Madras High Court
T.Thirumalai Nambi vs M/S.Grishi Mango Products And on 4 March, 2015
Author: S.Vaidyanathan
Bench: S.Vaidyanathan
Before the Madurai Bench of Madras High Court Date: 04 -03-2015 Coram The Hon?ble Mr.Justice S.Vaidyanathan Crl.O.P.(MD)No.19289 of 2014 T.Thirumalai Nambi .. Petitioner Versus 1. M/s.Grishi Mango Products and Exports Tamil Nadu Pvt.Ltd., Rep. by its Chief Executive Officer-Director M.E.Prasanna 2. E.Prasanna 3. P.Pratap Singh 4. P.Rajesh Kumar .. Respondents Prayer This Criminal Original Petition is filed under Section 482 of Cr.P.C., praying to set aside the order of return of STC No.(unnumbered) of 2014, dated 16.9.2014 on the file of the Judicial Magistrate, FTC at Madurai and consequently to direct to take the complaint on file and proceed in accordance with law. !For Petitioner : Mr.P.Muthuvijayapandian ^For Respondents : Mr.P.Kandasamy Government Advocate(Crl. Side) :ORDER
Aggrieved over the order of the learned Judicial Magistrate, FTC at Madurai, dated 16.9.2014, in and by which, a complaint preferred by the petitioner against the respondents herein under Section 200 Cr.P.C. for the offence punishable under Section 138 of the Negotiable Instruments Act, came to be returned for want of jurisdiction.
2. The brief facts are that the petitioner presented a cheque for encashment on 12.6.2014 at Karur Vysya Bank Limited, Thallakulam, Madurai issued by the first respondent and it was returned by the said Bank, stating the reason that the funds available in the account were insufficient. The petitioner issued a legal notice dated 30.6.2014 to the respondents, which were also returned with endorsement ?refused?. Hence, the petitioner filed a complaint under Section 200 Cr.P.C. before the learned Judicial Magistrate, FTC at Madurai.
3. While following the decision of the Hon?ble Apex Court in ?Dasarath versus State of Maharashtra? (Criminal Appeal No.2287 of 2009), by order, dated 16.9.2014, the learned Magistrate has returned the complaint, stating that the complaint has to be presented where the cheque has been dishonoured at and that the encashing branch by no means, becomes the drawee bank for the reason that before encashing the cheque at par, the branch in question is expected to verify from the drawee branch whether or not there was any impediment in encashment of the cheque drawn at the said Branch.
4. According to the learned counsel for the petitioner, though the cheque drawn at Karur Vysya Ban at Erode, the same can be presented at any of the branches of the said bank and thereby, the place where the cheque has been dishonoured must be considered as jurisdictional point and in this case, since the cheque in question has been dishonoured at Karur Vysya Bank, Thallakulam, the Court below has erred in returning the complaint instead of taking cognizance of the same. He relied upon a decision of the Bombay High Court in ?Ramanbhai Mathurbhai Patel V State of Maharashtra [2014(3) KHC 847 (BOM)]?, in which it has been held that if it is a cheque payable at par, the Court within whose jurisdiction, the bank it was presented and returned will get jurisdiction to entertain the complaint.
5. In this regard, it is worthwhile to refer the decision of Kerala High Court in ?T.S.Suresh Babu versus P.M.Manzoor and another? in Crl.Rev.Petn.No.1947 of 2014, wherein, after taking note of the above said decision of the Bombay High Court, it has been held as under:
?3. Considering the fact that the judgment of the Bombay High Court has been challenged by the complainant before the Hon'ble Supreme Court by filing petitions for Special Leave to appeal (Criminal) No.7251/2014, and the Hon'ble Supreme Court has granted interim stay of the operation of the order, this court felt that the revision can be disposed of at the admission stage itself after hearing the learned counsel appearing for the revision petitioner and the learned Public prosecutor appearing for the second respondent and dispensing with notice to the first respondent.
4. The counsel for the revision petitioner submitted that in view of the decision of the Bombay High Court mentioned above in the case of cheques issued at par, then the branch in which it was presented and dishonoured will be deemed to be the bank dishonouring the cheque giving jurisdiction to the Magistrate within whose jurisdiction that bank is situated to entertain the complaint. It is true that the Bombay High Court has taken a view in the decision mentioned above namely, Ramanbhai Mathurbhai Patel V State of Maharashtra [2014(3) KHC 847 (BOM)] that in the case of cheque issued at par then the bank in which it was presented and dishonoured will be deemed to be the drawee bank for the purpose of dishonour and court within whose jurisdiction that bank is situated will get jurisdiction to entertain the complaint explaining the decision of the Apex Court in Dashrath Rupsingh Rathod V. State of Maharashtra and Another [2014 (3) KHC 362], (supra).
