Madras High Court
St.Mary'S Educational And Charitable ... vs M/S Garabandal Construction Pvt Ltd on 18 August, 2014
Author: N.Kirubakaran
Bench: N.Kirubakaran
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 18.08.2014
CORAM
THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN
Crl.O.P(MD)No.6410 of 2014
and
M.P(MD)Nos.1 and 2 of 2014
1.St.Mary's Educational and Charitable Trust
I.G.P. Complex Floor,
Chitramcode, Manalikarai Post,
Kanyakumari District - 629 164.
2.Mr.G.John Christopher,
Director,
I.G.P. Complex Floor,
Chitramcode, Manalikarai Post,
Kanyakumari District - 629 164.
3.Mrs.Succor Mary Darling Rose,
W/o Mr.G.John Christopher,
Trustee,
I.G.P. Complex I Floor,
Chitramcode, Manalikarai Post,
... Petitioners/Petitioners
Vs
M/s Garabandal Construction Pvt Ltd.,
No.L.6 MIG Block,
Foreshore Estate,
Chennai 600 028.
Rep. by its Managing Director,
S.Leenus. ... Respondent / Complainant
Prayer
Petition under Section 482 of the Code of Criminal Procedure, to
withdraw the C.C.No.160 of 2012 from the learned Metropolitan Magistrate,
Saidapet, Chennai and the same may be transferred to the Court of the learned
Principal District and Sessions Judge, Nagercoil for appropriate allotment.
For Petitioners : Mr.Veerakathiravan
#For Respondent : Mr.S.Doraisamy
Govt.Advocate(Crl.Side)
:ORDER
This Criminal Original Petition has been filed by the accused, who are facing the proceedings under Section 138 of the Negotiable Instruments Act, seeking to transfer the above said 138 proceeding initiated by the respondent on the file of the Metropolitan Magistrate, Saidapet, Chennai to the Principal District and Sessions Judge, Nagercoil or to any other Court at Nagercoil, on the ground that the entire cause of action for initiation of the proceedings is conferred upon or restricted only to Nagercoil jurisdiction as per the agreement dated 18.05.2009 entered into between the petitioners and the complainant, and also on the basis of the judgement of the Honourable Supreme Court in Dashrath Rupsigh Rathod vs. State of Maharashtra reported in 2014(4) CTC 666.
2. Heard Mr.Veerakathiravan, learned counsel appearing for the petitioners/accused and Mr.S.Doraisamy, learned Senior Counsel appearing for the respondent/complainant.
3. It is not in dispute that pursuant to construction agreement dated 18.05.2009, the petitioners entrusted the work of construction of building for an Engineering College at Nagercoil with the respondent/complainant by agreement dated 20.05.2009. In the course of execution of the contract, cheques were given to the respondent. The said cheques were dishonoured, resulting in, filing of the impugned proceedings before the Metropolitan Magistrate, Saidapet, Chennai. However, the petitioner/accused approached this Court for transfer of the case, for the reasons stated above.
4. Mr.Veerakathiravan, learned counsel appearing for the petitioners/accused would submit that (i) the work is not completed (ii) the agreement restricts the jurisdiction only with regard to Nagercoil (iii) the cheques were not given towards payment and it is only towards the security
(iv) the evidence of the accused is available only at Nagercoil (v) as per the judgment of the Honourable Supreme Court reported in 2014(4) CTC 666 (cited supra), the complaint is maintainable where the cheque got dishonoured, (vi) the Honourable Supreme Court already decided that the matter has to be transferred to jurisdiction. Therefore, he seeks transfer.
5. On the other hand, Mr.S.Doraisamy, learned senior counsel appearing for the respondent/complainant would submit the followings:- (i) the cheques were issued towards discharge of the liability (ii) the work was completed and the building was handed over to the petitioners (iii) once the work is over, the agreement comes to an end (iv) there is no question of giving the cheque by way of security (v) the petitioners submitted to the jurisdiction of Chennai Court and it is in the part-heard stage (vi) as per the Judgment reported in 2014(4) CTC 666 (cited supra) the judgment will not be applicable as pointed out in para 20, when the case crossed the pre-summons stage and in this case, the matter is in part heard stage. Therefore, he seeks to dismiss the transfer petition.
