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CHEQUE BOUNS CASE

JURISDICTION – TRANSFER OF CASE =” It is one thing to say that sending of a notice is one of the ingredients maintaining the complaint but it is another thing to say that dishonour of a cheque by itself constitutes an offence. For the purpose of proving its case that the accused had committed an offence under Section 138 of the Negotiable Instruments Act, the ingredients thereof are required to be proved. What would constitute an offence is stated in the main provision. The proviso appended thereto, however, imposes certain further conditions which are required to be fulfilled before cognizance of the offence can be taken. If the ingredients for constitution of the offence laid down in provisos (a), (b) and (c) appended to Section 138 of the Negotiable Instruments Act are intended to be applied in favour of the accused, there cannot be any doubt that receipt of a notice would ultimately give rise to the cause of action for filing a complaint. As it is only on receipt of the notice that the accused at his own peril may refuse to pay the amount. Clauses (b) and (c) of the proviso to Section 138 therefore must be read together. Issuance of notice would not by itself give rise to a cause of action but communication of the notice would. 13. Now it is very clear that the place of issuance of notice would not by itself give rise to cause of action, but the above referred five Acts which constitute an offence in any one area alone confers jurisdiction. 15. It is also well settled that the jurisdiction has to be taken only from the allegation found in the complaint. According to the complaint, the transaction took place and the cheque was issued at the territorial jurisdiction of Aruppukottai. The other two components namely, the place of the drawee bank and the receipt of notice were at Chennai. The presentation of the cheque at holder’s bank and the place of issue of notice do not confer territorial jurisdiction. When the complainant had two alternatives, it is for him to chose the jurisdiction. Simply because of parties are residing at Chennai, can not be a valid reason to transfer the case to the courts at Chennai. The other leg of the argument that the petitioner, being the lady and she cannot travel to Aruppukottai, need not be considered as she can approach the learned Magistrate for dispensing with her personal appearance and be represented through a counsel and can appear before the Court, as and when required by the Court.

IN THE HIGH COURT OF JUDICATURE AT MADRAS

The Ripon Building, the headquarters of Chenna...

The Ripon Building, the headquarters of Chennai Corporation in Chennai. Français : Le Ripon building, siège de l’Hôtel de ville de Chennai (Madras), en Inde. (Photo credit: Wikipedia)

DATED: 1 -2-2011

CORAM

THE HONOURABLE MR. JUSTICE G.M. AKBAR ALI
CRL.O.P.No.8673 of 2010
and M.P.No.1 of 2010
Mrs.Nagalakshmi … Petitioner

vs

Kadar Basha … Respondent
Criminal Original Petition filed under Section 482 Cr.P.C. for the reliefs as stated therein.

For petitioner : Mr.M.R. Murali

For respondent : Ms.A. Ajimath Begam
ORDER
The petition is filed seeking a direction to withdraw and transfer C.C.No.400/2009 on the file of Additional Judicial Magistrate, Aruppukkottai to any Courts of competent jurisdiction in the City of Madras.

2. The petitioner is an accused in C.C.No.400 of 2009, which is a private complaint filed by the respondent under Sec.138 of Negotiable Instruments Act (hereinafter referred to as “Act). According to the respondent, the petitioner came to his native place Poolangal Village in Aruppukottai at Virudhunagar on 25.10.2008 and obtained a loan of Rs.6,50,000/- and promised to repay the same with interest, but failed. According to the respondent, the petitioner issued two cheques, drawn on State Bank of India, Anna Nagar West on 4.7.2009 and the same was deposited by the respondent on 16.7.2009 and on 19.8.2009 at his bank at Poolangal, which is Indian Bank, but the same was returned with an endorsement “No sufficient fund”, on 23.7.2009 and on 25.8.2009 by the payee bank. Thereafter, the respondent issued notices demanding payment and on failure, initiated proceedings under Sec.138 of the Act before the learned Judicial Magistrate at Aruppukottai. The same was taken on file by the learned Judicial Magistrate. The address of the petitioner was given at Muthamizh Nagar, Kodungaiyur, Chennai-118.

