Case Note & Summary
The petitioner, Vinod Laxman Das Kinger, proprietor of M/s. Kinger India, filed an application under Section 482 of the Code of Criminal Procedure, 1973 (Cr.P.C.) before the Bombay High Court seeking to quash Criminal Case No.882/SS/10 pending before the Metropolitan Magistrate, 12th Court at Bandra, Mumbai, for an offence under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). The respondent No.1, M/s. SBI Global Factors Ltd. (formerly Global Trade Finance Ltd.), a non-banking financial company registered under the Companies Act, 1956, with its head office at Mumbai, had sanctioned trade financial facilities up to Rs.4 crore to the petitioner vide sanction letter dated 26.9.2005. Agreements were executed on 26.9.2005 and 19.12.2007, and from October 2005, the complainant disbursed funds. In discharge of his liability, the petitioner issued 11 cheques dated 15.10.2009 — two drawn on Indian Bank, South Extension Branch, New Delhi, and nine on YES Bank Ltd., New Delhi Branch. The cheques were presented for encashment through Axis Bank Ltd., BKC Branch, Mumbai. Two cheques were returned unpaid with the endorsement 'funds insufficient' by Indian Bank, and nine were returned with 'account closed' by YES Bank. Despite statutory notice, the petitioner failed to pay. The complainant filed a complaint under Section 138 NI Act before the Metropolitan Magistrate at Bandra, Mumbai, who recorded the verification statement of Pragati B. Malle, a senior officer of the complainant, and issued process against the accused. After appearance, the accused filed an application under Section 201 Cr.P.C. contending that he resided outside the local limits of the Magistrate's jurisdiction and that an inquiry under Section 202 Cr.P.C. was mandatory but not held, and that the Magistrate lacked jurisdiction. The Magistrate rejected that application. The petitioner then approached the High Court under Section 482 Cr.P.C. to quash the proceedings. The High Court held that the Magistrate at Mumbai had territorial jurisdiction because the cheques were presented for encashment at Mumbai and the complainant's office was located there. The court also noted that since process had already been issued and the accused's plea recorded, the application under Section 201 Cr.P.C. was rightly rejected. The court found a prima facie case under Section 138 NI Act and dismissed the petition.
Headnote
A) Criminal Procedure Code - Territorial Jurisdiction - Section 202 Cr.P.C. - Inquiry before issue of process - Where the accused resides outside the local limits of the Magistrate's jurisdiction, an inquiry under Section 202 Cr.P.C. is mandatory before issuing process. However, in the present case, the Magistrate had already issued process and recorded the plea of the accused; therefore, the application under Section 201 Cr.P.C. was rightly rejected. (Paras 4-5) B) Negotiable Instruments Act - Dishonour of Cheque - Territorial Jurisdiction - Section 138 - The complainant presented the cheques for encashment at Mumbai through its bank, and the complainant's office is at Mumbai. Therefore, the Magistrate at Mumbai has jurisdiction to try the offence. The fact that the accused's bank accounts are in New Delhi does not oust jurisdiction. (Paras 3, 6) C) Criminal Procedure Code - Quashing of Proceedings - Section 482 - The High Court will not quash proceedings if there is a prima facie case. The complaint and verification statement disclose the ingredients of the offence under Section 138 of the Negotiable Instruments Act. Hence, the petition under Section 482 Cr.P.C. is dismissed. (Paras 2, 7)
Issue of Consideration
Whether the Metropolitan Magistrate at Mumbai had territorial jurisdiction to entertain the complaint under Section 138 of Negotiable Instruments Act, 1881, and whether the failure to hold an inquiry under Section 202 Cr.P.C. before issuing process vitiates the proceedings.
Final Decision
The High Court dismissed the criminal application and refused to quash the proceedings. The court held that the Metropolitan Magistrate at Mumbai had territorial jurisdiction and that the application under Section 201 Cr.P.C. was correctly rejected.
Law Points
- Territorial jurisdiction under Section 138 of Negotiable Instruments Act
- 1881
- Section 202 Cr.P.C. inquiry not mandatory if process already issued
- Section 482 Cr.P.C. quashing not warranted if prima facie case exists
