2012 Supreme(Mad) 1800
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K. CHANDRU
Galaxy Amaze Kingdom Limited
Versus
Union of India, rep by its Secretary to Government, Law Department, New Delhi & Others
W.P.No.9144 of 2012 & M.P.No.1 of 2012
Decided on : 10-04-2012
For the Respondents:
The court emphasized that for criminal cases under Section 138 of the NI Act, the jurisdiction of the court to try the case is governed by the provisions of the Criminal Procedure Code and not common law principles.
Headnote:
Jurisdiction - Contracts - Negotiable Instruments Act - Section 138 - Contracts specifying jurisdiction for dispute resolution - Contracts with super stockiest and channel partners - Disputes arising out of contract to be settled by arbitrator at Chennai - Criminal complaints filed in various courts under Section 138 of NI Act - Petitioner seeking declaratory relief - Supreme Court judgments on territorial jurisdiction under Section 138 of NI Act - Court dismissing writ petition
Fact of the Case:
The petitioner, a limited company, entered into contracts with super stockiest and channel partners specifying Chennai as the jurisdiction for dispute resolution. The respondents breached the contracts and filed criminal complaints in various courts under Section 138 of the Negotiable Instruments Act, causing nuisance, harassment, and business loss to the petitioner. The petitioner sought declaratory relief based on similar writ petitions admitted by the court.
Finding of the Court:
The court dismissed the writ petition, stating that the petitioner failed to demonstrate the similarity of their case to the admitted writ petitions and improperly made several magistrates party respondents. The court also cited Supreme Court judgments on the maintainability of civil and criminal proceedings under Section 138 of the NI Act and the territorial jurisdiction of courts trying such offences.
Issues: Jurisdiction for dispute resolution in contracts, maintainability of criminal proceedings under Section 138 of NI Act, territorial jurisdiction of courts trying offences under Section 138 of NI Act
Ratio Decidendi: The court held that the petitioner cannot restrict the scope of the aggrieved party from suing in the appropriate court for criminal cases under Section 138 of the NI Act, even if the contract specifies a different jurisdiction for civil cases. The court also emphasized the need to strike a balance between the rights of the complainant and the accused in such cases.
Final Decision: The writ petition was dismissed, and no costs were awarded. The connected miscellaneous petition was closed.
1. The petitioner has filed the present writ petition seeking for a writ in the nature of declaration declaring that by the contract if the parties have restricted settling of disputes between them at a particular place, any prosecution or proceedings launched by the other party away from the restricted / agreed jurisdiction even in cases of Section 138 of the Negotiable Instruments Act falling within the said contract will not be valid and binding in law and non-est against the petitioner.
2. The petitioner has made the Union of India and the State of Tamil Nadu as first and second respondents. Apart from that, there are 17 respondents, including seven learned Magistrates whose courts are situated in New Delhi, Haryana and Mumbai.
3. The contention of the petitioner was that the petitioner is the limited company registered under the Companies Act, 1956. The company had entered into contracts with some super stockiest, Channel Partners covering for a period of 6-1/2 years. Under the said Contract, it was agreed between the parties that any dispute arising out of the contract will be settled by the Arbitrator at Chennai. For terminating the contract, either of the parties should give six months notice. For settling the matter, one has to wait for 180 days, during which period the contracting party will have to return the material accounts. Therefore, any dispute arising out of the said contract between the petitioner and the other contracting parties, the Court at Chennai alone will have the jurisdiction. The petitioner had appointed Distributors / stockiest at various cadres and respondents 3,5,7,9,11,13 and 18 and has valid contracts. They have breached the contracts even at the initial stage itself. The counter guarantee cheque which was issued to them was misused by them. They filed criminal complaints before various courts in terms of Section 138 of the Negotiable Instruments Act. The learned Magistrates of respective courts have also issued process in respect of those complaints. The details of transactions which the petitioner had entered into with various contesting respondents and also the nature of process issued by various learned Magistrates who were also made as party respondents to the writ petition were furnished in the typed set.
4. It is the case of the petitioner that filing complaints in all over the India, even though they had agreed to sue the petitioner only within the jurisdiction of the Chennai city has resulted in nuisance and harassment besides causing mental agony and business loss to the petitioner. The contractual obligation that they had with the petitioner debar them from suing the petitioner in various Magistrates' Courts in terms of Section 138 of the NI Act. Such proceedings initiated will not be binding on the petitioner in view of the subsisting of contracts. It is in that view of the matter, the petitioner has sought for declaratory relief. He also stated that similar writ petitions have been admitted by this court. The copies of various proceedings initiated against the petitioner before various Magistrate Courts have been enclosed in the typed set. The petitioner also relied upon a judgment of the Supreme Court in Bir Bajrang Kumar Vs. State of Bihar reported in AIR 1987 SC 1345 for contending that when similar writ petitions have been admitted for identical relief, the court should not dismiss the writ petition.
5. However, this court is not inclined to admit the writ petition for more than one ground. Except by giving number of those writ petitions, the petitioner has not made out any case as to how they are similar to the case of the petitioner. On the other hand, he has made several magistrates of the Country as party respondents as if the writ petition is a quash petition filed under Section 482 Cr.P.C. In respect of each process issued by the learned Magistrates, it is the separate cause of action and the petitioner cannot file a consolidated writ petition and challeng