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Minaj Hussain @ Meer Minaj Ahmad @ … vs State Of Bihar & Anr on 6 April, 2018

IN THE HIGH COURT OF JUDICATURE AT PATNA
Criminal Miscellaneous No.25296 of 2017
Arising Out of PS.Case No. -2227 Year- 2013 Thana –
BHAGALPUR COMPLAINT CASE District- BHAGALPUR

Minaj Hussain @ Meer Minaj Ahmad @ Meer Minaj Hussain Son of
Meer Irfan Ali, Resident of Village-Tirmuhani, P.O. P.S.-
Amdabad, District-Katihar. (accused)

…. …. Petitioner/s
Versus

1. The State of Bihar

2. Rajeev Upadhyay, Son of Late Ramashankar Upadhyay,C/o-Sri
Tej Narayan Mishra, Resident of Village P.O.-Maheshmunda,
P.S.-Kahalgaon, District-Bhagalpur. (Complainant)

…. …. Opposite Party/s

Appearance :

For the Petitioner/s : Mr. Diwakar Upadhyaya
For the Opposite Party/s : Mr. Sri. Kumar Virendra Narayan

CORAM: HONOURABLE MR. JUSTICE ASHUTOSH KUMAR
CAV JUDGMENT

Date: 06-04-2018

The petitioner has challenged the order dated

05.01.2017 passed by the learned A.C.J.M-XIV, Bhagalpur in

connection with Complaint Case No. 2227 of 2013 whereby the

prayer made on behalf of the petitioner for transferring the

case from Bhagalpur to Katihar on the ground of territorial

jurisdiction has been rejected.

2. Rajeev Upadhyay/O.P. No. 2 had lodged a

complaint vide Complaint Case No. 2227 of 2013 before the

learned Chief Judicial Magistrate, Bhagalpur alleging that the

petitioner had taken money from him which was paid to him by
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cheque for the purposes of expanding the joint business. When

the complainant/O.P. No. 2 felt that the business was not

improving, he demanded his money back. The petitioner, it has

been alleged, tried to return the amount to the complainant/

O.P. No. 2 vide three cheques, the first being a cheque drawn

on Punjab National Bank, Daulat Ram Chauk, Katihar for the

amount of Rs. 11,00,000/-(eleven lakhs); the second cheque

being drawn on Central Bank of India, Katihar for the amount

of Rs. 11,00,000/-(eleven lakhs) and the third cheque again of

Rs. 11,00,000/-(eleven lakhs) drawn on Bank of Baroda,

Katihar Branch.

3. On presentation of the aforesaid cheques in the

account of complainant/O.P. No. 2, the cheques could not be

honoured because of insufficient funds. Even after notice to the

petitioner/accused, no money was forthcoming; hence the

instant complaint was lodged.

4. It further appears from the records that

complainant/O.P. No. 2 had also filed a Police Case at Katihar

vide Katihar (Town) P.S. Case No. 140 of 2010 instituted for

the offences under Sections 420, 406, 465, 468, 471, 506,

120(B) of the Indian Penal Code against the petitioner. The

aforesaid case also relates to the business dispute between the

parties. The aforesaid Police Case is still pending trial at

Katihar. It was thus submitted by the accused/petitioner that
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deliberately the complaint case has been filed in Bhagalpur in

order to mount pressure on him for giving to complainant/O.P.

No. 2 the amount which is being claimed by him.

5. Since all the cheques which are stated to have

been issued by the petitioner, have been drawn on branches of

the banks at Katihar, it was requested by the petitioner that all

theses cases be transferred to Katihar Judgeship which would

have the jurisdiction to try those cases and it would also be in

consonance with the principle of forum convenience of the

parties as the other Police Case is also being contested at

Katihar.

6. The aforesaid prayer has been rejected by the

order impugned on the sole ground that the aforesaid cheques

issued by the petitioner/accused were deposited/presented for

encashment at Bhagalpur which gave the sole jurisdiction to a

competent Court at Bhagalpur to try the case.

7. The petitioner has sought to impugn the aforesaid

order on the following grounds.

(a) The cause of action has accrued at Katihar where

the cheques issued by the petitioner have been dishonoured.

