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Judgment
Heard Mr. RL Yadav, learned counsel appearing on behalf of the petitioners and Mr. R De, learned counsel appearing on behalf of the
respondents.
The present petitioner is a partnership firm having its office and place of business atHaibargaon in the district of Nagaon, Assam. The petitioners
No. 2, 3 and 4 are its partners and the said firm applied for loan to the extent of Rs. 2 Crores from the respondent No. 1, ICICI Bank Limited. The
petitioners pledged wheat valued at Rs. 2 Crores by the said loan and the respondent No. 1 took 4 (four) blank cheques from the petitioners as
security against the said loan. An agreement was executed between the parties to that effect whereafter the petitioners purchased 2269.34 MT of
wheat and stocked in the warehouse at Senchuwa, Nagaon under the lock and key of the respondent No. 1 Bank as the same was pledged goods
against the finance of Rs. 1,70,88,659/-. The market price of the wheat nosedived and at that relevant point of time the petitioners received liquidation
notice and the Bank informed that on failure to pay the amount they would initiate action against the petitioners. The petitioners prayed for 4 months
time to sell the pledged goods. The respondent No. 1 was searching for customer to sell the goods at low rate and as such, the petitioners filed Title
Suit No. 47/2007 in the Civil court of Nagaon. Upon an application for interim injunction, the learned trial court granted the injunction restraining the
respondent Bank from selling the pledged goods. On an appeal to the Gauhati High Court, a direction was given to the Bank to sell the pledged goods
at Nagaon but the same was sold at Guwahati at a much lower price than the amount offered by the present petitioners. Thereafter, the petitioners
preferred Title Suit No. 5/2008 in the court of Civil Judge (Sr. Divn.), Nagaon for a direction that the loan amount is not a non-performing asset.
On 19.03.2008 during the course of verification of stocks it was found that only 6135bags of wheat was available in the godown of the respondent
Bank out of 44,755 bags of wheat. The weight of each bag was found 40 Kg instead of 50 Kg and as such, the petitioners filed an FIR on 19.03.2008
at Nagaon regarding missing of stock from the custody of the respondent Bank. The petitioners also filed Money Suit No. 2/2008 claiming
compensation. In the mean while, the respondent No. 1 filed a complaint case being No. 16649/2009 in the court Metropolitan Magistrate, 12th Court
at Kolkata and the learned Magistrate issued summons to the petitioners to appear on 31.08.2009. Thereafter, the petitioner preferred this writ petition
for the following reliefs:-
“It is, therefore, prayed that your lordship may be pleased to issue a Rule, calling upon the respondents to show cause as to why the complaint case
No. 16649/09 U/s 138 of N.I. Act, pending in the court of the Metropolitan Magistrate, 12th Court, Calcutta and the process issued on the basis of the
said complainant case and summons issued U/s 68 of the Code of Criminal Procedure for appearance before the Metropolitan Magistrate, 12th Court,
Calcutta on 31.08.2009 or on any other date shall not be quashed and after hearing the causes that may be shown, the Rule may be made absolute and
any other Order/ Orders as your Lordship may deem fit and proper may also be passed and alternatively why the respondents shall not be directed to
take back the complaint petition filed before the Metropolitan Magistrate, 12th Court, Calcutta and/ or why the learned Metropolitan Magistrate, 12th
Court, Calcutta shall not be directed to recall the process issued against the petitioners and to return the complaint petition to the respondents to file in
the proper court of law having jurisdiction to entertain the complainant if permissible under the law.
Further, it is prayed that pending disposal of the rule the entire proceeding of complaint case No. 16649/09 U/s 138 of N.I. Act pending in the Court of
Metropolitan Magistrate, 12th Court, Calcutta may be stayed.
And for this the humble petitioners shall ever pray.â€
Vide order dated 19.12.2017 passed by this court, learned counsel for the petitionersgiving up the relief of quashing of the Complaint Case No.
