IN THE HIGH COURT OF KERALA AT ERNAKULAM
K. HARILAL, J.
TRADEVINT LOGISTICS (INDIA) PRIVATE LIMITED – Appellant
Versus
IBRAHIM SHAH & OTHERS – Respondents
Criminal Revision Petition No. 593 of 2015
Decided On : 27.5.2015
Section 138 - Negotiable Instruments Act - 1881 - Summary of Acts and Sections: The court discussed the territorial jurisdiction of proceedings under Section 138 of the Negotiable Instruments Act, 1881, and referred to the decision in Dashrath Rupsingh Rathod vs. State of Maharashtra, 2014 (3) KLT 605. It was established that the court within whose jurisdiction the dishonour occurred has the territorial jurisdiction to entertain and try complaints under Section 138 of the N.I. Act. The court also highlighted the legal position that the place where the offence is committed is where the prosecution must be conducted, and that the cause of action arises at the place where the dishonour occurs.
Fact of the Case:
The complainant filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, alleging dishonour of an at par cheque drawn on the account maintained by the accused in a particular branch but payable at any branch. The accused issued the cheque payable at all branches of the Corporation Bank, but it was dishonoured at the Ravipuram Branch, Ernakulam. The court below initially returned the complaint for presentation before the proper court at Coimbatore, but the revision petition challenged this decision.
Finding of the Court:
The court found that the place where the dishonour occurred determines the territorial jurisdiction to entertain and try complaints under Section 138 of the N.I. Act. It set aside the impugned order and directed the court below to allow the petitioner to prove the place of occurrence of dishonour of the cheque by summoning the Branch Manager, Corporation Bank, Ravipuram Branch.
Issues: The main issue was the territorial jurisdiction of the court to entertain the complaint under Section 138 of the Negotiable Instruments Act, 1881, based on the location of the dishonour of the at par cheque.
Ratio Decidendi: The court established that the place where the dishonour occurs determines the territorial jurisdiction to entertain and try complaints under Section 138 of the N.I. Act. It emphasized that the offence in Section 138 of the N.I. Act is the dishonour of the cheque alone, and the place where the offence is committed is where the prosecution must be conducted.
Final Decision: The Criminal Revision Petition was allowed, and the impugned order was set aside. The court below was directed to restore the complaint on the files and allow the petitioner to prove the place of occurrence of dishonour of the cheque by summoning the Branch Manager, Corporation Bank, Ravipuram Branch.
1. The question that arises for consideration is, whether the complaint under Section 138 of the Negotiable Instruments Act, 1881 (for short the N.I. Act) alleging dishonour of an at par cheque drawn on the account maintained by the accused in a particular branch but payable at any branch, is maintainable in the court within whose jurisdiction the branch in which the cheque was presented and got dishonoured is situated.
2. The revision petitioner is the complainant in C.M.P. No. 3220 of 2014 on the files of the Additional Chief Judicial Magistrate's Court, (Economic Offences) Ernakulam. The said complaint was filed by the petitioner alleging the offence punishable under Section 138 of the N.I. Act.
3. It is the case of the complainant that, he had business transaction with the accused as his clearing and forwarding agent of the export business and in that transaction, an amount of Rs. 25,000 was outstanding from the accused to the complainant towards the bill issued by the complainant for clearing and forwarding works done. When the accused wanted to issue a cheque for the said amount due to the complainant, the complainant had insisted the accused to issue a cheque payable at Ernakulam. In that circumstance, the accused issued an at par cheque bearing No. 419130 dated 30-8-2014 for Rs. 25,000 drawn on account maintained by the accused in the Corporation Bank, Coimbatore Branch, payable at all branches of the Corporation Bank, in discharge of the said liability.
4. The complainant presented the cheque in his bank, M/s. Indian Bank, Wellington Island Branch, Ernakulam, for collection. They sent the said cheque to Ravipuram Branch of the Corporation Bank for collection. But the cheque was dishonoured and returned by the Ravipuram Branch, Ernakulam, stating the reason funds insufficient. Thereupon, the complainant caused to issue a legal notice to the accused requiring to pay the cheque amount; but the said notice was returned unnerved. The accused did not pay the amount covered by the cheque, despite the lawyer's notice issued to him demanding the said amount. Consequently, the complainant filed the above C.M.P. before the Additional Chief Judicial Magistrate's Court (EO), Ernakulam, to prosecute the accused for the offence punishable under Section 138 of the N.I. Act. According to the complainant, he filed the complaint before the said court on the reason that the cause of action had arisen at Ravipuram Branch, Ernakulam, where the cheque was dishonoured and returned for want of sufficient fund.
5. On receipt of the complaint the court issued notice to the accused for hearing on maintainability of the complaint on the ground that the said cheque had been drawn on the account maintained in the Branch of the said Bank at Coimbatore. The accused did not accept the notice and did not enter appearance. Thereupon the court below considered the maintainability of the complaint, in view of territorial jurisdiction, on merits.
6. After hearing the complainant on merits, the court below passed the impugned order returning the complaint for presentation before the proper court at Coimbatore having jurisdiction, within one month from the date of the return order as per the judgment of the Honourable Supreme Court reported in Dashrath Rupsing Rathod vs. State of Maharashtra and Another, 2014 (3) KLT 605. The legality and propriety of the said finding whereby the court below returned the complaint is under challenge in this revision petition.
7. The learned counsel for the petitioner advanced arguments assailing the findings whereby the court below found that the court below had no territorial jurisdiction to entertain the complaint. The point canvassed by the learned counsel for the petitioner is that, the court within whose jurisdiction dishonour occurs has the territorial jurisdiction to try the prosecution under Section 138 of the Negotiable Instruments Act, 1881. In short, the court below misconceived the proposition laid down by the Ape
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