(b) The cheques are not stated to be crossed cheques

and therefore, it would be deemed to have been given to the

complainant/O.P. No. 2 for presenting it before the drawer

bank and
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(c) It would be convenient for the parties if the

Complaint Case at Bhagalpur and the Police Case at Katihar

which have been lodged by the complainant/O.P. No. 2, be

tried in the Katihar Judgeship.

8. The aforesaid contentions of the petitioner has

been sought to be repelled by the learned counsel appearing

for the complainant/O.P. No. 2 on the ground that the

amended Section 142 of the Negotiable Instruments Act, 1881

gives the jurisdiction to try the present complaint only at

Bhagalpur, where the cheques were delivered for collection

through an account as the complainant/O.P. No. 2 maintained

an account at Bhagalpur.

9. Section 142 of the amended Negotiable

Instruments Act reads as follows:-

“142. Cognizance of offences.-[(1)]

Notwithstanding anything contained in the Code of

Criminal Procedure, 1973 (2 of 1974),-

(a) no Court shall take cognizance of any offence

punishable under section 138 except upon a

complaint, in writing, made by the payee or, as the

case may be, the holder in due course of the

cheque;

(b) such complaint is made within one month of the

date on which the cause of action arises under

clause (c) of the proviso to section 138:
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[provided that the cognizance of a complaint may

be taken by the Court after the prescribed period, if

the complainant satisfies the Court that he had

sufficient cause for not making a complaint within

such period;]

(c) no Court inferior to that of a Metropolitan

Magistrate or a Judicial Magistrate of the first class

shall try any offence punishable under section 138.]

[(2) The offence under section 138 shall be inquired

into and tried only by a Court within whose local

jurisdiction,-

(a) if the cheque is delivered for collection through

an account, the branch of the bank where the payee

or holder in due course, as the case may be,

maintains the account, is situated; or

(b) if the cheque is presented for payment by the

payee or holder in due course, otherwise through an

account, the branch of the drawee bank where the

drawer maintains the account, is situated.

Explanation.-For the purposes of clause (a), where

a cheque is delivered for collection at any branch of

the bank of the payee or holder in due course, then,

the cueque shall be deemed to have been delivered

to the branch of the bank in which the payee or

holder in due course, as the case may be, maintains

the account.]”

(emphasis provided)
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10. Sub-clause 2 of Section 142 has been added by

act 26 of 2015 and it has been made effective with effect from

15.06.2015.

11. Prior to the amendment referred to above, the

view which was prevalent with respect to the jurisdiction was

that the locality where the bank (which dishonoured the

cheque) is situated would not be the only place for suing;

rather, it could be either at the place where the drawer resides

or at the place where the payee resides or at the place where

either of them carries on business. Hence, there was difficulty

to fix any particular locality as the place of occurrence for the

offence under Section 138 of the Negotiable Instruments Act.

12. For the sake of completeness, Section 138 of the

Negotiable Instruments Act is being extracted below.

“138. Dishonour of cheque for insufficiency,

etc., of funds in the account.- Where any cheque

drawn by a person on an account maintained by

him with a banker for payment of any amount of

money to another person from out of that account

for the discharge, in whole or in part, of any debt or

other liability, is returned by the bank unpaid, either

because of the amount of money standing to the

credit of that account is insufficient to honour the

cheque or that it exceeds the amount arranged to

be paid from that account by an agreement made
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with the amount arranged to be paid from that

account by an agreement made with the bank, such

person shall be deemed to have committed an

offence and shall, without prejudice to any other

provision of this Act, be punished with

imprisonment for [a term which may be extended to

two years], or with fine which may extend to twice

the amount of the cheque, or with both:

Provided that nothing contained in this section shall

apply unless-

(a) the cheque has been presented to the bank

within a period of six months* from the date on

which it is drawn or within the period of its validity,

whichever is earlier;

(b) the payee or the holder in due course of the

cheque, as the case may be, makes a demand for

the payment of the said amount of money by giving

a notice in writing to the drawer of the cheque,

[within thirty days] of the receipt of information by

him from the bank regarding the return of the

cheque as unpaid; and

(c) the drawer of such cheque fails to make the

payment of the said amount of money to the payee

or as the case may be, to the holder in due course

of the cheque within fifteen days of the receipt of

the said notice.

