Gujarat High Court
Krishnai Hospital Pvt. Ltd. ... vs State Of Gujarat on 23 August, 2023
Bench: Sandeep N. Bhatt
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION NO. 3942 of 2018
With
R/SPECIAL CRIMINAL APPLICATION NO. 3947 of 2018
With
R/SPECIAL CRIMINAL APPLICATION NO. 3953 of 2018
With
R/SPECIAL CRIMINAL APPLICATION NO. 3954 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE SANDEEP N. BHATT
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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KRISHNAI HOSPITAL PVT. LTD. THROUGH DIRECTOR KETAN ANANT
RAJ & 1 other(s)
Versus
STATE OF GUJARAT & 1 other(s)
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Appearance:
MR VIMAL PATEL FOR VMP LEGAL(7210) for the Applicant(s) No. 1,2
MR ANAND B GOGIA(5849) for the Respondent(s) No. 2
MS MUSKAN A GOGIA(6624) for the Respondent(s) No. 2
MR DHAWAN JAYSWAL, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 23/08/2023
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1. All these petitions are filed under Article 227
of the Constitution of India read with Section 482 of the
Code of Criminal Procedure, 1973 (`the Code' for short)
for quashing and setting aside the order dated 7.4.2018
passed below Exh.12 by the learned Judicial Magistrate,
First Class, Rajkot in Criminal Case Nos.5061 of 2017;
order dated 7.4.2018 passed below Exh.7 by the learned
Judicial Magistrate, First Class, Rajkot in Criminal Case
No.5062 of 2017; order dated 7.4.2018 passed below
Exh.7 by the learned Judicial Magistrate, First Class,
Rajkot in Criminal Case No.5063 of 2017 and order
dated 7.4.2018 passed below Exh.7 by the learned
Judicial Magistrate, First Class, Rajkot in Criminal Case
No.5064 of 2017.
2. As the common question of facts and law are
involved in all these petitions, at the request of learned
advocates for the parties, they are heard together and
disposed of by this common judgment.
3. Rule. Learned APP Mr.Jayswal waives service
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of notice of rule for respondent no.1-state. Learned
advocate Mr.Anand Gogia waives service of notice of rule
for respondent no.2.
4. For the sake of convenience, the facts of
Special Criminal Application No.3942 of 2018 are
considered, which are as under:
4.1 It is averred in the petition that the
respondent no.2 filed private complaints against the
applicant under Section 138 of the Negotiable
Instruments Act, 1881 (`NI Act' for short) before the
learned Judicial Magistrate, First Class, Rajkot. That as
none of the alleged documents were signed between the
parties at Rajkot and on the face of it, the subject
cheques bore the rubber stamp of Kalbadevi Mumbai
branch of respondent no.2 bank evidencing the
presentation of the subject cheque at Mumbai, the
learned JMFC, Rajkot had no jurisdiction to entertain
the said complaint and therefore the present applicant
filed an application under Section 142(2) of the NI Act
praying that the said complaints be returned to the
respondent no.2 for presentation before the appropriate
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Court, to which the respondent no.2 filed its objection.
The said applications came to be rejected by the learned
Magistrate, against which these petitions are filed.
5. Heard learned advocate Mr.Vimal Patel for the
petitioner, learned APP Mr.Jayswal for respondent no.1-
state and learned advocate Mr.Gogia for respondent no.2-
complainant.
5.1 Learned advocate Mr.Patel for the petitioner
submits that the petitioner is having a bank account
with RBL Bank Ltd., Dombiwali, Mumbai; that the
Rajkot Nagrik Sahkari Bank Ltd. Kalbadevi Branch,
Mumbai and the petitioner signed the sanctioned letter
for sanction of the loan; letter of standing instruction
was given to Rajkot Nagrik Sahkari Bank Ltd.,
Kalbadevi Branch, Mumbai; that deed of simple mortgage
between the petitioner and Rajkot Nagrik Sahkari Bank
Ltd. Kalbadevi Branch, Mumbai was entered into and
registered before the sub-registrar, Mumbai; undertaken
was given by the petitioner to maintain paid up share
capital, hypothecation agreement between the Rajkot
Nagrik Sahkari Bank Ltd. Kalbadevi branch, Mumbai
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and the petitioner, Kabulatnama was given by the
petitioner duly stamped of Rs.100/- affixed by State of
Maharashtra, off lien and set off form stamped of
Rs.100/- affixed by State of Maharashtra and given by
the petitioner; request for disbursement of balance
amount of loan was given by the petitioner to Rajkot
Nagrik Sahakari Bank ltd,. At Kalbadevi Branch,
Mumbai; the cheque drawn on the loan account of the
petitioner was deposited for encashment with Rajkot
Nagrik Sahakari Bank Ltd. At Kalbadevi branch; the
said cheque was returned from Rajkot Nagrik Sahakari
Bank Ltd. At Kalbadevi branch, Mumbai. Thereafter,
after issuance of letter, notice under Section 138 of the
NI Act, the impugned complaints are filed.
