Costal Projects Limited vs Standard Chartered Bank

S. Nagamuthu, J.—The petitioners are the accused in C.C.No. 818 of 2013 on the file of the Fast Track Court, Magistrate Court, George Town, Chennai (Originally the case was filled before the VII Metropolitan Magistrate, George Town, Chennai and subsequently transferred and being heard by the Fast Track Court, Magistrate Court, George Town, Chennai). The respondent is the complainant in the case. The respondent has filed the said case by way of a private complaint alleging that the petitioners have committed an offence punishable under Section 138 of the Negotiable Instruments Act.

The learned Magistrate has taken cognizance and has issued summons. The petitioners have on service of summons appeared before the lower Court. Now the petitioners have come up with this petition seeking to quash the said proceedings.

I have heard the learned senior counsel Mr.Ar.L.Sundaresan, appearing for the petitioners and Mr.A.Ramesh, learned senior counsel appearing for the respondent as well as perused the records carefully.

The brief facts of the case would be as follows:

In respect of an alleged legally enforceable debt due from the first petitioner company to the respondent, a cheque was issued by the fourth petitioner on behalf of the first petitioner company. The other petitioners were directors of the first accused company and thus alleging that they are in-charge of the day to day affairs of the company they were also included as accused in this case. Admittedly the cheque was drawn on State Bank of Travancore, Bangalore for Rs.15,00,00,000/- on 31.08.2012 and the cheque was presented in the respondent/Standard Chartered Bank branch at Chennai. The same was forwarded to the State Bank of Travancore, Bangalore, where it was dishonoured for want of sufficient funds. It was returned by the said bank to the respondent thereafter. The respondent issued a statutory notice under Section 138 of the Negotiable Instruments Act and since the same has not been complied with, he launched prosecution before the Fast Track Court, Magistrate Court, George Town, Chennai. As I have already pointed out, the learned Magistrate has taken cognizance and issued summons and accordingly the petitioners have made appearance.

In this petition, it is contended by the petitioners that the learned Magistrate at Chennai has got no jurisdiction to deal with the case. The learned senior counsel appearing for the petitioners would submit that the order of the learned Magistrate, Chennai taking cognizance of the offence is wholly without jurisdiction and therefore the entire case should be quashed.

The learned senior counsel appearing for the respondent would submit that, on facts, there was part of cause of action falling within the jurisdiction of the learned Magistrate at Chennai. According to him, since the cheque was presented for collection in the respondent branch at Chennai, the learned Magistrate at Chennai has got jurisdiction.

I have considered the above submissions.

The Hon''ble Supreme Court in Dashrath Rupsingh Rathod Vs. State of Maharashtra, has now settled the law once and for all by removing the doubt about the term ''Territorial Jurisdiction'' of Courts to try offence. The Hon''ble Supreme Court has now held in the said judgment that though it may be true that the Cheque was presented before a particular bank for collection that would not give jurisdiction to the learned Magistrate of that area to try the case. The Hon''ble Supreme Court has held that the presentation of the cheque at a particular place will not create either in full or in part the cause of action. If once the said law is applied to the facts of this case, it becomes clear that the learned Magistrate at Chennai has got no territorial jurisdiction to try the offence as the entire cause of action arose only in Bangalore. Therefore, the appropriate learned Metropolitan Magistrate at Bangalore alone shall have jurisdiction to try the offence.

The Hon''ble Supreme Court in respect of the pending cases has issued certain directions which are found in paragraph 20 of the said Judgment, which reads as follows:

"20. We are quite alive to the magnitude of the impact that the present decision shall have to possibly lakhs of cases pending in various Courts spanning across the country. One approach could be to declare that this judgment will have only prospective pertinence, i.e. applicability to Complaints that may be filed after this pronouncement. However, keeping in perspective the hardship that this will continue to bear on alleged accused/respondents who may have to travel long distances in conducting their defence, and also mindful of the legal implications of proceedings being permitted to continue in a Court devoid of jurisdiction, this recourse in entirety does not commend itself to us. Consequent on considerable consideration we think it expedient to direct that only those cases where, post the summoning and appearance of the alleged Accused, the recording of evidence has commenced as envisaged in Section 145(2) of the Negotiable Instruments Act, 1881, will proceeding continue at that place. To clarify, regardless of whether evidence has been led before the Magistrate at the pre-summoning stage, either by affidavit or by oral statement, the Complaint will be maintainable only at the place where the cheque stands dishonoured. To obviate and eradicate any legal complications, the category of Complaint cases where proceedings have gone to the stage of Section 145(2) or beyond shall be deemed to have been transferred by us from the Court ordinarily possessing territorial jurisdiction, as now clarified, to the Court where it is presently pending. All other Complaints (obviously including those where the accused/respondent has not been properly served) shall be returned to the Complainant for filing in the proper Court, in consonance with our exposition of the law. If such Complaints are filed/refiled within thirty days of their return, they shall be deemed to have been filed within the time prescribed by law, unless the initial or prior filing was itself time barred."

A cursory reading of the directions of the Hon''ble Supreme Court would go to show that in respect of a case where already evidence has been recorded under Section 145(2) of the Act, though the Court where the case is pending has got no jurisdiction, it shall be deemed as though it was filed before the Court having jurisdiction where cognizance was taken and thereafter by the Hon''ble Supreme Court it was transferred to the Courts where the cases are pending.

The case on hand does not fall in this category.

The Hon''ble Supreme Court has further directed that all the other complaints where the cases have not reached the stage of recording of evidence of the complainant, shall be returned to the complainant for filing before the proper Court, in consonance with the exposition of the law made by the Hon''ble Supreme Court

The case on hand falls in this category because in this case evidence has not been recorded so far. Therefore, the only course available for this Court is to direct the learned Magistrate to return the complaint to the complainant for presentation before the Court having jurisdiction in Bangalore within 30 days from the date of return as directed by the Hon''ble Supreme Court. If it is so re-presented before the jurisdictional Magistrate in Bangalore, the complaint shall be taken on file if it is filed within the time prescribed by law. It is made clear that this Court has not expressed any opinion regarding the other contentions made by the learned senior counsel appearing for the petitioners in this petition and it is left open to raise the same before the lower Court. Consequently, the connected miscellaneous petitions are closed.