Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(All) 873

IN THE HIGH COURT OF ALLAHABAD
ARUN KUMAR SINGH DESHWAL, J.
Indraveer Singh And Another – Appellant
Versus
State of Uttar Pradesh and Another – Respondents
Application U/S 482 No. - 8779 of 2024
Decided on : 27-05-2024

Advocates:
Advocate Appeared:
For the Applicant : Gautam, Mohd. Shamim, Nafees Ahmad
For the Opposite Party : Ajay Sengar, G.A.

IMPORTANT POINT
The jurisdiction for offenses under Section 138 of the Negotiable Instruments Act is determined by the location where the cheque was presented for collection, and a transfer of proceedings to the appropriate court does not invalidate prior actions taken in good faith by a court lacking jurisdiction.

Headnote:
JURISDICTION - NEGOTIABLE INSTRUMENTS ACT - Section 138, Section 142(2), Section 142A - The court discussed the jurisdictional provisions under the Negotiable Instruments Act, particularly Section 138 concerning dishonored cheques, and the amendments made to Section 142 and the introduction of Section 142A. It emphasized that the jurisdiction for trying such cases lies with the court where the cheque was presented for collection. The court interpreted these provisions to affirm that even if a court without jurisdiction initially took cognizance, the proceedings could be transferred to the appropriate court without vitiating the process, provided there was no failure of justice.
Fact of the Case:
The applicants sought to quash the proceedings of a complaint under Section 138 of the Negotiable Instruments Act, arguing that the initial cognizance was taken by a court lacking jurisdiction. The complaint was transferred to the appropriate court, but the applicants contended that a fresh cognizance should be taken.
Finding of the Court:
The court found that the initial cognizance taken by the Chief Judicial Magistrate at Orai was a bona fide mistake and that the subsequent transfer to the appropriate court did not invalidate the proceedings. The transferee court was deemed competent to continue from the stage reached in the earlier proceedings.
Issues: Whether the cognizance taken by a court without jurisdiction invalidates the proceedings, and whether the transferee court must start afresh or can continue from the previous stage.
Ratio Decidendi: The court held that under Sections 142(2) and 142A of the Negotiable Instruments Act, jurisdiction is determined by where the cheque was presented for collection. The court emphasized that a bona fide mistake regarding jurisdiction does not invalidate proceedings, and the transferee court can continue from the stage reached without requiring a fresh cognizance.
Final Decision: The application to quash the proceedings was dismissed, affirming the validity of the transfer and the continuation of the case in the transferee court.

Judgement Key Points

Based on the provided legal document, the key points are as follows:

Jurisdiction for offenses under Section 138 of the Negotiable Instruments Act is determined by the location where the cheque was presented for collection. A transfer of proceedings to the appropriate court does not invalidate prior actions taken in good faith by a court lacking jurisdiction (!) (!) .
If cognizance is initially taken by a court without proper jurisdiction, such an irregularity is considered a bona fide mistake and does not vitiate the proceedings. The subsequent transfer to a court with proper jurisdiction allows the case to continue from the stage reached without requiring a fresh cognizance (!) (!) (!) (!) .
The amendments to Section 142 and the introduction of Section 142A clarify that jurisdiction in cases under Section 138 is based on where the cheque was delivered for collection or presented for payment, and all cases are deemed to be transferred to the court with proper jurisdiction (!) (!) (!) .
The legal framework permits transfer of cases from courts without jurisdiction to courts with proper jurisdiction without invalidating prior proceedings, provided there is no failure of justice. The proceedings can be continued from the stage at which they were transferred (!) (!) .
Irregularities in taking cognizance by a court lacking jurisdiction do not necessarily vitiate the proceedings if the case is subsequently transferred to the correct court and the proceedings continue without causing a failure of justice (!) (!) .
The order rejecting the application to re-initiate proceedings after transfer was upheld, as the transfer and continuation of proceedings in the proper court were deemed lawful and did not cause any legal defect (!) .