5.2 He submitted that the loan sanction letter,
letter of guarantee, hypothecation agreement, deed of
simple mortgage, letter of undertaking, letter of standing
instructions are executed at Mumbai at Dombivali and
none of the documents are executed at Rajkot. He
further submitted that the paragraph 20 of the complaint
discloses cause of action is only on the fact that the
respondent bank-its registered office or head office is at
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Rajkot and therefore it means that all the other cause
has occurred at Dombivali at Mumbai. He referred to
Section 142(2) of the NI Act and submitted that it
leaves no room for any doubt, specially in view of the
explanation thereunder, that with reference to an offence
under Section 138 of the NI Act, the place where a
cheque is delivered for collection i.e. the branch of the
bank of the payee or holder in due course, where the
drawee maintains the account would be determinative of
the place of jurisdiction. He, therefore, submitted that
the loan account of the petitioner is with Kalbadevi
branch, Mumbai and the account payee cheque is of RBL
Bank Ltd. At Mumbai given by the petitioner which was
presented and dishonoured at Kalbadevi Branch, Mumbai
and therefore as no cause of action has arisen at Rajkot,
the impugned orders be set aside and the complaints
may be directed to be presented before the appropriate
court of law.
5.3 In support of his submissions, learned advocate
for the applicant has relied on the following decisions:
(1) Bridgestone India Private Limited V/s Inderpal Singh
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reported in (2016)2 SCC 75, more particularly,
paragraphs 12, 13 and 16.
(2) Mahendra Kumar Kedarnath Modi V/s State of
Gujarat reported in 2018(1) GLH 288, more particularly,
paragraphs 33 to 41 and 49.
(3) Siddharth Exports V/s Kotak Mahindra Bank Ltd.,
reported in 2019(0) AIJEL-HC 241156.
6. Per contra, learned APP Mr.Jayswal for respondent
no.2-state has objected these applications and submitted
that this Court should not exercise its powers by
interfering with the proceedings of recovery of amount
and the proceedings initiated under Section 138 of the
Act are perfectly justified and therefore, this Court
should not exercise inherent powers under Section 482 of
the Code, which otherwise, should be exercised sparingly.
He, therefore, prayed to dismiss all these applications.
7. Learned advocate Mr.Gogia for respondent no.2-
complainant has submitted that at the relevant point of
time, only the head office at Rajkot of the respondent
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bank was possessing the authority to sanction the loan
to the tune of Rs.25,00,000/- and therefore the loan
proposal of the applicant which was received at
Kalbadevi branch was forwarded to the head office of the
bank at Rajkot and it was their loan policy that in case
of the loan of above Rs.25,00,000/-, the loan department
in the head office at Rajkot was possessing the authority
of sanction and the concerned branch could not sanction
such loans. He submits that the respondent bank is
having various branches, situated at different places and
the head office/registered office is at Rajkot, the main
account of delivery for collection of cheque is at Rajkot
and every cheque presented for collection in any branch
of the bank, is honoured or dishonoured through Central
Truncation System) at Rajkot in the account maintained
by the bank and in the present case also, the subject
cheques were dishonoured at Rajkot.
7.1 He further submitted that in view of the
amendment to Section 142 of the NI Act, the complaint
for dishonour of cheque under NI Act can be filed only
in the Court situated at the place where the bank, in
which the payee has account, is located and in the
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present case, the cheque was presented at Kalbadevi
Branch of the bank at Mumbai for collection, however,
as per the CTS, the credit/debit was to be given in the
centralized pooling account maintained at Rajkot and
therefore it can be said that bank/payee of the cheque is
having account at Rajkot and the Court at Rajkot have
only jurisdiction to entertain the complaint.
7.2 In support of his submission, learned advocate
for the respondent no.2-complainant has relied on the
decision in the case of Brijendra Enterprise C/o Shail
Enterprise V/s State of Gujarat, reported in 2016(3) GLH
143.
8. I have considered the rival submissions and
perused the material on record.
9. At the outset, the provisions of Sections 138,
141 and 142 of the NI Act are required to be seen,
which read as under:
"138. Dishonour of cheque for insufficiency, etc., of funds in
the account.
Where any cheque drawn by a person on an account
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maintained by him with a banker for payment of any
amount of money to another person from out of that account
for the discharge, in whole or in part, of any debt or other
liability, is returned by the bank unpaid, either because of
the amount of money standing to the credit of that account
is insufficient to honour the cheque or that it exceeds the
amount arranged to be paid from that account by an
agreement made with that bank, such person shall be
deemed to have committed an offence and shall without
prejudice to any other provisions of this Act, be punished
with imprisonment for "a term which may extend to two
year", or with fine which may extend to twice the amount
of the cheque, or with both:
Provided that nothing contained in this section shall apply
unless
(a) The cheque has been presented to the bank within a
period of six months from the date on which it is drawn or
within the period of its validity, whichever is earlier.
