GUJARAT HIGH COURT
J.B. Pardiwala, J.
Mahendra Kumar Kedarnath Modi
and Ors. —Applicants
versus
State of Gujarat and Anr. —Respondents
Criminal Misc. Application (For Quashing & Set Aside FIR/Order) No.9134 of 2016 to Criminal Misc. Application No.9163 of 2016
Decided on 5.5.2017

IMPORTANT POINT
If the payee presents the cheque through the account, the court will try the case within whose local jurisdiction the bank branch of the payee (collecting bank) is situated & (ii) if the payee presents the cheque through the counter of the drawee bank for payment, the court will try the case within whose local jurisdiction the bank branch of the drawer (drawee bank) is situated.

Headnote:Negotiable Instruments Act, 1881—Section 142—Territorial Jurisdiction of Court to enquire and try offence of dishonour of cheque—Offence shall be inquired into and tried only by a court within whose local jurisdiction the cheque is delivered for collection through an account —If cheque is presented for payment by payee or holder in due course, otherwise through an account, branch of drawee bank where drawer maintained account would be jurisdiction of Court—Complainant Company supplied goods to accused company and payment for said goods fell out standing accused issued cheques drawn on Karnataka Bank Ltd, New Delhi Branch—Complainant presented cheques with its banker viz Corporation Bank Ltd, new Delhi and scheques were returned unpaid for reason “Funds insufficient”—Complainant had an account with Bank of Baroda, Vadodara Gujarat—Corporation Bank at Delhi had provided facility of FCS (Fund Collection System) (Parent Caps Ahmedabad) for complainant—Corporation Bank informed complainant that all cheques had been dishonoured to the account maintained by complainant with Bank of Baroda, Vadodara—All cheques were account-payee—When payment of dishonoured cheques was not made by accused despite statutory notice served upon them complaints were filed at Court at Vadodara—Whether Court at Vadodara had territorial jurisdiction to try complaints? Yes.

       Held: So far as the case on hand is concerned, if the cheques would have been presented for the purpose of clearance with any branch of the Bank of Baroda at New Delhi or at any other place, then, probably, the case would have been squarely covered by the decision of this court in the case of Brijendra Enterprise (supra) However, the facts of the present case are slightly different. The factual distinction between the two cases warrants interpretation of the words “through an account” as appearing in section 142 (2)(a) of the N.I. Act.

       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 under section 138 of the N.I. Act by clearly laying down that (I) if the payee presents the cheque through the account, the court will try the case within whose local jurisdiction thebank branch of the payee (collecting bank) is situated & (ii) if the payee presents the cheque through the counter of the drawee bank for payment, the court will try the case within whose local jurisdiction the bank branch of the drawer (drawee bank) is situated.

       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 interpretation to the words “through an account”, as suggested by the learned counsel appearing for the applicants will frustrate the very object, with which, section 142 of the N.I. Act came to be amended. I find it extremely difficult to accept the argument of Mr. Parikh that in the case on hand, the payee could not be said to have used his account nor his Bank to deal with the cheques. If the cheques are account payee, such cheques, for the purpose of clearance, are bound to be “through an account”. Of course, it is the argument of Mr. Parikh that a situation like the one on hand would fall within the clause (b) to section 142(2) and presenting the cheques across the counter is not the only mode, which would bring the case within the ambit of clause(b). However, I do not find merit in such submission. It is also difficult for me to accept the argument that the original account of the complainant with the Bank of Baroda has nothing to do with the independent agreement and understanding between the GSFC and the Corporation Bank. As noted above, it is the original account of the complainant maintained with the Bank of Baroda, which is important and without the said account, the arrangement with the Corporation Bank can never come into play.

       My above noted interpretation of the words “through an account” would subserve the object of the amendment of section 142 of the N.I. Act and insertion of new section 142(A) by amendment. Any other interpretation would frustrate the object. The complainant company is a government undertaking and its business is spread across the various parts of the country. The Fast Collection Service provided by the Corporation Bank helps the complainant to a considerable extent. The cheques received at the different places in the country can be deposited at a convenient FCS Branch of the Corporation Bank and the funds so collected are credited to the bank account of the complainant.

       The effect of the rule of strict construction might almost be summed up in the remark that where an equivocal word or ambiguous sentence leaves a reasonable doubt of its meaning which the canons of interpretation fail to solve, the benefit of the doubt should be given to the subject and against the legislature which has failed to explain itself. But it yields to the paramount rule that every statute is to be expounded according to its expressed or manifest intention and that all cases within the mischiefs aimed at are, if the language permit, to be held to fall within its remedial influence.

       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 will have no application.

       For the foregoing reasons, I hold that the Court at Vadodara has the territorial jurisdiction and the complaints filed by the complainant for the offence under section 138 of the N.I. Act are maintainable. (Paras 18, 35, 39 to 42 and 50)

       Result: Applications dismissed.