In summary, the court emphasized that jurisdiction is primarily determined by the location where the cheque was presented or delivered for collection, and that proceedings initiated in good faith in a court lacking jurisdiction are valid if subsequently transferred to the proper court. The continuation from the transferred stage is permissible, and the proceedings are not invalidated solely due to initial irregularities in jurisdiction.

JUDGMENT :

Hon'ble Arun Kumar Singh Deshwal,J.

1. Heard Sri Mohd. Shamim, learned counsel for the applicants, Sri Ajay Sengar, learned counsel for opposite party no.2 and Sri Uday Bhan, learned AGA for the State.

2. The present 482 Cr.P.C. application has been filed to quash the entire proceedings of Complaint No. 40 of 2024 (Old Complaint no.5095/2019 and Complaint No.427 of 2021) (Smt. Iksharajey Versus Indraveer Singh and Another), under Section-138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'the Act, 1881'), Police Station-Kotwali Orai, District-Jalaun, pending in the Court of learned Judicial Magistrate, Jalaun, as well as impugned order dated 01.02.2024.

3. The contention of learned counsel for the applicants is that the cheque in question was presented in the account of opposite party no.2 in State Bank of India, Jalaun, but the complaint was filed at Orai. Thereafter, the applicants moved an application before the learned Sessions Judge, who by order dated 03.01.2024, transferred the case from Orai to Jalaun on the ground that the Court at Jalaun had jurisdiction as per Section-142(2) of the Act, 1881. After transferring this case to Jalaun, the applicants moved an application before the Court concerned, requesting that cognizance be taken by the Court at Orai, which was not competent to take cognizance. Therefore, a fresh proceeding of cognizance may be initiated, but the Judicial Magistrate, Jalaun, rejected that application.

4. Learned counsel for the applicant relied upon the judgment of Apex Court passed in the case of Yogesh Upadhyay and another Vs. Atlanta Limited, 2023 SCC Online SC 170, in which it is observed that when the cognizance was taken by the Court, which has no jurisdiction, then the amendment made in Section 142 of N.I. Act in pursuance of the judgment of Apex Court in the case of Dashrath Rupsingh Rathod Vs. State of Maharashtra, [(2014) 9 SCC 129], the complainant should be transferred to the Court with jurisdiction as per the amended provision.

5. Learned counsel for opposite party no.2 has submitted that even if the cognizance was taken by the Court having no jurisdiction is a bona fide mistake, then transferring the same to the Court having jurisdiction will not make the cognizance illegal and the transferee Court which will proceed further from the stage of enquiry or trial. Learned counsel also submits that as per sub-clause (2) of Section 142 of N.I. Act, an offence under Section 138 N.I. Act can be inquired into and tried only by a Court within whose local jurisdiction the cheque was presented for collection and bounced.

6. Learned counsel for opposite party no.2 has also relied upon the judgment of Madras High Court passed in Criminal Appeal No.398 of 2011, V. Velu, S/o. Vedappan Vs. Chennakrishnan, S/o. Venkataraman, in which Apex Court observed that if the cognizance was taken in good faith by the Court not having jurisdiction, the cognizance order could not be set aside because such irregularity will not vitiate the proceedings.

7. After hearing the rival submissions of learned counsel for the parties and on the perusal of the record, it appears that the impugned complaint was earlier filed before the Court of Chief Judicial Magistrate, Jalaun at Orai, who, after perusal of the complaint as well as a statement under Section 200 Cr.P.C. and also the documents on record, summoned the applicants. After that, on the applicant's application, that complaint was transferred to the Judicial Magistrate, Orai, District Jalaun, by the District Judge, Jalaun at Orai, by order dated 03.01.2024. After transferring the impugned complaint before the Court of Judicial Magistrate, Orai, District Jalaun, applicant no.1 filed an application on 01.02.2024 praying that the earlier summoning order passed by Chief Judicial Magistrate, Jalaun at Orai was without jurisdiction. Therefore, the complaint should be heard again on merit, and a fresh summoning order may be passed, but that application was