Explanation-For the purposes of this section, “debt
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or other liability” means a legally enforceable debt

or other liability.”

13. The pre-requisites for initiating a proceeding

under Section 13 of the Negotiable Instruments Act, therefore

is: (i) issuance of the cheque; (ii) presentation of the cheque to

the bank; (iii) retaining the cheque unpaid to the drawer bank;

(iv) giving notice in writing to the drawer of the cheque

demanding payment of the cheque amount and; (v) failure of

the drawer to make payment within fifteen days of the receipt

of the notice.

14. The prevalent view as indicated above was that it

was not necessary that all the above acts should have taken

place at the same locality/place; rather it could have been

effected at different locations. Since the combination of all the

above requirements/facts was considered to be essential for

completion of the offence under Section 138 of the Negotiable

Instruments Act, therefore, in tune with the provisions

contained in Section 177, 178 and 179 of the Code of Criminal

Procedure, which deals with jurisdiction of the criminal Courts

in enquiry and trials, the court having jurisdiction in anyone of

the five areas where different ingredients of the offence under

Section 138 of the Negotiable Instruments Act, 1881 may have

been committed, could exercise the territorial jurisdiction with

respect to anyone of those conditions ingredients.
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15. For easy reference Sections 177, 178 and 179 of

the Code of Criminal Procedure, 1973 are extracted below.

“177. Ordinary place of inquiry and trial.-Every

offence shall ordinarily be inquired into and tried by

a Court within whose local jurisdiction it was

committed.

178. Place of inquiry or trial.-(a) When it is

uncertain in which of several local areas an offence

was committed, or

(b) where an offence is committed partly in one

local area and partly in another, or

(c) where an offence is a continuing one, and

continues to be committed in more local areas than

one, or

(d) where it consists of several acts done in

different local areas, it may be inquired into or tried

by a Court having jurisdiction over any of such local

areas.

179. Offence triable where act is done or

consequence ensues.-When an act is an offence

by reason of anything which has been done and of a

consequence which has ensued, the offence may be

inquired into or tried by a Court within whose local

jurisdiction such thing has been done or such

consequence has ensued.

16. In K. Bhaskaran versus Sankaran Vaidhyan
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Balan and Another (1999) 7 SCC 510, the Supreme Court

held that a complainant can chose anyone of the Courts having

jurisdiction over anyone of the local areas within the territorial

limits in which anyone of the five acts may have been

committed. It was felt by the Supreme Court that as the

amptitude stood so widened and expansive, it would only be an

idle exercise to raise jurisdictional question regarding the

offence under Section 138 of the Negotiable Instruments Act.

17. However, a departure was made by the Supreme

Court in its approach in Harman Electronics Private Limited

and Another versus National Panasonic India Private

Limited (2009) 1 SCC 720. In the aforesaid case, the

Supreme Court examined the question of jurisdiction under a

situation when the appellant before it was from Chandigarh,

who had issued a cheque drawn on a bank at Chandigarh which

was dishonoured. Notice of payment of the dishonoured cheque

was issued from the Head Office of the complainant at Delhi

and on failure of the appellant to pay the money within 15 days

of the notice, complaint was filed in Delhi.

18. Ordinarily, the Courts below, in view of the

judgment in K Bhaskaran (supra) held that Delhi Court had

jurisdiction to try the complaint. However, the drawer/appellant

contended that Chandigarh Court only had the jurisdiction to

try the case. The Supreme Court, but held that a Court derives
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its jurisdiction when a cause of action arises and such

jurisdiction cannot be conferred on or for any act of omission

on the part of the accused. It further held that the receipt of

notice and not issuance of notice will give rise to cause of

action. This led the Supreme Court deliver that Delhi Court will

not have the jurisdiction to try the case.

19. In view of the different strand of thinking in the

two cases referred to above, viz. K. Bhaskaran (Supra) and

Harman Electronics Private Limited (supra), the Supreme

Court, in Dashrath Rupsingh Rathod versus State of

Maharashtra and Another (2014) 9 SCC 129 held that

giving such an expansive interpretation to the provision of

jurisdiction for trying cases under Section 138 of the Negotiable

Instruments Act, 1881 would only result in rampant abuse and

misuse of the law, to the detriment and adversity of the drawer

of a cheque with relative ease. An unbridled/unrestricted power

lay in the hands of a payee to confer single-handedly

jurisdiction to a Court at a place of his convenience.