(b) The payee or the holder induce course of the cheque, as
the case may be, makes a demand for the payment of the
said amount of money by giving a notice, in writing, to the
drawer, of the cheque, "within thirty days" of the receipt of
information by him from the bank regarding the return of
the cheques as unpaid, and
(c) The drawer of such cheque fails to make the payment of
the said amount of money to the payee or, as the case may
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be, to the holder in due course of the cheque, within fifteen
days of the receipt of the said notice.
Explanation: For the purpose of this section, "debt or other
liability"
means a legally enforceable debt or other liability."
"141 Offences by companies. (1) If the person committing
an offence
under section 138 is a company, every person who, at the
time the offence was committed, was in charge of, and was
responsible to the
company for the conduct of the business of the company, as
well as the company, shall be deemed to be guilty of the
offence and shall be liable to be proceeded against and
proceeded against and punished accordingly:
Provided that nothing contained in this subsection shall
render any
person liable to punishment if he proves that the offence
was committed without his knowledge, or that he had
exercised all due diligence to prevent the commission of such
offence:
Provided further that where a person is nominated as a
Director of a company by virtue of his holding any office or
employment in the Central Government or State Government
or a financial corporation owned or controlled by the Central
Government or the State Government, as the case may be,
he shall not be liable for prosecution under this Chapter.
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(2) Notwithstanding anything contained in subsection (1),
where any offence under this Act has been committed by a
company and it is proved that the offence has been
committed with the consent or connivance of, or is attribute
to, any neglect on the part of, any director, Manager,
secretary, or other office of the company, such director,
manager, secretary or other officer shall also be deemed to
be guilty of that offence and shall be liable to be proceeded
against and punished accordingly.
Explanation. For the purposes of this section,
(a) "company" means any body corporate and includes a firm
or other association of individuals; and
(b) "Director", in relating to a firm, means a partner in the
firm."
142. Cognizance of offences.--
[(1)] Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 (2 of 1974),--
(a) no court shall take cognizance of any offence punishable
under section 138 except upon a complaint, in writing, made
by the payee or, as the case may be, the holder in due
course of the cheque;
(b) such complaint is made within one month of the date on
which the cause of action arises under clause (c) of the
proviso to section 138: 2 [Provided that the cognizance of a
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complaint may be taken by the Court after the prescribed
period, if the complainant satisfies the Court that he had
sufficient cause for not making a complaint within such
period;]
(c) no court inferior to that of a Metropolitan Magistrate or
a Judicial Magistrate of the first class shall try any offence
punishable under section 138.].
[(2) The offence under section 138 shall be inquired into and
tried only by a court within whose local jurisdiction,--
(a) if the cheque is delivered for collection through an
account, the branch of the bank where the payee or holder
in due course, as the case may be, maintains the account,
is situated; or
(b) if the cheque is presented for payment by the payee or
holder in due course, otherwise through an account, the
branch of the drawee bank where the drawer maintains the
account, is situated.
Explanation.--For the purposes of clause (a), where a cheque
is delivered for collection at any branch of the bank of the
payee or holder in due course, then, the cheque shall be
deemed to have been delivered to the branch of the bank in
which the payee or holder in due course, as the case may
be, maintains the account.]
[142A. Validation for transfer of pending cases.--
(1) Notwithstanding anything contained in the Code of
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Criminal Procedure, 1973 (2 of 1974) or any judgment,
decree, order or direction of any court, all cases transferred
to the court having jurisdiction under sub-section (2) of
section 142, as amended by the Negotiable Instruments
(Amendment) Ordinance, 2015 (Ord. 6 of 2015), shall be
deemed to have been transferred under this Act, as if that
sub-section had been in force at all material times.
(2) Notwithstanding anything contained in sub-section (2) of
section 142 or sub-section (1), where the payee or the holder
in due course, as the case may be, has filed a complaint
against the drawer of a cheque in the court having
jurisdiction under sub-section (2) of section 142 or the case
has been transferred to that court under sub-section (1) and
such complaint is pending in that court, all subsequent
complaints arising out of section 138 against the same
drawer shall be filed before the same court irrespective of
whether those cheques were delivered for collection or
presented for payment within the territorial jurisdiction of
that court.