Since, the Hon'ble Supreme Court has stayed the operation of that order, then it cannot be said that the dictum is still in force so as to have a binding effect as well. Further, it was a decision of another High Court which has got only persuasive value for this court and in fact it is not having binding effect as well. But however, in view of the fact that the judgment in that case has been stayed by the Supreme Court, it cannot be taken as a case still having binding force so as to follow and in such circumstances, the dictum laid down in the decision of the Supreme Court mentioned above will prevail and the order passed by the court below returning the complaint for presentation before proper court cannot be said to be illegal which warrants interference at the hands of this court invoking the revisional power under section 397 of the Code of Criminal Procedure. So, the revision lacks merit and the same is liable to be dismissed. However, if the complainant files the complaint within two weeks from today before the appropriate court as directed as per order in Annexure-A5, then it will be deemed to be filed within time, as mentioned by the Supreme Court in the decision reported in Dashrath Rupsingh Rathod V. State of Maharashtra and Another [2014 (3) KHC 362], (supra).?
Therefore, in view of the fact that the judgment of the Bombay High Court in ?Ramanabhai?s case (cited supra) was stayed by the Hon?ble Apex Court, the ratio decided in the said decision cannot be made applicable to the present case.
6. A perusal of the records, it reveals that both the petitioner and respondents are having their respective accounts in Karur Vysya Bank Limited and its branches at Tallakulam, Madurai and Erode. The first respondent issued a cheque to the petitioner drawn at Karur Vysya Bank, Erode, which was presented by the petitioner in its Branch at Thallakulam, Madurai, where it has been dishonoured. It is no doubt true that the cheque issued by the first respondent is payable at par at all its branches of Karur Vysya Bank and the petitioner can present it at any of its branches for encashment. However, it is to be noted that the cheque amount is to be paid from the account of accused/ respondents maintained at home branch of drawee bank. Of-course, facility has been provided for encashment of cheques payable at par at any branch irrespective of the holder not having back account in the branch where the cheque is presented, but such presentation of the cheque at non-home of drawee bank itself cannot change the character of drawee bank and it would not confer territorial jurisdiction. It is to be noted that that before encashing the cheque payable at par, the non-home branch is still required to verify from home branch of the drawee branch as to whether or not there was any impediment in encashment of the cheque drawn at home branch. Therefore, ultimate result of honoring or dishonoring the cheque will be from the home branch alone and hence, the place where the home branch is situated is having jurisdiction to try the offence under Section 138 of NI Act.
7. The issue of territorial jurisdiction of Court to try the offence under Section 138 of NI Act has been set at rest by the decision of three Judges Bench of the Hon"ble Supreme Court of India in ?Dashrath Rupsingh Rathod? (2014) 9 SCC 129, wherein the Hon?ble Supreme Court observed as under in para 21 and 22: -
"21. The interpretation of Section 138 of the NI Act which commends itself to us is that the offence contemplated therein stands committed on the dishonour of the cheque, and accordingly JMFC at the place where this occurs is ordinarily where the complaint must be filed, entertained and tried. The cognizance of the crime by JMFC at that place however, can be taken only when the concomitants or constituents contemplated by the section concatenate with each other. We clarify that the place of the issuance or delivery of the statutory notice or where the complainant chooses to present the cheque for encashment by his bank are not relevant for purposes of territorial jurisdiction of the complaints even though non- compliance therewith will inexorably lead to the dismissal of the complaint. It cannot be contested that considerable confusion prevails on the interpretation of Section 138 in particular and Chapter XVII in general of the NI Act. The vindication of this view is duly manifested by the decisions and conclusion arrived at by the High Courts even in the few cases that we shall decide by this judgment. We clarify that the complainant is statutorily bound to comply with Section 177, etc. of CrPC and therefore the place or situs where the Section 138 complaint is to be filed is not of his choosing. The territorial jurisdiction is restricted to the court within whose local jurisdiction the offence was committed, which in the present context is where the cheque is dishonoured by the bank on which it is drawn.