3. On receiving of summons at Chennai, the petitioner has filed the present application for transfer of the case from the court of the learned Judicial Magistrate, Aruppukottai to any of the Courts at Chennai on the following grounds:
i) the petitioner as well as the respondent are residing only at Chennai and the respondent is running a foot wear shop at Chennai.

ii) there were transactions only between the husband of the petitioner and the respondent.

iii) the respondent has given complaint to the Commissioner of Police and the husband of the petitioner has also given complaint against one Shaukth Ali, brother of the respondent only at Chennai and the respondent has given his address at Meenakshi Nagar, Pallavaram, Chennai.

iv) the alleged amount was paid and become due and payable between the respondent and the petitioner’s husband was only at Chennai.

4. However, the main point argued before this court for transfer of the case is that both the parties are residing only at Chennai and only to harass the petitioner, the respondent has initiated the proceedings in Aruppukottai.

5. Mr.M.R. Murali the learned counsel for the petitioner would submit that when both the parties are residing at Chennai and the alleged cheque has been drawn on the bank at Chennai, it is convenient for the parties to conduct the trial only at Chennai. The learned counsel relied on a decision reported in 2008 CLT Supp 136 (A. Alima vs A. Charles Vincent Paul), wherein this court has relied on a decision reported in AIR 2000 SC 1639 (Mr.Ayyannar Agencies and another vs Sri Vishnu Cement Ltd and another) and has ordered transfer on the ground that the parties are residing at Chennai.

6. In AIR 2000 SC 1639, the Apex Court has observed as follows:
” that one complaint was filed before the Metropolitan Magistrate at Hyderabad against the petitioners in respect of two cheques that too for the same offence under Section 138 of the Negotiable Instruments Act. This petition is for transferring that case to Metropolitan Magistrate, Chennai as parties in all the cases are the same and the offence is of the same nature though sprouted from different cheques. It would be advantageous to all the parties to have all the said cases before the same Court contended the learned counsel. We also feel that the transfer prayed for could only be in the interest of justice and also for the convenience of conducting the trial and disposal of all the cases. We, therefore, order transfer of C.C.No.808 of 1998″.

7. On the contrary, Mr.A. Azimath Begam, the learned counsel for the respondent would submit that the loan transaction took place at Poolangal village within the jurisdiction of the learned Judicial Magistrate, Aruppukottai and the cheque was issued at the same place, the cheque was presented at the same place and the returned intimation was received in the same place. Based on which, notice was also issued from the same place. Therefore, the private complaint was filed before the Court, which has the territorial jurisdiction. The learned counsel relied on a decision reported in (1997 (7) SCC 510 (K. Bhaskaran vs Sankaran Vaidhyan Balan and Another).

8. The learned counsel also relied on the latest judgment of the Delhi High Court delivered on 2.7.2010 in Crl.M.C.No.872 of 2010, reported in Indian Kanoon, on line reporter, wherein the Delhi High Court has held that

“20. A perusal of the complaints filed by the complainant Company against the accused persons in the present case would show that the following cause of actions persist within the jurisdiction of Delhi courts:
“(i) The complainant company is having its registered office at New Dehi and maintaining all the records and doing its business from its registered office, i.e., from Nehru Place, New Delhi;
(ii) The loan agreement is the written documentary evidence which was executed between the petitioner and the
Crl.M.C.Nos.872, 1148 and 1235/2010 page 11 of 12 accused in Delhi
(iii) The cheque was handed over by the accused to the complainant at Delhi;
(iv) The cheque was presented to the payee bank, i.e., Presenting bank in Delhi
(v) The cheque was dishonoured by the drawer bank’s clearing branch which situates at New Delhi.
(vi) The complainant came to know about the dishonour of cheque within the jurisdiction of this Hon’ble Court;
(vii) The parties to the agreement in terms of the agreement conferred the jurisdiction upon the courts at New Delhi alone; and
(viii) Legal demand notice was issued from Delhi”.
21. From the above, it is crystal clear that most and substantial part of cause of action for filing o complaint by the complainant company against the accused persons under Section 138 of the NI Act had arisen within the jurisdiction of the courts at Delhi. Hence, the impugned orders of the court below holding that no part of cause of action has arisen in Delhi, on the face of it are illegal and unlawful and against the factual matrix of the case.”

