Case Note & Summary
The petitioner, HDFC Bank Ltd. (formerly Centurion Bank of Punjab Ltd.), filed three criminal complaints under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881, against M/s. New Tech Forge & Foundry Ltd. and its directors (respondents) for dishonour of cheques. The respondents had availed financial facilities from Centurion Bank, which was amalgamated with HDFC Bank on 23.05.2008. After amalgamation, HDFC Bank presented the cheques for collection at its Mumbai branch, but they were dishonoured by the respondents' bank at Rajkot. The petitioner issued statutory notices from Mumbai demanding payment at Mumbai, but no payment was made, leading to the filing of complaints at Mumbai. In an earlier round of litigation, the respondents challenged the issuance of process, and this Court, in Criminal Writ Petition No.1388 of 2009 and group matters, directed the Metropolitan Magistrate to conduct an enquiry under Section 202 Cr.P.C. (amended provisions). Pursuant to that direction, the learned Magistrate conducted an enquiry and, by order dated 5th October 2010, returned the complaints under Section 201(a) Cr.P.C. for presentation to the proper court, holding that the court at Mumbai had no territorial jurisdiction. The petitioner challenged this order in the present writ petitions. The High Court, after hearing the parties, set aside the Magistrate's order, holding that the presentation of the cheques for collection at Mumbai and the issuance of statutory notice from Mumbai demanding payment at Mumbai were sufficient to confer jurisdiction on the Mumbai court. The court observed that the learned Magistrate had erred in returning the complaints without considering these factors. The writ petitions were allowed, and the complaints were restored to the file of the learned Magistrate for further proceedings in accordance with law.
Headnote
A) Criminal Procedure Code - Territorial Jurisdiction - Section 201(a) Cr.P.C. - Return of Complaint - The learned Magistrate returned the complaint under Section 201(a) Cr.P.C. holding that the court at Mumbai had no territorial jurisdiction to try the offence under Section 138 of Negotiable Instruments Act, 1881. The High Court set aside the order, holding that the presentation of the cheque for collection at Mumbai and issuance of statutory notice from Mumbai gave jurisdiction to the Mumbai court. (Paras 2-5) B) Negotiable Instruments Act - Dishonour of Cheque - Section 138 r/w 141 - Territorial Jurisdiction - The complainant bank presented the cheques for collection at its Mumbai branch and issued statutory notice from Mumbai demanding payment at Mumbai. The dishonour occurred at Rajkot. The High Court held that the place where the cheque is presented for collection and the notice is issued is a relevant factor for jurisdiction under Section 138. (Paras 3-5) C) Criminal Procedure Code - Enquiry under Section 202 Cr.P.C. - Earlier Round of Litigation - In an earlier round, this Court directed the Magistrate to conduct an enquiry under Section 202 Cr.P.C. (amended provisions) before issuing process. The Magistrate, after enquiry, returned the complaint on jurisdictional grounds. The High Court set aside the return order. (Para 4)
Issue of Consideration
Whether the Metropolitan Magistrate at Mumbai had territorial jurisdiction to try the complaint under Section 138 r/w 141 of Negotiable Instruments Act, 1881, when the cheques were drawn on a bank at Rajkot but presented for collection at Mumbai and statutory notice was issued from Mumbai.
Final Decision
The High Court allowed the writ petitions, set aside the order dated 5th October 2010 passed by the learned Metropolitan Magistrate, and restored the complaints to the file of the learned Magistrate for further proceedings in accordance with law.
Law Points
- Territorial jurisdiction under Section 138 Negotiable Instruments Act
- 1881
- Section 201(a) Cr.P.C.
- Section 202 Cr.P.C.
- Amalgamation of banks
- Presentation of cheque for collection
- Issuance of statutory notice
