arrangement No. 11) Interest on delayed realization No." 39. Thus, although the cheques issued by the accused were collected by the complainant at New Delhi and were presented for clearance with the Corporation Bank at New Delhi, yet in my view, it could be said that the cheques were presented through an account, i.e., the account maintained by the complainant with the Bank of Baroda, Fertilizer Nagar Branch, Vadodara. Without the account of the complainant maintained with the Bank of Baroda, Fertilizer Nagar Branch, Vadodara, the Corporation Bank could not have given credit if, ultimately, the cheques would have been cleared. What is important is the account maintained by the complainant with the Bank of Baroda, Fertilizer Nagar Branch at Vadodara. The Corporation Bank has made itself very clear in the certificate dated 07.09.2015 that the cheques were deposited and dishonoured to the account No. 02090500000002 at the Bank of Baroda, Fertilizer Nagar Branch, Vadodara, Gujarat. Giving strict interpretatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention and that all cases within the mischiefs aimed at are, if the language permit, to be held to fall within its remedial influence. 42. I do agree, to a certain extent, with Mr. Parikh, the learned senior counsel appearing for the applicants that in the complaint lodged by the complainant, there is not even a passing reference to the account maintained by the complainant with the Bank of Baroda, Fertilizer Nagar Branch, Vadodara. The territorial jurisdiction of a particular court to try the case can be determined on the basis of the averments made in the complaint in that regard. However, there is overwhelming materials on record as regards the Bank of Baroda account, which is otherwise not in dispute. At this stage, let me deal with the contention raised by Mr. Nanavati, the learned senior counsel appearing for the complainant as regards section 201 of the Cr.P.C. According to Mr. Nanavati, the accused persons should have raised the issue of territorial jurisdiction of the court at Vadodara at the earliest so that the court concerned could have looked into the same keeping in mind the provisions of section 201 of the Cr.P.C. In my view, at this stage, section 201 of the Cr.P.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is sufficient ground for taking cognizance of the offence and that he is competent to take such cognizance of offence. Once the decision is taken and summons is issued, in the absence of a power of review including the inherent power to do so, the remedy lies before the High Court under Section 482 Cr. P.C or under Article 227 of the Constitution of India and not before the Magistrate. 49. Section 201 Cr.P.C., as noticed earlier, can be applied immediately on receipt of a complaint, if the Magistrate is not competent to take cognizance of the offence. Once the Magistrate taking cognizance of an offence forms his opinion that there is sufficient ground for proceeding and issues summons under Section 204 Cr.P.C., there is no question of going back following the procedure under Section 201 Cr.P.C. In the absence of any power of review or recall the order of issuance of summons, the Magistrate cannot recall the summons in exercise of its power under Section 201 Cr.P.C. (see Devendra Kishanlal Dagalia vs. Dwarkesh Diamonds Private Limited & Ors., (2004) 2 SCC 246) 50. For the foregoing reasons, I hold that the Court at Vadodara has the territorial jurisdiction and the compl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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