20. After going through various provisions of law and

earlier cases in that regard, the supreme Court in Dashrath

Rupsingh Rathod (Supra) held that the territorial jurisdiction for

trying the case under Section 138 of the Negotiable

Instruments Act, 1881 would be exclusively determined by the

place/location of the offence. The return of the cheque by the
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drawer bank would only constitute offence of the act under

Section 138 of the Negotiable Instruments Act, 1881. Hence,

the Courts within which drawer bank is located will only have

the jurisdiction to try the case.

21. However, with the aforesaid judgment, some

difficulty arose with the modern banking system. Traditionally,

the cheques travelled from the bank where they were

presented to the drawer bank branch. In the modern day

banking, the cheques do not travel to drawer bank. It was also

felt that from the equity point of view, the jurisdictional issue

needed a clarification.

22. Hence, the amendment under Section 142(2) of

the Negotiable Instruments Act was brought about.

23. The amendment in the act virtually supersedes

the decision of the Supreme Court in Dashrath Rupsingh

Rathod (Supra). Now, with the amendment of Section 142 of

the Negotiable Instruments Act, the Court having jurisdiction

over the place where the payee bank is situated and where the

cheque is delivered for collection through an account , shall

have the jurisdiction to try a case under Section 138 of the

Negotiable Instruments Act, 1881. However, if the cheque is

presented by the payee, otherwise through an account , i.e.

over the counter, the jurisdiction would be of the Court where

the drawer bank is situated.

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24. The explanation added to Section 142(2) of the

N.I. Act further clarifies the issue.

25. Thus, with the amendment in the act referred to

above, since the cheques in question in the case in hand were

presented at Bhagalpur in the bank account of O.P. No. 2, only

the Court at Bhagalpur shall have the jurisdiction to try the

instant complaint.

26. In Bridgestone India Private Limited versus

Inderpal Singh (2016) 2 SCC 75, the appellant before the

Supreme Court (payee or holder in due course) had lodged a

case at Indore for dishonour of the cheque issued by the

accused at Chandigarh, drawn an a bank in Chandigarh. The

Supreme Court, in view of Section 142(2) of the Negotiable

Instruments Act held that the Court at Indore only had the

jurisdiction and not at Chandigarh which was the situs of the

drawer bank.

27. So far generally with respect to jurisdiction.

28. Now over to the other ground raised by the

petitioner that since the cheques were not crossed, it would be

expected that they would be presented for encashment over

the counter which could only be done at the drawer bank, the

jurisdiction in that case would lie to a Court at Katihar.

29. Chapter XIV of the Negotiable Instruments Act

1881 deals with crossed cheques.

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30. A cheque is said to be crossed generally if it bears

across its face, an addition of the words “and company” or any

abbreviation thereof between two parallel transverse lines, or

of two parallel transverse lines shall be either with or without

the words “not negotiable”. If the name of the banker is added,

the cheque is said to be specially crossed.

31. According to Section 125 of the Act, the holder of

the cheque may cross it generally or specially. In that event,

even if a cheque is un-crossed, if it is presented in the drawee

bank (payee bank), it is aimed at getting encashed through the

account only.

32. In that event, there is no option for the

complainant or the accused to seek or confer jurisdiction on

any other Court except the Court within whose territorial

jurisdiction, the payee bank where the cheque has been

presented, is located.

33. It may also be added here that the present

petition has been filed under Section 407 of the Code of

Criminal Procedure, thus necessitating a discussion on the issue

of forum convenience. The criminal case/police case lodged by

the complainant/O.P. No. 2 may be against the petitioner only

but that case operates in a different field, for a different offence

or set of offences. The O.P. No. 2 has deliberately chosen to file

a complaint at Bhagalpur where he maintains an account in
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which the cheques were presented and seeks to oppose the

present petition as well.

34. In that view of the matter, it would only be forum

non-convenience for the parties for this Court to interfere.

35. Finding no merit in this application, it is

dismissed.

(Ashutosh Kumar, J)

Shageer/-

AFR/NAFR AFR
CAV DATE 28.03.2018
Uploading Date 07/04/2018
Transmission 07/04/2018
Date

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