IN THE HIGH COURT AT CALCUTTA
JAY SENGUPTA, J.
Mahendra Kumar Agarwal – Petitioner
Versus
The State of West Bengal & Anr. – Opp. Parties
C.R.R. 2015 of 2019, CRAN 2 Of 2019 (Old CRAN 4454 Of 2019), CRAN 3 Of 2020 (Old CRAN 1050 Of 2020)
Decided On : 30-07-2021
Negotiable Instruments Act, 1881 – Section 138, 141, 142, 143 – Banking Regulation Act, 1949 – Quashing of a proceeding – Amendment –Territorial jurisdiction – Held, Therefore, order of learned Trial Court issuing process and order/s passed thereafter, if any, are set aside – Matter is remanded back to learned Trial Court proceeding afresh from the stage of enquiry as contemplated under Section 202 of Code – As proceeding has remained pending for quite long, learned Trial Court is requested to conduct enquiry under Section 202 of Code and decide on issuance of process at earliest, preferably within two months from date of communication of this order and thereafter, to conclude proceeding as expeditiously as possible without granting any unnecessary adjournment to any of parties – Disposed of.
JUDGMENT :
(Jay Sengupta, J.) :
1. This is an application for quashing of a proceeding in Case No. C/1386 of 2019 pending before the Learned Judicial Magistrate, 5th Court, Alipore, South 24-Parganas under Section 138 read with Section 141 of the Negotiable Instruments Act and all orders passed therein including the orders dated 26.02.2019, 28.03.2019 and 09.07.2019.
2. While the petitioner is the accused No. 3 before the learned Trial Court, the opposite party No. 2 is the complainant. It was alleged in the petition of complaint that two post dated cheques for Rs. 32,486/-and Rs. 25,00,000/-, respectively, both dated 01.10.2018 and drawn on the ICICI Bank, Hyderabad Branch, duly signed by the present petitioner, were issued in favour of the complainant/opposite party in due discharge of liability. The instant case relates to the cheque of Rs. 25, 00,000/-. According to the complainant, the company deposited the cheque within the validity period with its banker, namely, the Kotak Mahindra Bank for encashment. But, the same was dishonoured. This led to the initiation of the present proceeding.
3. On 26.02.2019 the learned Chief Judicial Magistrate, Alipore, South 24 Parganas was pleased to take cognizance of the alleged offences and transfer the case to the file of the learned Judicial Magistrate, 5th Court, Alipore, South 24 Parganas. On 28.03.2019 the complainant was examined under Section 200 of the Code. An affidavit was filed by the complainant. After perusing the petition of complaint, the documents filed, the initial deposition and the written affidavit, the learned Trial Court was pleased to issue process against the accused. On 09.07.2019, after being satisfied with the service of summons, the learned Trial Court was pleased to issue warrant of arrest against the accused Nos. 2 and 3.
4. Mr. Ayan Bhattacharjee, learned Counsel appearing on behalf of the petitioner, submitted as follows. The challenge to the impugned proceeding and the orders passed therein are restricted mainly to two issues. One, the learned Trial Court did not have any territorial jurisdiction to try the offence. Two, no enquiry, as contemplated under Section 202 of the Code, was undertaken although the accused resided beyond the territorial jurisdiction of the learned Trial Court. By the Amendment Act 26 of 2015, Chapter XVII of the Negotiable Instruments Act was virtually redrafted and Sections 142 and 143 of the said Act were re-structured. According to the said amendment, if a cheque was delivered for collection through an account, the branch of the bank where the payee or the holder in due course maintained the account, attracted the territorial jurisdiction. But, if a cheque was presented for payment by the payee or the holder in due course “otherwise through an account”, the branch of the drawee bank derived such jurisdiction. As per the present facts, the only banker which was mentioned in the petition of complaint was the Kotak Mohindra Bank situated at the Ground Floor, 5 Gorky Terrace, Kolkata 700017 and the same fell beyond the territorial jurisdiction of the learned Trial Court. The most distinctive part in this litigation was that the cheque in question was purportedly deposited at a kiosk situated at the Ground Floor of 5 Gorky Terrace, Kolkata 700017. A kiosk, by no stretch of imagination, can be inextricably connected with banking affairs and therefore, the same did not satisfy the test of a ‘branch’ as defined under the Banking Regulation Act, 1949. Since the cheque was presented at the kiosk, which was clearly not a branch of a bank, the same could not be said to have been presented for payment through an account and therefore, the original bank of the drawer attracted the jurisdiction. Any other interpretation would dilute the Clause (b) of Subsection (2) of Section 142 of the Negotiable Instruments Act. It was not permissible to omit any part of the provision and the whole section had to be read together and an attempt was to be
(1) Dishonour of cheque – Jurisdiction to try complaint filed under Section 138 in respect of cheque delivered for collection through an account payee cheque, is vested in court within whose local ju....
The main legal point established in the judgment is that the trial court had jurisdiction to try the case under Section 138 of NI Act based on the location of the complainant's bank branch, and the i....
Jurisdiction for dishonor of cheque cases under the Negotiable Instruments Act is determined by the location of related transactional acts, not merely where notices originate.
Issuance of summons without conducting inquiry under Section 202 of the Cr.P.C. is impermissible, making the cognizance under Section 138 of the N.I. Act unsustainable.
The court established that the issuance of a cheque, even if post-dated or issued as security, can constitute a legally enforceable debt under Sec. 138 of the N.I. Act, and that the inquiry under Sec....
The main legal point established in the judgment is the clarification of territorial jurisdiction for trying an offence under Section 138 of the Negotiable Instruments Act, 1881, as per the amendment....
The jurisdiction for offenses under Section 138 of the Negotiable Instruments Act is determined by the location where the cheque was presented for collection, and a transfer of proceedings to the app....
Section 142 (2) of Negotiable Instruments Act read cognizance of offences.
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