2006 Supreme(SC) 163

2006(2) Supreme 681
Supreme Court of India
(From Kerala High Court)
S.B. Sinha and P.K. Balasubramanyan, JJ.
Musaraf Hossain Khan —Appellant
versus
Bhagheeratha Engg. Ltd. & Ors. —Respondents
Civil Appeal No. 1269 of 2006
(Arising out of SLP (C) No. 6656 of 2005)
Decided on 24-2-2006
Counsel for the Parties :
For the Appellant : Chanchal Kumar Ganguli, Advocate.
For the Respondents : Satish Vig, Ramesh Babu M.R., and K. Rajeev, Advocates.

Important pointOnly such High Court within whose jurisdiction the order of subordinate court has been passed, would have the jurisdiction to entertain an application under Article 227 of the Constitution unless it is established that the earlier cause of action arose within the jurisdiction thereof.

Headnote:(i) Negotiable Instruments Act, 1881—Sections 138 and 142—Complaint for offence of dishonour of cheque—Cause of action for determining territorial jurisdiction of Court—Facts which are required to be proved for securing conviction u/s 138 of the Act—Ingredients of the offence—Appellant filed a complaint petition in the Court of Chief Judicial Magistrate, Birbhum alleging that several cheques of diverse sums issued by respondent had been dishonoured—Appellant entered into a contract with respondent company for supply of stone chips—Company used to hand over post dated cheques to appellant—Company had issued six cheques which on deposit were returned by the banker stating ‘full cover not received’—A demand notice was sent by appellant demanding payment of cheque to respondent company—Out of the sum of Rs. 35,48,640/- a sum of Rs. 5,33,795/- was paid by respondent—Appellant alleged that a sum of Rs. 30,14,845/- is still due and owing to him from respondents—Respondents admit claim of appellant and assured him that rest of the amount shall be paid, but the same has not been done—Appellant filed a complaint petition in the Court of Chief Judicial Magistrate, Birbhum at Suri—Respondents allegedly received the summons sent to them in West Bengal—Respondents filed a writ petition in High Court of Kerala—Whether Kerala High Court had jurisdiction in the matter—(No)—No part of cause of action arose within its jurisdiction—Criminal Procedure Code, 1973—Section 190.

       Held : In this case, the averments made in the writ petition filed by the respondent herein even if given face value and taken to be correct in their entirety would not confer any jurisdiction upon the Kerala High Court. The agreement was entered into within the jurisdiction of the Calcutta High Court. The project for which the supply of stone chips and transportation was being carried out was also within the State of West Bengal. Payments were obviously required to be made within the jurisdiction of the said court where either the contract had been entered into or where payment was to be made. The appellant did not deny or dispute any of the averments made in the complaint petition. In the writ petition it merely wanted some time to make the payment. It is now well known that the object of the provision of Section 138 of the Act is that for proper and smooth functioning of business transaction in particular, use of cheques as negotiable instruments would primarily depend upon the integrity and honesty of the parties. It was noticed that cheques used to be issued as a device inter alia for defrauding the creditors and stalling the payments. It was also noticed in a number of decisions of this Court that dishonour of a cheque by the bank causes incalculable loss, injury and inconvenience to the payee and the entire credibility of the business transactions within and outside the country suffers a serious setback. It was also found that the remedy available in a civil court is a long-drawn process and an unscrupulous drawer normally takes various pleas to defeat the genuine claim of the payee. (Paras 33 & 34)

       In Prem Chand Vijay Kumar vs. Yashpal Singh & Anr. [(2005) 4 SCC 417], we may, however, notice that it was held that for securing conviction under Negotiable Instruments Act, 1881 the facts which are required to be proved are :

       "(a) that the cheque was drawn for payment of an amount of money for discharge of a debt/liability and the cheque was dishonoured;

       (b) that the cheque was presented within the prescribed period;

       (c) that the payment made a demand for payment of the money by giving a notice in writing to the drawer within the stipulated period; and

       (d) that the drawer failed to make the payment within 15 days of the receipt of the notice."

       For the purpose of proving the aforementioned ingredients of the offence under Section 138 of the Act, the complainant-appellant was required to prove the facts constituting the cause of action therefor none of which arose within the jurisdiction of the Kerala High Court. It is, apt to mention that In Prem Chand Vijay Kumar (supra) this Court held that cause of action within the meaning of Section 142(b) of the Act can arise only once. For the reasons aforementioned, we are of the opinion that the Kerala High Court had no jurisdiction to entertain the writ petition as no part of cause of action arose within its jurisdiction. (Paras 35 to 37)

       A bare perusal of the complaint petition would clearly go to show that according to the complainant the entire cause of action arose within the jurisdiction of the district courts of Birbhum and in that view of the matter it is that court which will have jurisdiction to take cognizance of the offence. In fact the jurisdiction of the court of CJM, Suri, Birbhum is not in question. It is not contended that the complainant had suppressed material fact and which if not disclosed would have demonstrated that the offence was committed outside the jurisdiction of the said court. Even if Section 178 of the Code of Criminal Procedure is attracted, the court of the Chief Judicial Magistrate, Birbhum will alone have jurisdiction in the matter. (Para 31)

       (ii) Constitution of India—Articles 226 and 227—Exercise of jurisdiction by the High Court for issuance of a writ of certiorari—Error apparent on face of record—Such error should be self evident—High Court should not ordinarily interfere with an order taking cognizance passed by a competent court of law except in a proper case—Negotiable Instruments Act, 1881—Section 138.

       Held : We have referred to the scope of jurisdiction under Articles 226 and 227 of the Constitution only to highlight that the High Courts should not ordinarily interfere with an order taking cognizance passed by a competent court of law except in a proper case. Furthermore only such High Court within whose jurisdiction the order of subordinate court has been passed, would have the jurisdiction to entertain an application under Article 227 of the Constitution of India unless it is established that the earlier cause of action arose within the jurisdiction thereof. (Para 28)