(3) If, on the date of the commencement of the Negotiable
Instruments (Amendment) Act, 2015 (26 of 2015), more than
one prosecution filed by the same payee or holder in due
course, as the case may be, against the same drawer of
cheques is pending before different courts, upon the said fact
having been brought to the notice of the court, such court
shall transfer the case to the court having jurisdiction under
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sub-section (2) of section 142, as amended by the Negotiable
Instruments (Amendment) Ordinance, 2015 (Ord. 6 of 2015),
before which the first case was filed and is pending, as if
that sub-section had been in force at all material times.]
10. The main grievance in these petitions is about
the jurisdiction. The present complainant is a cooperative
bank and is having its main office at Rajkot. As per the
say of the complainant, the main office is approving the
loans of more than Rs.25,00,000/- which is disbursed in
any part of India and the branch offices are approving
such loans below Rs.25,00,000/-. It is the say of the
complainant that since the loan is approved by the main
office at Rajkot, the cheque is deposited at Mumbai
branch but is cleared by CTS at Rajkot and therefore
the cause of action has arisen at Rajkot.
11. In the case of Bridgestone India Private
Limited (supra), it is held in paragraphs 12, 13 and 16
as under:
"12. Sections 3 and 4 of the Negotiable Instruments
(Amendment) Second Ordinance, 2015 are being extracted
hereunder:
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"3. Amendment to Section 142: - In the principal Act,
section 142 shall be numbered as sub-section (1) thereof and
after sub-section (1) as so numbered, the following sub-
section shall be inserted, namely:-
142(2) The offence under section 138 shall be inquired into
and tried only by a court within whose local jurisdiction,--
(a) if the cheque is delivered for collection through an
account, the branch of the bank where the payee or holder
in due course, as the case may be, maintains the account,
is situated; or
(b) if the cheque is presented for payment by the payee or
holder in due course otherwise through an account, the
branch of the drawee bank where the drawer maintains the
account, is situated.
Explanation - For the purposes of clause (a), where a
cheque is delivered for collection at any branch of the bank
of the payee or holder in due course, then, the cheque shall
be deemed to have been delivered to the branch of the bank
in which the payee or holder in due course, as the case
may be, maintains the account."
4. In the principal Act, after section 142, the following
section shall be inserted, namely:-
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142A. (1) Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 or any judgment, decree, order or
directions of any court, all cases transferred to the court
having jurisdiction under sub-section (2) of section 142, as
amended by the Negotiable Instruments (Amendment)
Ordinance, 2015, shall be deemed to have been transferred
under this Ordinance, as if that sub-section had been in
force at all material times.
(2) Notwithstanding anything contained in subsection (2) of
section 142 or sub-section (1), where the payee or the holder
in due course, as the case may be, has filed a complaint
against the drawer of a cheque in the court having
jurisdiction under sub-section (2) of section 142 or the case
has been transferred to that court under subsection (1), and
such complaint is pending in that court, all subsequent
complaints arising out of section 138 against the same
drawer shall be filed before the same court irrespective of
whether those cheques were delivered for collection or
presented for payment within the territorial jurisdiction of
that court.
(3) If, on the date of the commencement of this Ordinance,
more than one prosecution filed by the same payee or
holder in due course, as the case may be, against the same
drawer of cheques is pending before different courts, upon
the said fact having been brought to the notice of the court,
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such court shall transfer the case to the court having
jurisdiction under sub-section (2) of section 142, as amended
by the Negotiable Instruments (Amendment) Ordinance, 2015,
before which the first case was filed and is pending, as if
that subsection had been in force at all material times."
(Emphasis is ours)
13. A perusal of the amended Section 142(2),
extracted above, leaves no room for any doubt, specially in
view of the explanation thereunder, that with reference to
an offence under Section 138 of the Negotiable Instruments
Act, 1881, the place where a cheque is delivered for
collection i.e. the branch of the bank of the payee or holder
in due course, where the drawee maintains an account,
would be determinative of the place of territorial jurisdiction.
16. Since cheque No.1950, in the sum of Rs.26,958/-, drawn
on the Union Bank of India, Chandigarh, dated 02.05.2006,
was presented for encashment at the IDBI Bank, Indore,
which intimated its dishonor to the appellant on 04.08.2006,
we are of the view that the Judicial Magistrate, First Class,
Indore, would have the territorial jurisdiction to take
cognizance of the proceedings initiated by the appellant
under Section 138 of the Negotiable Instruments Act, 1881,
after the promulgation of the Negotiable Instruments
(Amendment) Second Ordinance, 2015. The words "...as if
that sub-section had been in force at all material times..."
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used with reference to Section 142(2), in Section 142A(1)
gives retrospectivity to the provision."