9. Heard and perused the materials available on record.

10. It is well settled that there are five essentials to constitute an offence under Sec.138 of the Act.
1. Drawing of the cheque
2. Presentation of the cheque to the bank of the payee
3. Return of the cheque unpaid by the drawee bank
4. Giving of notice to the drawer of the cheque demanding payment of the cheque amount and
5. Failure of the drawer to make payment within fifteen days of he receipt of the notice.

11. The question of jurisdiction in complaints under Section 138 of the NI Act came up for consideration before the Hon’ble Supreme Court in the case of K. Bhaskaran vs Sankaran Vaidhyan Balan and Another (1997 (7) SCC 510 and the Hon’ble Supreme Court referring to the above referred five components which constitute offence under Section 138 of the Act has held that if these five different acts were done in five different localities, any one of the courts exercising jurisdiction in one of the five local areas can become the place of trial for offence under Section 138 of the Act and the complainant can choose any one of those courts having jurisdiction over any one of those local areas where any of these five acts was done. The Apex Court has held as follows:

” The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. The following are the acts which are components of the said offence; (1) drawing of the cheque, (2) presentation of the cheque to the bank, (3) returning the cheque unpaid by the drawee bank, (4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, (5) failure of the drawer to make payment within 15 days of the receipt of the notice”

12. In the case of Harman Electronics Private Limited and another vs National Panosonic India Private Limited , reported in 2009(1) SCC 720, the Hon’ble Supreme Court held as follows:

“13. It is one thing to say that sending of a notice is one of the ingredients maintaining the complaint but it is another thing to say that dishonour of a cheque by itself constitutes an offence. For the purpose of proving its case that the accused had committed an offence under Section 138 of the Negotiable Instruments Act, the ingredients thereof are required to be proved. What would constitute an offence is stated in the main provision. The proviso appended thereto, however, imposes certain further conditions which are required to be fulfilled before cognizance of the offence can be taken. If the ingredients for constitution of the offence laid down in provisos (a), (b) and (c) appended to Section 138 of the Negotiable Instruments Act are intended to be applied in favour of the accused, there cannot be any doubt that receipt of a notice would ultimately give rise to the cause of action for filing a complaint. As it is only on receipt of the notice that the accused at his own peril may refuse to pay the amount. Clauses (b) and (c) of the proviso to Section 138 therefore must be read together. Issuance of notice would not by itself give rise to a cause of action but communication of the notice would.

13. Now it is very clear that the place of issuance of notice would not by itself give rise to cause of action, but the above referred five Acts which constitute an offence in any one area alone confers jurisdiction.

14. The petitioner has come forward seeking transfer on two grounds viz., the parties are residing at Madras and the alleged transaction was only at Madras between the respondent and the petitioner’s husband. According to the complaint, the loan amount was paid only at Poolangal village and the cheque , though drawn on a bank at Chennai, was handed over only at the same village, presented at the same place.

15. It is also well settled that the jurisdiction has to be taken only from the allegation found in the complaint. According to the complaint, the transaction took place and the cheque was issued at the territorial jurisdiction of Aruppukottai. The other two components namely, the place of the drawee bank and the receipt of notice were at Chennai. The presentation of the cheque at holder’s bank and the place of issue of notice do not confer territorial jurisdiction. When the complainant had two alternatives, it is for him to chose the jurisdiction. Simply because of parties are residing at Chennai, can not be a valid reason to transfer the case to the courts at Chennai. The other leg of the argument that the petitioner, being the lady and she cannot travel to Aruppukottai, need not be considered as she can approach the learned Magistrate for dispensing with her personal appearance and be represented through a counsel and can appear before the Court, as and when required by the Court.

16. In the result, the petition stands dismissed. Consequently, connected MP is closed.

 

 

 

 
sr

To

The Additional Judicial Magistrate,
Aruppukkottai

 

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