SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

2012 Supreme(J&K) 248

JAMMU & KASHMIR HIGH COURT
Hasnain Massodi, J.
Imtiyaz Ahmad Bhat -Appellant
Versus
FIL Industries Ltd. -Resopndent
561-A No. 179/11, Cr. MP No: 431/11
Decided On : 02-06-2012

Advocates Appeared:
Mr. S.M. Ayoub, Advocate for the applicant(s).
Mr. Z.A. Shah, Sr. Advocate for non-applicant(s).

The main legal point established in the judgment is that the place of the drawee bank determines the jurisdiction of the court to entertain and try the complaint under Section 138 of The Negotiable Instruments Act, 1881.

Headnote:

Negotiable Instruments Act - Jurisdiction - Section 138 - Summary of Acts and Sections: The court discussed the jurisdiction of the court within whose territorial jurisdiction the collecting bank is located and whether the place of issue/despatch of demand notice determines the jurisdiction of the Court to entertain and deal with the complaint under Section 138 of The Negotiable Instruments Act, 1881. The court referred to Section 138 of the Act and various case laws to determine the jurisdictional aspects. The court held that the place of the drawee bank determines the jurisdiction of the court to entertain and try the complaint under Section 138 of the Act.

Fact of the Case:

The petitioner drew a cheque in favor of the respondent, which bounced. The respondent filed a complaint under Section 138 of The Negotiable Instruments Act, 1881 in the Court of CJM, Sub-Judge, Sopore. The petitioner challenged the jurisdiction of the court to take cognizance of the complaint.

Finding of the Court:

The court found that the court at Sopore had no jurisdiction to entertain and deal with the complaint as the place of the drawee bank determines the jurisdiction of the court under Section 138 of the Act.

Issues: The issues were whether the court within whose territorial jurisdiction the collecting bank is located would have the jurisdiction to entertain and deal with the complaint and whether the place of issue/despatch of demand notice determines the jurisdiction of the Court to entertain and deal with the complaint under Section 138 of The Negotiable Instruments Act, 1881.

Ratio Decidendi: The court held that the place of the drawee bank determines the jurisdiction of the court to entertain and try the complaint under Section 138 of the Act.

Final Decision: The petition was allowed, and the complaint and proceedings pending before the Chief Judicial Magistrate, Sopore, were quashed.

1. The fate of petition on hand hinges on answer to the following two questions:-

(1) whether in a complaint under Section 138 of The Negotiable Instruments Act, 1881 (hereinafter referred to as "Act") the court within whose territorial jurisdiction, the collecting bank is located, would have the jurisdiction to entertain and deal with the complaint.

(2) whether the place of issue/despatch of demand notice in terms of Section 138 of the Act determines the jurisdiction of the Court to entertain and deal with the complaint under Section 138 of The Negotiable Instru#31;ments Act.

(3) Whether the complainant in the present case was competent to file the complaint.

Before we make an effort to find out answer to the above questions, it would be appropriate to have an overview of back ground facts.

2. The petitioner in the present petition, admittedly has business relationship with the respondent Company registered under Company's Act 1956 having its head office at Sheikh Bagh, Srinagar and Branch Office at Sopore, Jammu & Kashmir.

3. The petitioner on 23.12.2010 drew a cheque no. 3855999 for an amount of Rs. 29,58,746 drawn on Jammu & Kashmir Bank Ltd. Branch, Imamsahib Shopian, in favour of the respondent. The respondent handed over the cheque to United Commercial Bank, Branch Sopore, for its collection from the drawee bank i.e Jammu & Kashmir Bank, branch Imam Sahib, Shopian. The United Commercial Bank, the collecting bank in the present case, on 10.01.2011, informed the respondents that the cheque had bounced and on 04.01.2011 the drawee bank refused the payment on the ground of "in sufficiency of funds" and "payment stopped by the Drawer".

4. The respondent after the cheque was received unpaid, on 31.01.2011 issued a demand notice to the petitioner from Sopore, demanding payment of cheque amount within 15 days from the receipt of the notice. However, the petitioner failed to make payment within the aforesaid period, prompting the respondent to file a complaint through its Attorney holder under Section 138 of The Negotiable Instru#31;ments Act, 1881 in the Court of CJM, Sub-Judge, Sopore. The complaint was entertained, statement of witnesses recorded and process issued against the peti#31;tioner. The petitioner, on 30.05.2011, filed the application seeking dismissal of the complaint.

5. Petitioner's case before the court was that the court lacked the jurisdiction to take cognizance on the complaint as none of the ingredients of the offence under Section 138 of The Negotiable Instruments Act, 1881, occurred within the territorial limits of the Court of CJM, Sopore.

6. The petitioner referring to law laid down in Harman Electronics (P) Ltd. v. National Panasonic India (P) Ltd (2009) SC1166 and Rohit Motors & Anr v. M/S Punjab Tractors Ltd. 2010 (2) JKJ [HC] 894 : SLJ 2010193 insisted that neither the place of issuance of notice nor place where collecting bank was situated, were determinative of the jurisdiction of the court to entertain and deal with the com#31;plaint under Section 138 of The Negotiable Instruments Act, 1881. It was next urged the person filing complaint in the name of respondent Company lacked authority to file the complaint as the letter of authority appended to the complaint, merely nominates Mr.Mohd.Akbar Marazi as an agent for conducting and following up the legal cases under Section 138 of The Negotiable Instruments Act, 1881 and not to file a complaint.

7. The application filed by the petitioner did not find favour with learned CJM, Sopore and was dismissed on 21.11.2011. Learned Trial Court was of the opinion that only process had been issued and cognizance was yet to be taken in the matter and that the court at Sopore had jurisdiction to entertain and deal with the com#31;plaint. While holding so, learned Magistrate placed reliance on the law laid down by the Apex Court in case titled Smt. Shamshada Begum v. B. Mohammad reported in AIR 2009 SC1355.

8. The trial court order dated 21.11.2011 whereby petitioner's applic



























Click Here to Read the rest of this document

1
2
3
4
5
6
7
8
9
10
11
Judicial Analysis

AI

SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top