6. Heard the parties and perused the records.
7. There is no dispute with regard to the entering into the agreement of construction of Engineering College at Nagercoil. A perusal of the agreement dated 20.05.2009 would categorically declare that the stamp paper was purchased in Nagercoil and it was executed at Nagercoil and the work contract has to be executed at Nagercoil. The cheques were issued at Nagercoil. In case there is dispute with regard to the agreement, the jurisdiction of Nagercoil Court alone is attracted. Clause 21 of the said agreement reads as follows:-
"21. All disputes arising out of or in any way connected with this agreement shall be deemed to have arisen in Nagercoil only the courts in Nagercoil shall have jurisdiction to determine the same."
Therefore, the entire cause of action arose only at Nagercoil, as the agreement takes away the jurisdiction of Chennai, which would also have the jurisdiction but for the agreement.
8. Though the respondent would contend that the entire work was executed, there is no document produced by the respondent to show that the work was completed and the possession was handed over to the petitioners and it was acknowledged by the petitioners. Mr.S.Doraisamy, learned senior counsel would seriously contend that after completion of the work only towards discharge of liability only, the cheques were issued. However, it is pertinent to note that Section 138 notice dated 14.12.2011 issued by the respondent itself would speak about completion of 95% construction only and it goes without saying the work was not completed and the agreement is in force. In view of that, it is futile contend to that the work was already completed. Therefore, Nagercoil alone has jurisdiction.
9. The only point which is favourable to the respondent is that the petitioners took part in the proceeding before Chennai Court and the matter is in part heard stage. However, considering the matter in toto and the evidence of the P.W.1, with regard to jurisdiction and also the judgment of the Honourable Supreme Court reported in 2014(4) CTC 666 (cited supra) which categorically states that the dishonour of cheque alone would give the cause of action and the 138 proceedings have to be maintained. Paragraphs 18, 19 and 20 of the said judgment are extracted usefully as follows:-
"18. We feel compelled to reiterate our empathy with a payee who has been duped or deluded by a swindler into accepting a cheque as consideration for delivery of any of his property; or because of the receipt of a cheque has induced the payee to omit to do anything resulting in some damage to the payee. The relief introduced by Section 138 of the NI Act is in addition to the contemplations in the IPC. It is still open to such a payee recipient of a dishonoured cheque to lodge a First Information Report with the Police or file a Complaint directly before the concerned Magistrate. If the payee succeeds in establishing that the inducement for accepting a cheque which subsequently bounced had occurred where he resides or ordinarily transacts business, he will not have to suffer the travails of journeying to the place where the cheque has been dishonoured. All remedies under the IPC and Cr.PC are available to such a payee if he chooses to pursue this course of action, rather than a Complaint under Section 138 of the NI Act. And of course, he can always file a suit for recovery wherever the cause of action arises dependent on his choosing.
19. 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 the JMFC at the place where this occurs is ordinarily where the Complaint must be filed, entertained and tried. The cognizance of the crime by the 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 thereof 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 the 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.
20. 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 accused/respondents 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 accused/respondent 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.
10. Though there is an exception with regard to the cases where the post summoning and the appearance of the alleged accused, the recording of evidence has commenced as envisaged in Section 145(2) of the Negotiable Instrument Act 1881, will proceed to continue at that place. In view of the above mentioned facts and also the agreement, it is appropriate to transfer the proceedings from Chennai to Nagercoil court. However, the recording of evidence of the respondent has already commenced before the Chennai Court and the respondent is directed to complete their side evidence before Chennai Court and for recording of evidence of the petitioners/accused and also for final disposal, the matter is directed to be transferred to Principal District and Sessions Court, Nagerocoil.
10. Considering the fact that the matter is of the year 2011, it is appropriate to direct the trial Court to complete the evidence and dispose of the matter within four months from the date of receipt of a copy of this order.
11. This Criminal Original Petition is ordered accordingly. Consequently, connected Miscellaneous Petitions are closed.
To
1.The Metropolitan Magistrate, Saidapet, Chennai.
2.The Principal District and Sessions Judge, Nagercoil.