16649/2009 under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ‘the Act’) sought for the leave to confine the
writ petition to the alternate prayer for the direction to the complainant to take back the complaint petition from Kolkata court and to file the same in a
court of competent jurisdiction. The same was allowed by this court vide order dated 19.12.2017.
Before taking note of the submission of the learned counsel for the petitioner, it wouldbe proper to take into consideration of the contents of the
complaint petition filed by the respondent No. 1 Bank. It is stated that the complainant, ICICI Bank Limited having its office and place of business at
2, Upper Wood street, Kolkata-700007 and represented by its duly empowered authorised agent, preferred the said complaint. The complainant
company is dealing with various types of finance business including granting of loan. One loan agreement was entered into by and between the
accused (the petitioners) and the complainant company bearing Retail Warehouse Receipt Finance No. 000405037780. In part discharge of the
existing legal debts and/ or liabilities arising out of the aforesaid loan agreement, the accused petitioners issued one Account Payee cheque in favour
of the complainant company the amount of which was Rs. 2,69,62,250/- drawn on Allahabad Bank, Nagaon Branch to Netaji Subhash Road at
Kolkata. Upon such presentation of the said cheque within the validity period, the same was dishonoured by the drawee bank and returned unpaid
along with Memorandum of Dishonour dated 13.02.2009 bearing the endorsement “insufficient fund†which was intimated to the accused
petitioners later on. The fact of such dishonour of cheque was communicated to the accused persons by legal notice dated 23.02.2009 under Section
138(b) of the Act by the complainant bank which was dispatched by Speed Post with A/D on 24.02.2009 demanding payment of the said amount of
the cheque within 15 days from the date of receipt of the said notice. As the demand notice was duly dispatched on the proper and correct address of
the accused petitioners through Speed Post and/ or registered post with A/D and the proper postal expenses was paid to the Kolkata GPO. The period
of 30 days had expired and neither the acknowledgment due card nor the undelivered cover had returned back. As such, a legal presumption of
service of the aforesaid legal demand notice upon the petitioners as per Section 27 of the General Clauses Act had been drawn up. The accused
petitioners have thus committed offence punishable under Section 138 read with Section 141 of the Act. The complainant banker’s address falls
within the jurisdiction of the said learned court and as such, it is the competent authority and has jurisdiction to try the offence in this suit. Thus, the
respondent No. 1 prayed before the learned trial court to take cognizance of the matter and issue process against the accused petitioners under
Section 138 read with Section 141 of the Act.Â
Mr. Yadav disputes the jurisdiction of the Kolkata court as from the plain reading of thecomplaint petition, the jurisdiction of the court cannot be
ascertained inasmuch as the respondent No. 1 as the complainant failed to show that any cause of action has arisen within the jurisdiction of the court
at Kolkata and as such, the Kolkata court has no jurisdiction to issue process. It is submitted that the respondent Bank intentionally avoided to mention
the real facts only to avoid the place of occurrence and if at all any cause of action has arisen that must be at Nagaon, in the district of Nagaon,
Assam and not at Kolkata as the connected loan transaction was entered into at Nagaon and the complaint petition is not tenable and liable to be
quashed. Â
Mr. Yadav further submits that the respondent Bank by making concocted story filedthe complaint petition and that too, within the jurisdiction of the
Kolkata court under whom no cause of action or any part thereof has arisen. As such, the act of issuance of the process against the present
petitioners is totally illegal and without jurisdiction and as such, the complaint petition as well as issue of process is liable to be quashed. Process issued
by the Kolkata court without any jurisdiction is an abuse of process of law and the entire process is liable to be quashed.