12. In the case of Mahendra Kumar Kedarnath
Modi (supra), it is held in paragraphs 33 to 41 and 49
as under:
"33. To meet with such a situation, the legislature thought
fit to bring in an ordinance. Section 142(2) of the N.I. Act
now makes it clear that the offence under section 138 shall
be inquired into and tried only by a court, within whose
local jurisdiction, the cheque is delivered for collection
through an account, the branch of the Bank where the
payee or holder, in due course, as the case may be,
maintains the account is situated or if the cheque is
presented for payment by the payee or holder, in due
course, otherwise through an account, the branch of the
drawee bank where the drawer maintains the account is
situated.
34. In my view, the legislature has given importance to the
mode of delivery,i.e., the fact of a cheque being delivered for
collection through an account rather than the place where
the cheque is delivered. The explanation for the purposes of
clause (a) makes the picture more clear. The intention of
the legislature in enacting section 142(2) was to ensure that
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undue hardship is not caused to the complainant. The
complainant should not suffer at both the ends. First, he
has not been able to realise the money due and payable to
him and, secondly, if he has to chase the drawer, the same
will be more cumbersome for the complainant. The new law
on the issue of territorial jurisdiction now introduces the
clarity and uniformity. It takes care of the interests of the
payee of the cheque while, at the same time, also taking
care that the drawer of the multiple cheques is not
harassed by filing the multiple litigations at different
locations to harass him ( if more than one cheque has
bounced). It would not be out of place to state at this stage
that in the N.I. Amendment Bill, 2015, as introduced in the
Lok Sabha section 142 (2) intended to be amended as
follows;
Section 142, Cognizance of offences:-
"(2) The offence under section 138 shall be inquired into
and tried only by a court within whose local jurisdiction the
bank branch of the payee, where the payee presents the
cheque for payment, is situated."
35. Accordingly, the N.I. Amendment Bill, 2015, which, in
fact was approved by the Lok Sabha, but couldn't make it
through the Rajya Sabha, provided that the Court will try
the case within whose local jurisdiction the bank branch of
the payee, where the payee presents the cheque for
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payment, is situated. However, the N.I. Ordinance, 2015, did
not stick to what the N.I. Amendment Bill, 2015 suggested
and provided additional set of rules for the cases not
presented through the payee's bank account. What I am
trying to drive at is that it was not possible for the
legislature to keep in mind all the possible permutations
and combinations of the problems arising in filing the cases
under section 138 of the N.I. Act. The N.I. Ordinance, 2015,
finally put an end to the confusion of territorial jurisdiction
in cases under section 138 of the N.I. Act by clearly laying
down that (I) if the payee presents the cheque through the
account, the court will try the case within whose local
jurisdiction the bank branch of the payee (collecting bank) is
situated & (ii) if the payee presents the cheque through the
counter of the drawee bank for payment, the court will try
the case within whose local jurisdiction the bank branch of
the drawer (drawee bank) is situated. 36. It is appropriate
for me, at this stage, to look into a document on record in
the form of a certificate dated 07.09.2015 issued by the
Corporation Bank, which reads as under;
"CERTIFICATE
TO WHOM SO EVER IT MAY CONCERN
CORPORATION BANK HAS PROVIDED FACILITY OF FCS
(FUND COLLECTION SYSTEM) AT NEW DELHI (PARENT
CAPS-AHMEDABAD) FOR CLIENT GUJARAT STAGE
FERTILIZERS & CHEMICALS LTD., BY WHICH FACILITY
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DAILY FUND / AMOUNT IS COLLECTED FROM ALL
CENTRES AND CREDITED IN ACCOUNT
NO.02090500000002 AT BANK OF BORODA, FERTILIZER
NAGAR MAIN BRANCH, VADODARA GUJARAT.
OUR CLIENT NAME: GUJARAT STATE FERTLIZERS &
CHEMICAL LTD., CLIENT CODE: GFC 563 IS HAVING A/
C/ NO. 02090500000002 AT BANK OF BARODA,
FERTILIZERS NAGAR BRANCH AT VODODARA - 391750,
GUJARAT IS OPERATIVE SINCE 1993. THE FOLLOWING
CHEQUES ANNEXED AS A HAVE BEEN DEPOSITED
AND DISHONOURED TO ACCOUNT NO. 02090500000002
AT BANK OF BARODA, FERTILIZER NAGAR BRANCH,
VADODARA, GUJARAT."
37. The terms and conditions of the facility, namely, the
Fast Collection Service, is as under;
"1) Name of Facility: Fast Collection Service.
2) Exposure Level: Rs. 4.75 crore (Rupees Four Crore
Seventy Five Laskh Only)
3) Name & Address: M/s. Gujarat State Fertilizers &
Chemicals Ltd., P.O. Fertilizernagar, Vadodara391750.
4) Location, process flow & charges. Location Process Flow
Charges 1000 Metro Locations Day 0-Day 1 Rs.0.03 Mini
Metro Location Day 0-Day 1 Rs.0.03 RBI Locations Day 0-
Day 1 Rs.0.03 SBI Locations Day 0-Day 1 Rs.0.06 Other
SBI Locations Day 0-Day21 Rs.0.10
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5) Pooling Branch Bank of Baroda, Fertilizernagar, Main
Branch, Vadodara.
