Case Note & Summary
The Bombay High Court considered a group of applications under Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of process issued by the Metropolitan Magistrate, 33rd Court, Ballard Pier, Mumbai, in complaints under Section 138 of the Negotiable Instruments Act, 1881. The applicants, Jambu Kumar Jain and Prafull Kumar Jain, were accused Nos. 4 and 5 in the complaints, being directors of Nanesh Foods Limited (formerly Samta Foods Limited). The respondent No.1, Tata Capital Limited, a registered company with its head office at Fort, Mumbai, had advanced cash credit, term loan, and working capital loan facilities to the accused company. In discharge of part liability, the accused company issued cheques which were dishonoured upon presentation. Despite statutory notice, payment was not made, leading to complaints filed at Mumbai. The applicants contended that the Magistrate at Mumbai had no territorial jurisdiction as the cheques were drawn on a bank at Indore, the accused company was based in Indore, and no part of the cause of action arose within Mumbai's jurisdiction. The court examined the complaint allegations and found that the cheques were issued from Indore, drawn on a bank at Indore, and the notice was served at Indore. The only connection to Mumbai was the complainant's head office. The court held that the mere location of the payee's head office does not confer jurisdiction on Mumbai courts. Relying on the principle that jurisdiction under Section 138 is determined by the place where the cheque is drawn, presented, or dishonoured, the court found that no part of the cause of action arose in Mumbai. Consequently, the court quashed the summons and proceedings against the applicants, allowing the applications.
Headnote
A) Criminal Procedure - Quashing of Summons - Section 482 CrPC - Territorial Jurisdiction - Petitioners sought quashing of process issued by Metropolitan Magistrate, Mumbai, under Section 138 of Negotiable Instruments Act, 1881, on ground of lack of jurisdiction - Held that where the cheque is drawn on a bank at Indore, the payee's head office at Mumbai alone does not confer jurisdiction on Mumbai courts - Summons quashed (Paras 1-6).
Issue of Consideration
Whether the Metropolitan Magistrate at Mumbai had territorial jurisdiction to entertain complaints under Section 138 of the Negotiable Instruments Act, 1881, where the cheques were drawn on a bank at Indore and the payee had its head office at Mumbai but no part of the transaction occurred at Mumbai.
Final Decision
The court allowed the applications and quashed the summons and proceedings against the applicants in all the complaint cases.
Law Points
- Territorial jurisdiction under Section 138 of Negotiable Instruments Act
- 1881
- Section 482 of Code of Criminal Procedure
- 1973
- Quashing of criminal proceedings for lack of jurisdiction
