Case Note & Summary
The petitioner, M/s. Ruchi Soya Industries Ltd., filed a criminal writ petition challenging an order of the Special Metropolitan Magistrate, Mumbai, dated 8.2.2008, which held that the Mumbai court had no jurisdiction to try a complaint under Section 138 of the Negotiable Instruments Act, 1881. The complaint arose from a business transaction where the petitioner supplied mustard oil and packing material to the accused company at Alwar, Rajasthan. The accused issued a cheque for Rs.15,63,381/- drawn on State Bank of Bikaner & Jaipur, Delhi Branch, in favour of the petitioner. The petitioner deposited the cheque with its bank in Mumbai for collection. The cheque was returned unpaid due to insufficient funds. After issuing a notice and non-payment, the petitioner filed a complaint in Mumbai. The accused filed an application challenging jurisdiction, which was allowed by the Magistrate. The High Court, after hearing the petitioner and noting that the respondents did not appear, set aside the Magistrate's order. The court held that the presentation of the cheque at the complainant's bank in Mumbai constitutes a part of the cause of action, and therefore, the Mumbai court has jurisdiction. The court directed the Magistrate to proceed with the complaint in accordance with law.
Headnote
A) Criminal Law - Negotiable Instruments Act - Jurisdiction under Section 138 - Cause of Action - Presentation of Cheque - The court considered whether the Metropolitan Magistrate at Mumbai had jurisdiction to try a complaint under Section 138 of the Negotiable Instruments Act, 1881, when the cheque was drawn on a bank in Delhi but was presented for collection by the complainant at its bank in Mumbai. The court held that the presentation of the cheque at the complainant's bank in Mumbai constitutes a part of the cause of action, and therefore, the Mumbai court has jurisdiction. The court relied on the principle that the place where the cheque is presented for collection is a relevant factor for determining jurisdiction. (Paras 1-4)
Issue of Consideration
Whether the Metropolitan Magistrate at Mumbai had jurisdiction to try a complaint under Section 138 of the Negotiable Instruments Act, 1881, when the cheque was drawn on a bank in Delhi, but was presented for collection by the complainant at its bank in Mumbai.
Final Decision
The impugned order dated 8.2.2008 passed by the learned Special Metropolitan Magistrate, Mumbai, is set aside. The learned Magistrate is directed to proceed with the complaint in accordance with law.
Law Points
- Jurisdiction under Section 138 Negotiable Instruments Act
- 1881
- Cause of action for cheque dishonour
- Place of presentation of cheque
- Territorial jurisdiction of criminal courts
