Case Note & Summary
The petitioner, Helcino Aleixo Fernandes, a businessman residing in Majorda, Goa, filed nine complaints under Section 138 of the Negotiable Instruments Act, 1881 against the respondent, Milind Madhukar Bhende, for dishonour of cheques. The respondent had taken a hand loan from the petitioner and issued nine cheques drawn on his account with HDFC Bank Ltd at Panaji, which were payable at par at all branches of HDFC Bank. The petitioner presented these cheques for encashment at his account with Corporation Bank at Uttorda, Majorda, within the jurisdiction of the Judicial Magistrate, First Class at Margao. All cheques were dishonoured due to insufficient funds. After issuing statutory notices, the petitioner filed complaints at Margao. The respondent filed applications challenging the territorial jurisdiction of the Margao court, which were dismissed by the Magistrate. The respondent then appealed to the Sessions Judge, who reversed the Magistrate's order and directed return of the complaints for presentation to the proper court, without specifying which court. The petitioner challenged this order in the High Court. The High Court examined the legal issue of territorial jurisdiction under Section 138 of the NI Act, considering that the cheques were payable at par at all branches. The court held that the place where the cheque is presented for encashment and dishonoured is a place where the cause of action arises, especially when the cheque is payable at par. Since the petitioner presented the cheques at his bank branch in Majorda, within Margao jurisdiction, the Margao court had jurisdiction. The High Court set aside the Sessions Judge's order and restored the complaints to the file of the Judicial Magistrate, First Class at Margao for further proceedings.
Headnote
A) Criminal Law - Dishonour of Cheque - Territorial Jurisdiction - Section 138, Negotiable Instruments Act, 1881 - The issue was whether the court at Margao had jurisdiction when cheques were drawn on a bank at Panaji but payable at par at all branches and presented at a branch within Margao. The court held that the place where the cheque is presented for encashment and dishonoured gives rise to the cause of action, and thus the court at Margao had jurisdiction. (Paras 2-10) B) Criminal Procedure - Return of Complaint - Proper Court - Section 201, Code of Criminal Procedure, 1973 - The Sessions Judge ordered return of complaints without specifying the proper court. The High Court held that such an order is improper and set it aside, restoring the complaints to the file of the Magistrate at Margao. (Paras 3-10)
Issue of Consideration
Whether the Judicial Magistrate, First Class at Margao had territorial jurisdiction to entertain complaints under Section 138 of the Negotiable Instruments Act, 1881, when the cheques were drawn on a bank at Panaji but were payable at par at all branches and were presented for encashment at a branch within Margao jurisdiction.
Final Decision
The High Court allowed the applications, set aside the order of the Sessions Judge, and restored the complaints to the file of the Judicial Magistrate, First Class at Margao for further proceedings in accordance with law.
Law Points
- Territorial jurisdiction under Section 138 of the Negotiable Instruments Act
- 1881 is determined by the place where the cheque is presented for encashment
- especially when the cheque is payable at par at all branches of the drawee bank
- the place of the branch where the payee maintains his account and presents the cheque constitutes a place where the cause of action arises.