6) Mode of Pooling By way of credit to client's BOB banks
CC a/c. No. 02090500000002 maintained with Bank of
Baroda, Ferlitizernagar, Vadodara.
7) Return Instrument Charges Rs. 100/- per instrument +
interest @ 14.50% p.a. i.e. Base Rate (10.25% p.a.) + 4.25%
for the period bank is rendered out of funds.
8) Interest on RIA 14.50% p.a. i.e. Base Rate (10.25% p.a.)
+ 4.25%, till the date of recovery.
9) Courier charges per Instrument Location. No.
10) Courier Arrangement No.
11) Interest on delayed realization No."
38. Thus, although the cheques issued by the accused were
collected by the complainant at New Delhi and were
presented for clearance with the Corporation Bank at New
Delhi, yet in my view, it could be said that the cheques
were presented through an account, i.e., the account
maintained by the complainant with the Bank of Baroda,
Fertilizer Nagar Branch, Vadodara. Without the account of
the complainant maintained with the Bank of Baroda,
Fertilizer Nagar Branch, Vadodara, the Corporation Bank
could not have given credit if, ultimately, the cheques would
have been cleared. What is important is the account
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maintained by the complainant with the Bank of Baroda,
Fertilizer Nagar Branch at Vadodara. The Corporation Bank
has made itself very clear in the certificate dated 07.09.2015
that the cheques were deposited and dishonoured to the
account No. 02090500000002 at the Bank of Baroda,
Fertilizer Nagar Branch, Vadodara, Gujarat. Giving strict
interpretation to the words "through an account", as
suggested by the learned counsel appearing for the
applicants will frustrate the very object, with which, section
142 of the N.I. Act came to be amended. I find it extremely
difficult to accept the argument of Mr. Parikh that in the
case on hand, the payee could not be said to have used his
account nor his Bank to deal with the cheques. If the
cheques are account payee, such cheques, for the purpose of
clearance, are bound to be "through an account". Of course,
it is the argument of Mr. Parikh that a situation like the
one on hand would fall within the clause (b) to section
142(2) and presenting the cheques across the counter is not
the only mode, which would bring the case within the ambit
of clause(b). However, I do not find merit in such
submission. It is also difficult for me to accept the argument
that the original account of the complainant with the Bank
of Baroda has nothing to do with the independent
agreement and understanding between the GSFC and the
Corporation Bank. As noted above, it is the original account
of the complainant maintained with the Bank of Baroda,
which is important and without the said account, the
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arrangement with the Corporation Bank can never come into
play.
39. My above noted interpretation of the words "through an
account" would subserve the object of the amendment of
section 142 of the N.I. Act and insertion of new section
142(A) by amendment. Any other interpretation would
frustrate the object. The complainant company is a
government undertaking and its business is spread across
the various parts of the country. The Fast Collection Service
provided by the Corporation Bank helps the complainant to
a considerable extent. The cheques received at the different
places in the country can be deposited at a convenient FCS
Branch of the Corporation Bank and the funds so collected
are credited to the bank account of the complainant.
40. The effect of the rule of strict construction might almost
be summed up in the remark that where an equivocal word
or ambiguous sentence leaves a reasonable doubt of its
meaning which the canons of interpretation fail to solve, the
benefit of the doubt should be given to the subject and
against the legislature which has failed to explain itself. But
it yields to the paramount rule that every statute is to be
expounded according to its expressed or manifest intention
and that all cases within the mischiefs aimed at are, if the
language permit, to be held to fall within its remedial
influence.
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41. I do agree, to a certain extent, with Mr. Parikh, the
learned senior counsel appearing for the applicants that in
the complaint lodged by the complainant, there is not even
a passing reference to the account maintained by the
complainant with the Bank of Baroda, Fertilizer Nagar
Branch, Vadodara. The territorial jurisdiction of a particular
court to try the case can be determined on the basis of the
averments made in the complaint in that regard. However,
there is overwhelming materials on record as regards the
Bank of Baroda account, which is otherwise not in dispute.
At this stage, let me deal with the contention raised by Mr.
Nanavati, the learned senior counsel appearing for the
complainant as regards section 201 of the Cr.P.C. According
to Mr. Nanavati, the accused persons should have raised the
issue of territorial jurisdiction of the court at Vadodara at
the earliest so that the court concerned could have looked
into the same keeping in mind the provisions of section 201
of the Cr.P.C. In my view, at this stage, section 201 of the
Cr.P.C will have no application.
49. For the foregoing reasons, I hold that the Court at
Vadodara has the territorial jurisdiction and the complaints
filed by the complainant for the offence under section 138 of
the N.I. Act are maintainable."
