Madras High Court
Trilux Technologies Singapore Pvt. ... vs Boon Technologies Rep. By Its Manager ... on 29 March, 2004
Equivalent citations: IV(2004)BC280, [2005]123COMPCAS551(MAD), 2004(4)CTC12
Author: S. Ashok Kumar
Bench: S. Ashok Kumar
ORDER S. Ashok Kumar, J.
1. This Criminal Original Petition has been filed to quash the complaint in C.C.No. 3610 of 2002, pending on the file of the IX Metropolitan Magistrate Court, Saidapet, Chennai as far as the petitioners are concerned.
2. The brief facts of the case are as follows:-
The respondent filed a complaint against the petitioners and others who were Directors of M/s.Trilux Technologies Singapore Ltd., at Singapore for alleged offences under Sections 138 and 142 of the Negotiable Instruments Act. According to the complainant, he developed a software and exported the same to the accused-company in the month of December, 2001 which was confirmed by the accused by their letter dated 18.12.2001. The accused sent two cheques dated 18.2.2002 for U.S.$ 7800 each drawn on Overseas Chinese Bank of Corporation Ltd., Singapore, in the Foreign Currency Account and the cheques were sent by the 7th accused on behalf of the first accused. The other accused are holding posts in the company as Directors and they are responsible for the day to day administration of the business. When the cheques were presented at Andhra Bank, Ashok Nagar Branch, Chennai, the cheques were dishonoured on 26.3.2002 for the reason "refer to drawer" and the complainant received the said intimation from the Bankers on 5.4.2002. When the complainant issued statutory notice demanding payment of money, the notices were served on the 3rd and the 7th accused and notices to other accused returned as "refused". Hence a complaint was lodged against all the accused before the IX-Metropolitan Magistrate, Chennai.
3. The only contention urged on behalf of the petitioner is that the cheques were drawn at Singapore, on a foreign Bank Account at Singapore and therefore a complaint could not be lodged for dishonour of the cheques at Madras.
4. The complainant has entered into a contract with A-1 for developing and hosting Web based Tutorials of various subjects at a fixed price of US$ 7800 and the first petitioner has agreed to pay US$ 7800 per title and an invoice may be raised on successful completion of the work. There is no dispute that the complainant-respondent complweted the job requirement to A.1. There is also no denial of liability by A-1 towards payment. On the other hand the two cheques dated 18.2.2002 for US$ 7800 each issued by A.1 drawn on M/s.Overseas Chinese Banking Corporation Ltd., Chulia Street, Singapore Foreign Currency Accounts, when presented in the complainant's Bank viz., Andhra bank, Ashok Nagar Branch, Madras, were dishonoured by the bankers of the accused on 26.3.2002 for the reason "refer to drawer" and the intimation was received by the complainant from the bankers on 5.4.2002. Statutory Notice was also issued by the complainant which was served on the 3rd, 7th accused and the notices sent to the other accused were returned as "refused", which resulted in the filing of the complaint. 2nd 3rd, and 4th accused are Directors of the first petitioner/A-1 who are residents of Madras. The accused 5, 6 and 7 are residents of Singapore and the first petitioner-Company is also situate at Singapore.
5. The contention of the petitioners is that the Courts in India (Madras) have no jurisdiction on the ground that the cheques were drawn on a Foreign Bank at Singapore and therefore payable at Singapore only and thus there is no jurisdiction for a court in Madras.
6. In this respect, it is relevant to refer to the statutory provisions contained in the Negotiable Instruments Act. Section 135 of the Negotiable Instruments Act reads as follows:-
"135: Law of Place of Payemnt Governs Dishonour:- Where a promissory note, bill of exchange or cheque is made payable in a different place from that in which it is made or indorsed, the law of the place where it is made payable determines what constitutes dishonour and what notice of dishonour is sufficient".
7. Section 136 of the Act reads thus:-
"136. Instruments Made, Etc., out of India but in Accordance With The Law of India:- If a negotiable instrument is made, drawn, accepted or indorsed outside India, but in accordance with the law of India the circumstance that any agreement evidenced by such instrument is invalid according to the law of the country wherein it was entered into does not invalidate any subsequent acceptance or indorsement made thereon within India".
8. Section 137 of the Act reads as follows:-
"757. Presumption as to Foreign Law:-
The law of any foreign country regarding promissory notes, bills of exchange and cheques shall be presumed to be the same as that of India, unless and until the contrary is proved."
9. From the above provisions, it is clear that any agreement evidenced or an instrument is invalidated according to the law of the country wherein it was entered into, does not invalidate any subsequent acceptance or indorsement made thereon within India and the law of any foreign country regarding promissory note, bills of exchange, cheques shall be presumed to be the same as that of India unless and until the contrary is proved.
10. Though the two cheques, subject matter of the case were drawn by A-1, Company by using the cheques of their account at a Bank in Singapore, it is pertinent to note that the complainant has no such account in the said bank or in any other Bank in Singapore. The amount is payable in the place where the complainant-company is situate i.e., at Madras and that is why the respondent-complainant has presented the cheques for collection at a Bank at Madras. If the contention of the petitioners-accused that Courts in India will have no jurisdiction on the dishonour of cheques issued by a foreign bank is accepted, then no company in India can enter into contracts with foreign companies and receive payments for the works executed by the Indian companies on the orders of the foreign companies. If the petitioners contention is accepted, it will result in calamity and chaos for all the Indian companies which will be deprived of their hard earned money on a technical question of law which is not in existence. Section 136 and 137 are sufficient safeguards for the companies in India to proceed against the foreign companies if any negotiable instrument is made, drawn, accepted or indorsed outside India, but in accordance with law of India they are liable to be paid in India, and if those instruments are dishonoured, there is no bar for prosecution of the drawer of the cheques in India. Therefore, the contention of the petitioners-accused fail and the Criminal Original Petition is dismissed.
Consequently, connected Crl.M.Ps are closed.