Mr. De, on the other hand, submits that the offence under Section 138 of the Act canbe completed only on the occurrence of principle of acts like
drawing of the cheque, presentation of the cheque in bank, returning the cheque unpaid by the drawee bank, giving notice in writing to the drawer of
the cheque demanding payment of the cheque amount and failure of the drawer to make payment within 15 days of the receipt of the notice. It is not
necessary that all the five acts should have been perpetrated at the same locality. If five different acts are done in five different localities, anyone of
the courts exercising jurisdiction in one of the five areas can become the place of trial for the offence under Section 138 of the Act and a complainant
can chose any of those courts having jurisdiction over any of the acts within the territorial limits of which any of those five acts was done. In the
present case, notices were issued to the accused petitioners from Kolkata court and as such, filing of the complaint at Kolkata is sufficient inasmuch
as the cause of action has accrued therein as from the petition itself it is seen that notice was issued from the Kolkata claiming the cheque amount.
Confining and considering the submission of the learned counsel appearing for theparties to the extent of relief sought for by the petitioners, let me
examine as to whether the Kolkata court is having competent jurisdiction for issuance of the process in the said Complaint Case No. 16649/2009
under Section 138 of the Act.
It is worth mentioning that the Negotiable Instruments Act, 1881 was amended videthe Amendment Act, 2015. The pre-amended Section 142 of
the Act is reproduced hereinbelow:-
 “142. Cognizance of offences. â€" 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:
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.â€
In K. Bhaskaran v. Sankaran Vaidhyan Balan reported in 1999 (7) SCC 510, it was held that the offence under Section 138 of the Act can be
completed only with the concatenation of a number of acts like (1) drawing of the cheque, (2) presentation of the cheque to the bank, (3) returning the
cheque unpaid by the drawee bank, (4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, (5) failure of
the drawer to make payment within 15 days of the receipt of the notice. Drawing reference to Section 178 (d) of the Code of Criminal Procedure, a
two judge bench held that if five different acts were done in five different localities, any one of the courts exercising jurisdiction in one of the five local
areas can become the place of trial for the offence under Section 138 of the Act. Thus, prior to the amendment of 2015, the complainant had the
option to file the complaint petition in any of the five local areas wherein any one of the five acts referred hereinabove took place.
A three judge bench of the Hon’ble Apex Court in Dashrath Rupsingh Rathod v. State of Maharashtra and another reported in (2014) 9 SCC
129, disagreed with the view of K. Bhaskaran (supra) and held that the territorial jurisdiction for filing of cheque dishonoured complaint is restricted to
the court within whose territorial jurisdiction the offence is committed. Place of issuance or delivery of the statutory notice or where the complainant
chooses to present the cheque for encashment by his bank was not relevant for the purpose of determining the territorial jurisdiction of the court for
filing such complaint.
Then comes the Negotiable Instruments (Amendment) Act, 2015 on the basis of whichamendment was affected in Section 142 of the Act along
with the introduction of Section 142A of which the relevant portion is reproduced hereinbelow along with the amended Section 142 of the Act:-
 “142. Cognizance of offences. â€" 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:
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.â€
“142-A. Validation for transfer of pending cases. â€" (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974)
or any judgment, decree, order or direction of any court, all cases transferred to the court having jurisdiction under sub-section (2) of Section 142, as
amended by the Negotiable Instruments (Amendment) Ordinance, 2015, shall be deemed to have been transferred under this Act, as if that sub-
section had been in force at all material times..â€
From the amended provision of Section 142 (2), it can be summarised that, firstly,when the cheque is delivered for collection through an account,
the complaint is to be filed before the court where the branch of the bank is situated, where the payee or holder in due course maintains his account.