13. In the case of Siddharth Exports (supra), it is
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held in paragraphs 13 to 17 and 23 as under:
"13. So far as the issue of jurisdiction is concerned, it is to
be regarded that in wake of decision of Dashrath Rupsinh
Rathod V/s. State of Maharashtra reported in (2014)9
SCC 129, the parliament amended the N.I. Act and
Sections 142(2) and 142A of the N.I. Act are introduced
limiting jurisdiction to two places. Both the
provisions and their implications are referred to in the
decision of Bridge Stone India (pvt) Ltd. (supra)
13.1 Apt would be to refer to the said decision of Bridge
Stone India Pvt. Ltd. which clearly provides guidelines with
regard to the jurisdiction of the Court:
"9. During the course of hearing, the learned counsel
for the appellant cited the decision rendered by a three-
Judge Bench of this Court in Dashrath Rupsingh
Rathod vs. State of Maharashtra, and pointedly
invited our attention to the conclusions drawn
by this Court in paragraph 58, which is
extracted hereunder:
"58. To sum up:
58.1 An offence under Section 138 of the Negotiable
Instruments Act, 1881 is committed no sooner a cheque
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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
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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 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."
10. In view of the decision rendered by this Court in
Dashrath Rupsingh Rathod case, it is apparent that the
impugned order dated 05.05.2011, passed by the High Court
of Madhya Pradesh, Bench at Indore, was wholly justified.
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11. In order to overcome the legal position declared by this
Court in Dashrath Rupsingh Rathod case, the learned
counsel for the appellant has drawn our attention
to the Negotiable Instruments (Amendment) Second
Ordinance, 2015 (hereinafter referred to as 'the Ordinance').
A perusal of Section 1(2) thereof reveals that the Ordinance
would be deemed to have come into force with effect from
15.06.2015. It is therefore pointed out to us that the
Negotiable Instruments (Amendment) Second
Ordinance, 2015 is in force. Our attention was then invited
to Section 3 thereof, whereby, the original
Section 142 of the Negotiable Instruments Act, 1881,
came to be amended, and also, Section 4 thereof, whereby,
Section 142A was inserted into the Negotiable Instruments
Act.
12. Sections 3 and 4 of the Negotiable
Instruments (Amendment) Second Ordinance, 2015
are being extracted hereunder:
"3. Amendment of Section 142. In the principal Act, section
142 shall be numbered as sub section (1)
thereof and after subsection (1) as so numbered, the
following subsection shall be inserted, namely:
142.(2) The offence under section 138 shall be inquired into
and tried only by a court within whose local jurisdiction,
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(a) if the cheque is delivered for collection through an
account, the branch of the bank where the payee or holder
in due course, as the case may be, maintains the account,
is situated; or
(b) if the cheque is presented for payment by the payee or
holder in due course otherwise through an account, the
branch of the drawee bank where the drawer
maintains the account, is situated.
Explanation For the purposes of clause (a), where a cheque
is delivered for collection at any branch of the bank of the
payee or holder in due course, then, the cheque shall be
deemed to have been delivered to the branch of the bank in
which the payee or holder in due course, as the case may
be, maintains the account."
4. Insertion of new section. - In the principal Act, after
section 142, the following section shall be inserted, namely:
142A. Validation for transfer of pending cases.
-
(1) Notwithstanding anything contained in the Code
of Criminal Procedure, 1973 (2 of 1974) or any judgment,
decree, order or directions of any court, all cases transferred
to the court having jurisdiction under subsection (2) of
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section 142, as amended by the Negotiable Instruments
(Amendment) Ordinance, 2015, (6 of 2015) shall be
deemed to have been transferred under this
Ordinance, as if that subsection had been in force at all
material times.
(2) Notwithstanding anything contained in sub-
section (2) of section 142 or subsection (1), where the payee
or the holder in due course, as the case may be, has filed a
complaint against the drawer of a cheque in the court
having jurisdiction under subsection (2) of section 142 or the
case has been transferred to that court under subsection (1),
and such complaint is pending in that court, all subsequent
complaints arising out of section 138 against the same
drawer shall be filed before the same court
irrespective of whether those cheques were
delivered for collection or presented for payment
within the territorial jurisdiction of that court.
(3) If, on the date of the commencement of this Ordinance,
more than one prosecution filed by the same payee or
holder in due course, as the case may be, against the same
drawer of cheques is pending before different courts, upon
the said fact having been brought to the notice of the court,
such court shall transfer the case to the court having
jurisdiction under subsection (2) of section 142,
as amended by the Negotiable Instruments
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(Amendment) Ordinance, 2015, before which the first case
was filed and is pending, as if that subsection had been in
force at all material times." (Emphasis supplied)
13. A perusal of the amended Section 142(2), extracted
above, leaves no room for any doubt, specially
in view of the explanation thereunder, that with
reference to an offence under Section 138 of the Negotiable
Instruments Act, 1881, the place where a cheque is
delivered for collection i.e. the branch of the bank of the
payee or holder in due course, where the drawee maintains
an account, would be determinative of the place of territorial
jurisdiction."
