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2016 Supreme(Guj) 518
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
J.B. Pardiwala, J.
Brijendra Enterprise and Ors. - Appellants
Vs.
State of Gujarat and Ors. - Respondents
Criminal Misc. Application No. 13062 of 2011
Decided on : 30-03-2016
For the Appellants :Bipin I. Mehta and Vicky B. Mehta, Advocates
For the Respondents: Public Prosecutor
Important Points
To restrain negotiability, addition of words 'Not Negotiable' or "Account Payee Only' is necessary.
Subject
Territorial Jurisdiction - Dishonour of Cheque
Act Referred
NEGOTIABLE INSTRUMENTS ACT : S.138, S.142(2), S.142(1)
Headnote
Code of Criminal Procedure, 1973 – Section 482 – Negotiable Instruments Act – Section 138 – Quashment – By this application under Section 482 of the Code of Criminal Procedure, 1973, applicants-original accused persons seek to invoke the inherent powers of this Court, praying for quashing of the proceedings of the Criminal Case filed in the Court of the learned Metropolitan Magistrate Court No. 7 – They have also prayed to quash the order passed below application Exh.3, by which the Magistrate recorded a finding that it had the territorial jurisdiction to proceed with the case – Held, Object of crossing is to secure payment to a banker so that it could be traced to the person receiving the amount of the cheque – Crossing is a direction to the paying banker that the cheque should be paid only to a banker or a specified banker – To restrain negotiability, addition of words Not Negotiable or "Account Payee Only is necessary – Crossed bearer cheque can be negotiated by delivery and crossed order cheque by endorsement and delivery – Crossing affords security and protection to the holder of the cheque – Metropolitan Magistrate has the jurisdiction to try the case instituted by the complainant for the dishonour of the cheque – Application Dismissed (Paras 48, 49, 50)
J.B. Pardiwala, J.
1. By this application under Section 482 of the Code of Criminal Procedure, 1973, the applicants-original accused persons seek to invoke the inherent powers of this Court, praying for quashing of the proceedings of the Criminal Case No. 8758 of 2009 filed in the Court of the learned Metropolitan Magistrate (Negotiable Instruments Act), Court No. 7, Ahmedabad. They have also prayed to quash the order dated 3rd April 2010 passed below application Exh.3, by which the learned Magistrate recorded a finding that it had the territorial jurisdiction to proceed with the case. The applicant no. 1 is a proprietory concern of which the applicant no. 2 is the proprietor.
2. The facts of this case may be summarised as under:
"The respondent no. 2, a company registered under the provisions of the Companies Act, 1956, filed a private complaint No. 8758 of 2009 in the Court of the learned Metropolitan Magistrate (Negotiable Instruments Act), Court No. 7, Ahmedabad, for dishonour of the cheque punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, 'the Act')."
3. It the case of the respondent no. 2 that it had business relations with the accused. The accused had been purchasing the goods from them as ordered. The accused issued a cheque bearing No. 064039 dated 4th June 2009 drawn on the Union Bank of India for the amount of Rs. 15,21,741.00 duly signed by him as the proprietor of the proprietory concern.
4. The cheque was drawn by the accused no. 2 of the account maintained by him with the Union Bank of India, Badalapur, District Jaunpur, State of Uttar Pradesh. The complainant deposited the cheque with the ICICI Bank Limited, Gorakhpur Branch, Gorakhpur, State of Uttar Pradesh. The cheque was dishonoured as the funds were insufficient in the account maintained by the complainant with the Union Bank of India. The complainant issued a statutory notice under Section 138 of the Act dated 6th July 2009. As the complainant failed to make the payment with the statutory time period, the complaint was lodged. The learned Magistrate took cognizance upon the said complaint.
5. It appears that the accused herein filed an application Exh.3, stating therein that as the entire transaction had taken place in the State of Uttar Pradesh, the Court at Ahmedabad had no territorial jurisdiction to entertain the complaint for the dishonour of the cheque although the registered office of the complainant is situated in Ahmedabad.
6. The learned Magistrate, by order dated 3rd April 2010, rejected the application. Hence, this petition.
7. On 19th September 2011, this Court passed the following order:
"Notice to the Respondents returnable on 10.10.2011.
Learned APP Mr. K.P. Raval waives service of Notice for Respondent No. 1 - State of Gujarat.
Ad interim relief in terms of paragraph 7(C) is granted till then."
8. Mr. Bipin Mehta, the learned advocate appearing for the applicants, vehemently submitted that when the entire transaction took place at Uttar Pradesh, the complaint could not have been filed by the complainant in Ahmedabad on the premise that it has its registered office at Ahmedabad. He submitted that no cause of action could be said to have arisen within the territorial limits of the learned Metropolitan Magistrate, Ahmedabad. In such circumstances, he prays that the order passed by the learned Magistrate below application Exh.3 be quashed and the complaint be returned to the complainant to be filed before the appropriate Court in the State of Uttar Pradesh.
9. On the other hand, this application has been vehemently opposed by Mr. Gaurav Mathur, the learned counsel appearing for the respondent no. 2 - original complainant.
10. Mr. Mathur invited my attention to the affidavit-in-reply filed on behalf of the complainant, inter alia, stating that:
"3. The contents of paragraph nos.1 and 2 are formal in nature and do not warrant any comments.
4. With reference to the contents of paragraph nos. 3.1 to 3.6, I submit that the