Secondly, when the cheque is presented for payment over the counter, the complaint is to be filed before the court where the drawer maintains his
account. Section 142-A stipulates all cases pending before any court, whether filed before it or transferred to it, pending before 15.06.2015 shall be
transferred to the court having jurisdiction as per Section 142(2) by bringing a legal fiction as if the sub section (2) of Section 142 had been in force at
all material times. This writ petition was filed in the year 2009 and at that relevant point of time, the ratio of K. Bhaskaran case (supra) was followed
so far filing of complaint by a complainant against dishonour of cheque was concerned and as mentioned hereinabove, the complainant had the option
of filing such complaint before any of the courts under which territorial jurisdiction the five acts referred hereinabove took place. Keeping in view the
intent of Section 142-A, sub section (1), introduced after the amendment which created the legal fiction as stated hereinabove that sub section (2) of
Section 142 as amended by Negotiable Instruments (Amendment) Ordinance, 2015 be presumed to be in force at all material times shall have to be
considered in deciding this application by taking judicial notice as subsequent event by this court. In Om Prakash Gupta v. Ranbir B. Goyal reported in
AIR 2002 SC 665, the Hon’ble Apex Court held with regard to subsequent events as follows:-
“11. The ordinary rule of civil law is that the rights of the parties stand crystallised on the date of the institution of the suit and, therefore, the
decree in a suit should accord with the rights of the parties as they stood at the commencement of the lis. However, the Court has power to take a
note of subsequent events and mould the relief accordingly subject to the following conditions being satisfied: (i) that the relief as claimed originally
has, by reason of subsequent events, become inappropriate or cannot be granted; (ii) that taking note of such subsequent event or changed
circumstances would shorten litigation and enable complete justice being done to the parties; (iii) that such subsequent event is brought to the notice of
the Court promptly and in accordance with the rules of procedural law so that the opposite party is not taken by surprise. ........
Such subsequent event may be one purely of law or founded on facts. In the former case, the Court may take judicial notice of the event and
before acting thereon put the parties on notice of how the change in law is going to affect the rights and obligations of the parties and modify or mould
the course of loitigation or the relief so as to bring it in conformity with the law. In the latter case, the party relying on the subsequent event, which
consists of facts not beyond pale of controversy either as to their existence or in their impact, is expected to have resort to amendment of pleadings
under Order 6, Rule 17 of the CPC. Such subsequent event the Court may permit being introduced into the pleadings by way of amendment as it
would be necessary to do so for the purpose of determining real questions in controversy between the parties. In Messrs. Trojan & Co. v. R.M.N.N.
Nagappa Chettiar, AIR 1953 SC 235, this Court has held that the decision of a case cannot be based on grounds outside the pleadings of the parties
and it is the case pleaded that has to be found; without the amendment of the pleadings the Court would not be entitled to modify or alter the relief. In
Sri Mahanta Govind Rao v. Sita Ram Kesho and others, (1898) 25 Indian Appeals 195 (PC), their Lordships observed that, as a rule, relief not
founded on the pleadings should not be granted.â€
In view of the said subsequent event of amendment, the complaint petition filed by therespondent must be looked into. From the said complaint
petition it is seen that the complainant respondent is having its office at Kolkata and in part discharge of legal debts arising out of the loan agreement
entered into by the complainant respondent and the petitioner firm, the later issued one account payee cheque in favour of the respondent complainant
company. The cheque was drawn at Allahabad Bank Nagaon Branch/ Netaji Subhash Road, Kolkata. Upon presentation of the said cheque, the same
was dishonoured by the drawee bank and returned unpaid due to insufficient fund which was intimated to the respondent complainant. It is also stated
in the complaint petition that the address of the banker of the complainant respondent falls within the jurisdiction of the court at Kolkata. As such, the
account payee cheque in the name of the complainant respondent was deposited in the bank at Kolkata and as per amended provision of sub section
(2) of Section 142 of the Act, the case falls within sub section (a) of the said provision inasmuch as the cheque was delivered for collection through an
account of the complainant respondent, the branch of the bank being under the local jurisdiction of the court of Metropolitan Magistrate at Kolkata. In
view of the discussions made hereinabove, I am of the opinion that from the complaint petition and taking judicial notice of the subsequent changes in
the law, the complaint against the dishonour of the account payee cheque is rightly filed under the court taking cognizance and as such I find no merit
in this writ petition. Accordingly, the same stands dismissed.
Interim order passed earlier stands vacated.