Case Note & Summary
The applicants, Naveen Luthra and Arun Luthra, were accused in two complaints filed by respondent no.1, AVR Logistic Pvt. Ltd., under Section 138 of the Negotiable Instruments Act, 1881, pending before the Judicial Magistrate First Class, Aurangabad. The applicants challenged the territorial jurisdiction of the Aurangabad court, arguing that the cheques in question were drawn on a bank at Mumbai and deposited by the complainant at Aurangabad. The legal issue was whether the place of deposit by the payee confers jurisdiction under Section 138 NI Act. The applicants contended that jurisdiction lies only where the drawee bank branch is located, i.e., Mumbai. The respondent argued that the place of presentation of the cheque for collection also gives jurisdiction. The court analyzed Section 138 and relevant precedents, holding that the offence under Section 138 is committed at the place of the drawee bank on which the cheque is drawn. The court reasoned that the 'bank' in Section 138 refers to the drawee bank, and the place of deposit by the payee is irrelevant. Consequently, the court allowed the applications, quashing the complaints for lack of territorial jurisdiction.
Headnote
A) Criminal Procedure Code - Territorial Jurisdiction - Section 177 CrPC - Offence under Section 138 NI Act - The place where the cheque is presented for collection does not confer jurisdiction; jurisdiction lies where the drawee bank branch is located. Held that the offence under Section 138 is committed at the place of the drawee bank on which the cheque is drawn, and not at the place of deposit by the payee (Paras 6-10). B) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Territorial Jurisdiction - The court clarified that the 'bank' referred to in Section 138 is the drawee bank, and the place of presentation by the payee is irrelevant for jurisdiction. Held that the complaints filed at Aurangabad were without jurisdiction as the cheques were drawn on a Mumbai bank (Paras 6-10).
Issue of Consideration
Whether the Judicial Magistrate First Class, Aurangabad had territorial jurisdiction to entertain complaints under Section 138 of the Negotiable Instruments Act, 1881, where the cheques were drawn on a bank at Mumbai and deposited by the complainant at Aurangabad.
Final Decision
The court allowed the applications and quashed the complaints pending before the Judicial Magistrate First Class, Aurangabad, for lack of territorial jurisdiction.
Law Points
- Territorial jurisdiction under Section 138 of Negotiable Instruments Act
- 1881 is determined by the location of the drawee bank branch on which the cheque is drawn
- not the place of presentation or deposit by the payee
- Place of issuance or delivery of notice is irrelevant for jurisdiction
- Section 138 NI Act creates a single composite offence
- Jurisdiction vests in court within whose local limits the drawee bank branch is situated