?22. We are quite alive to the magnitude of the impact that the present decision shall have to possibly lakhs of cases pending in various courts spanning across the country. One approach could be to declare that this judgment will have only prospective pertinence i.e. applicability to complaints that may be filed after this pronouncement. However, keeping in perspective the hardship that this will continue to bear on alleged respondent-accused who may have to travel long distances in conducting their defence, and also mindful of the legal implications of proceedings being permitted to continue in a court devoid of jurisdiction, this recourse in entirety does not commend itself to us. Consequent on considerable consideration we think it expedient to direct that only those cases where, post the summoning and appearance of the alleged accused, the recording of evidence has commenced as envisaged in Section 145(2) of the Negotiable Instruments Act, 1881, will proceeding continue at that place. To clarify, regardless of whether evidence has been led before the Magistrate at the pre- summoning stage, either by affidavit or by oral statement, the complaint will be maintainable only at the place where the cheque stands dishonoured. To obviate and eradicate any legal complications, the category of complaint cases where proceedings have gone to the stage of Section 145(2) or beyond shall be deemed to have been transferred by us from the court ordinarily possessing territorial jurisdiction, as now clarified, to the court where it is presently pending. All other complaints (obviously including those where the respondent-accused has not been properly served) shall be returned to the complainant for filing in the proper court, in consonance with our exposition of the law. If such complaints are filed/refiled within thirty days of their return, they shall be deemed to have been filed within the time prescribed by law, unless the initial or prior filing was itself time-barred."
Further, ultimately, the Hon?ble Supreme Court has held as under in para 58:
?58. To sum up:
58.1. An offence under Section 138 of the Negotiable Instruments Act, 1881 is committed no sooner a cheque drawn by the accused on an account being maintained by him in a bank for discharge of debt/liability is returned unpaid for insufficiency of funds or for the reason that the amount exceeds the arrangement made with the bank.
58.2. Cognizance of any such offence is however forbidden under Section 142 of the Act except upon a complaint in writing made by the payee or holder of the cheque in due course within a period of one month from the date the cause of action accrues to such payee or holder under clause (c) of proviso to Section 138.
58.3. The cause of action to file a complaint accrues to a complainant/ payee/ holder of a cheque in due course if:
(a) the dishonoured cheque is presented to the drawee bank within a period of six months from the date of its issue,
(b) if the complainant has demanded payment of cheque amount within thirty days of receipt of information by him from the bank regarding the dishonour of the cheque, and
(c) if the drawer has failed to pay the cheque amount within fifteen days of receipt of such notice.
58.4. The facts constituting cause of action do not constitute the ingredients of the offence under Section 138 of the Act. 58.5. The proviso to Section 138 simply postpones/defers institution of criminal proceedings and taking of cognizance by the court till such time cause of action in terms of clause (c) of the proviso accrues to the complainant.
58.6. Once the cause of action accrues to the complainant, the jurisdiction of the court to try the case will be determined by reference to the place where the cheque is dishonoured.
58.7. The general rule stipulated under Section 177 CrPC applies to cases under Section 138 of the Negotiable Instruments Act. Prosecution in such cases can, therefore, be launched against the drawer of the cheque only before the court within whose jurisdiction the dishonour takes place except in situations where the offence of dishonour of the cheque punishable under Section 138 is committed along with other offences in a single transaction within the meaning of Section 220(1) read with Section 184 of the Code of Criminal Procedure or is covered by the provisions of Section 182(1) read with Sections 184 and 220 thereof.?
? ? ? ??
8. Having regard to the above decision of the Apex Court and on a perusal of the provisions contained in Section 138 read with Section 142 of NI Act, I am of the view that the complaint filed under Section 138 of NI Act will be maintainable only at the place where the cheque stands dishonoured, to put it differently, the prosecution for the offence under Section 138 of NI Act would only lie at the place where the drawee bank is situated. Therefore, I do not find any irregularity in the order of the learned Magistrate, returning the complaint for want of jurisdiction in order to interfere with the same.
Accordingly, the Criminal Original Petition is dismissed.
Suk 04-03-2015 Index: Yes/No Internet: Yes/No S.VAIDYANATHAN, J.
Suk PRE DELIVERY ORDER IN Crl.O.P.(MD)No.19289 of 2014 04-03-2015