14 It is quite apparent from the said provision that
ordinarily, at two places, jurisdiction would lie (1) when
cheque is presented for collection through an account,
the branch where the payee or holder in due
course, maintains the account, is situated (2) when presented
otherwise through an account, the branch of
bank where the drawer maintains the account.
In case of the corporates, banks jurisdiction would lie
with the Court having jurisdiction over the branch bank of
drawer for the cheque having been presented otherwise
through an account.
15 In the case on hand, drawer's bank is at Noida and
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the head quarter of Kotak Mahindra Bank is at Mumbai, it
also has its branch in Noida and yet, it has chosen to
tender the cheque at the branch bank at Ahmedabad.
16 Complainant being the Bank, it naturally would have
branches almost in all parts of the country, but, what would
be relevant for the purpose of deciding the aspect of
jurisdiction is whether the Bank ought to have deposited
the cheque at Ahmedabad and whether it had valid reason
for such deposits.
17 This Court notices that the entire transaction is at
Noida, New Delhi. The notice of dishonour of cheque also
has been from Noida, New Delhi. The Head Office of the
Bank is at Mumbai. Ahmedabad branch does not come into
the picture at all so far as the customer is concerned. An
attempt is made by the learned counsel on raising of query
by the Court that the loan department is being handled at
Ahmedabad. It is surprising as to how Ahmedabad would
have a jurisdiction because each branch would have a loan
department."
14. This contention is required to be dealt with in
light of the judgments relied on by the learned advocate
for the applicant, as referred to hereinabove. It is clearly
transpires that this Court as well the the Hon'ble Apex
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Court has found that the issue of territorial jurisdiction
is always a very complex one for both, the legislature as
well as the Courts. By way of the amendment in Section
142(2) of the NI Act, the legislature has given
importance to the mode of delivery i.e. the fact of a
cheque being delivered for collection through an account
holder rather than the place where the cheque is
delivered. The intention of the legislature in enacting
Section 142(2) of the NI Act was to ensure that undue
hardship is not caused to the complainant and the
complainant has not been able to realise the money due
and payable to him and if he has to chase the drawer,
the same will be more cumbersome for the complainant
and therefore, the amendment which is brought in
Section 138 read with Section 141 of the NI Act finally
put an end to confusion of territorial jurisdiction in cases
under Section 138 of the NI Act by clearly laying down
that (i) if payee presents the cheque through account,
court will try the case within whose local jurisdiction the
bank branch of the payee (collecting bank) is situated;
(ii) if payee presents cheque through counter of drawee
bank for payment, Court will try case within whose local
jurisdiction the bank branch of the drawer (drawee bank)
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is situated. Therefore, in the present case, where the
loan is applied at Mumbai, the cheque is also deposited
at Mumbai, the bank which has given finance is also
situated at Mumbai and the cheque is also bounced from
Mumbai. The fact that the bank is having centralized
clearing centre at Rajkot itself would not be helpful to
the case of the complainant to file complaint at Rajkot,
as in view of the above discussion, the court at Mumbai
has only the jurisdiction and the court at Rajkot cannot
entertain the complaints as the court at Rajkot cannot
be said to have any territorial jurisdiction.
15. There cannot be any dispute regarding the
ratio laid down in the judgment relied on by learned
advocate Mr.Gogia for respondent no.2-complainant in the
case of Brijendra Enterprise C/o Shail Enterprise,
however, the facts of the said case are different to the
facts of the case on hand.
16. In view of the above discussion, these petitions
are allowed. The impugned orders dated 7.4.2018 passed
below Exh.12 by the learned Judicial Magistrate, First
Class, Rajkot in Criminal Case Nos.5061 of 2017; dated
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7.4.2018 passed below Exh.7 by the learned Judicial
Magistrate, First Class, Rajkot in Criminal Case No.5062
of 2017; dated 7.4.2018 passed below Exh.7 by the
learned Judicial Magistrate, First Class, Rajkot in
Criminal Case No.5063 of 2017 and dated 7.4.2018
passed below Exh.7 by the learned Judicial Magistrate,
First Class, Rajkot in Criminal Case No.5064 of 2017 are
hereby quashed and set aside and the said applications
are allowed. The trial Court is directed to return the
criminal complaints to the complainant, to be presented
at the competent Court at Mumbai. Rule is made
absolute to the aforesaid extent. Direct service is
permitted.
(SANDEEP N. BHATT,J)
SRILATHA
