Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2010 Supreme(J&K) 120

IN THE HIGH COURT OF JAMMU AND KASHMIR AT SRINAGAR
Gh. Hasnain Massodi, J.
Rohit Motors & Ors. - Appellant
Versus
Punjab Tractors Ltd. & Ors. - Respondent
561-A No. 102 /2009 C/W 561-A No. 103/2009, 106/2009, 107/2009, 108/2009, 109/2009, 110/09, 111/09, 112/2009, 113/2009
Decided On : 25 March, 2010

Advocates Appeared:
Advocate For Appellant: Gurvinder Singh
Advocate For Respondent: A.H. Naik

The court clarified the jurisdictional aspects of filing complaints under Section 138 Negotiable Instruments Act, emphasizing that the offence consists of several acts and the court having jurisdiction over any of such local areas has jurisdiction to inquire and try the offence.

Headnote:
Negotiable Instruments Act - Jurisdiction - Section 138 Negotiable Instruments Act - Section 177, 179, 182 of Criminal Procedure Code - The court held that the offence under Section 138 of the Act consists of several acts and the court having jurisdiction over any of such local areas has jurisdiction to inquire and try the offence. The court further interpreted the law laid down in K. Bhaskaran's case to mean that the complaint under Section 138 Negotiable Instruments Act may be filed in a Court within the local limits of whose jurisdiction any of the following acts are done: cheque is drawn, the cheque is presented to the drawee Bank and returned unpaid, the demand notice is given and received or presumed to have been received, and where the drawer fails to make the payments within 15 days of the receipt of the notice.
Fact of the Case:

The respondent company filed complaints under Section 138 Negotiable Instruments Act and 420 RPC against the petitioners for dishonored cheques. The petitioners challenged the jurisdiction of the Court at Srinagar to entertain and deal with the complaints.
Finding of the Court:

The court found that the Court at Srinagar lacked jurisdiction to entertain and proceed with the complaints and quashed the orders taking cognizance and directing issuance of process against the petitioners.
Issues: The primary issue was whether the Court at Srinagar had jurisdiction to entertain and proceed with the complaints filed under Section 138 Negotiable Instruments Act and 420 RPC.
Ratio Decidendi: The court held that the offence under Section 138 of the Act consists of several acts and the court having jurisdiction over any of such local areas has jurisdiction to inquire and try the offence. The court further interpreted the law laid down in K. Bhaskaran's case to mean that the complaint under Section 138 Negotiable Instruments Act may be filed in a Court within the local limits of whose jurisdiction any of the following acts are done: cheque is drawn, the cheque is presented to the drawee Bank and returned unpaid, the demand notice is given and received or presumed to have been received, and where the drawer fails to make the payments within 15 days of the receipt of the notice.
Final Decision: All ten petitions under Sections 561-A were allowed, and the orders taking cognizance and directing issuance of process against the petitioners were quashed.

1. Trade and Commerce are of pivotal importance for over all development of a country. These while making contributions in shape of direct and indirect taxes to the State exchequer provide employment to a large number of people. It has been thus, all along endeavor of the law makers to enact laws that guarantee freedom of trade and commerce, facilitate and promote trade and commerce and impart credibility to the commercial transactions and respectability to the Negotiable Instruments. It needs no emphasis, that with new strides in trade and commerce, it is impracticable to rely on cash transactions alone. The parties to commercial transactions invariably rely on Negotiable Instruments like cheques to clinch commercial deals. It is thus of utmost importance that cheques are honoured as to discredit cheques as medium of commercial transactions is bound to have a negative spill over for over all health of economy. It is for the said reason that failure to adhere to the commitments by drawer of a cheque has been viewed seriously and frowned upon by the social planners. Before a special law, dealing with dishonor of cheques, was enacted, Section 420 RPC used to be pressed into service to deal with the problem. It was soon realized that, "deception", and "fraudulent or dishonest inducement" being necessary components of the offence of cheating it may not be possible for drawee or holder in due course of a bounced cheque to prove existence of such basic components of the offence of cheating. Cases are conceivable where the drawer of cheque at the time of issuing cheque had no intention to deceive a drawee and thus would go, of the hook, once the drawer failed to prove deception. In the circumstances a law was required to be enacted which would make return of cheque unpaid, an offence even when no deception was proved against the drawer of the cheque. The legislative effort in this regard crystallized in shape of Negotiable Instruments Act. The law relating to Negotiable Instruments is law of commercial world and is primarily concerned with sanctity to the instruments of the credit, convertible into money and easily passable from one person or other.

2. Should societal concern for respectability of negotiable instruments like cheques, be stretched to an extent that permit the drawer or holder in due course to make a departure from settled principles governing jurisdiction of Criminal courts, and choose jurisdiction of his choice, is the question stared at the court in the present bunch of petitions under Section 561-A Code of Criminal Procedure;

3. The facts of petitions 102/2009, 103/2009 and 106/2009 to 113/2009 under Section 561-A Criminal Procedure Code, if not similar, the contours of controversy in all the ten petitions are identical and all the ten petitions may very well be taken-up together. This order thus shall govern the fate of all the above captioned petitions.

4. The respondent -- Punjab Tractors Limited was a company incorporated under Companies Act, 1956 with its registered office at Phase-IV Industrial Area S.A.S Nagar (District Mohalla) 160055 Chandigarh and regional office at Bhopal, Madhya Pradesh India. The respondent Company had also a branch office at Srinagar. The respondent Company -- Punjab Tractors, appears to have later merged with Mahindra and Mahindra Limited, a Company incorporated under the Companies Act, 1913 having its registered office at Gate Way Building Apollo Bhandra Mumbai 480001, in terms of order passed in scheme of amalgamation by Honble High Courts of Bombay and Punjab and Haryana. It is in the said back ground that a few of the complaints have been filed by Mahindra and Mahindra Limited and the company resultantly figures as respondent in some of the petitions relating to said complaints, though the cheques were drawn in favour of Punjab Tractors Limited.

5. The petitioners in all the petitions are business concerns dealing in sale and service of Tractors and have been at some point of time ap

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Judicial Analysis

2010 Supreme(J&K) 120

IN THE HIGH COURT OF JAMMU AND KASHMIR AT SRINAGARGh. Hasnain Massodi, J.Rohit Motors & Ors. - AppellantVersusPunjab Tractors Ltd. & Ors. - Respondent561-A No. 102 /2009 C/W 561-A No. 103/2009, 106/2009, 107/2009, 108/2009, 109/2009, 110/09, 111/09, 112/2009, 113/2009Decided On : 25 March, 2010

The court clarified the jurisdictional aspects of filing complaints under Section 138 Negotiable Instruments Act, emphasizing that the offence consists of several acts and the court having jurisdiction over any of such local areas has jurisdiction to inquire and try the offence.

Judicial Analysis