AI Structured Summary
Not yet generated for this judgment
Judgment
K. Chandru, J.—The petitioners in all these petitions seek to quash the process issued by the first respondent Judicial Magistrate I Class,
Raipur, Chhattisgarh State, or to transfer the case to the file of the Judicial Magistrate First Class, Coonoor in Tamil Nadu State.
In so far as W.P. No. 34289 of 2006 is concerned, it is a strange prayer where the petitioners seek to quash the un-numbered process in No.
541 of 2005 on the file of the Judicial Magistrate First Class, Raipur, Chhattisgarh or to transfer the same to the Court of Judicial Magistrate First
Class in the State of Tamil Nadu.
It is not known as to how the petitioners can file a writ petition even before the process can be issued by the competent Criminal Court and it is
also not clear as to how the petitioners have produced an alleged copy of the un-numbered process and filed it along with the typed set. It is stated
in the affidavit that they have received summons from the Court for hearing even though there was no such summons in respect of this case.
Therefore, it is clearly a false statement made in the affidavit. So far as this writ petition is concerned, it is a clear abuse of process of Court and
there is absolutely no cause of action for the petitioners to file this writ petition and clubbing it along with the other writ petitions where process
have been issued. The intention is clearly discernible and if the other writ petitions are admitted, this can also be pushed along with the same so as
to get an interim order against an un-initiated action by the learned Magistrate. Hence, this writ petition, viz., W.P. No. 34289 of 2006 deserves to
be dismissed with exemplary cost of Rs. 5000/- [Rupees Five thousand only] to be paid to the Tamil Nadu State Legal Services Authority within a
period of one month from the date of receipt of a copy of this order.
In respect of the other writ petitions, viz., W.P. Nos. 34290 to 34295 of 2006, the petitioners are challenging the process issued by the first
respondent Judicial Magistrate First Class, Raipur, Chhattisgarh, u/s 200 Cr.P.C. on a complaint being filed by the second respondent u/s 138 of
the Negotiable Instruments Act, 1881 (for short, ""N.I. Act"").
Even as per the averments made by the writ petitioners, the second respondent is a licensed Tea Broker and he used to take the tea from the
petitioners'' Company and sell it in public auction and sometimes, in private market to render an account. On receipt of the tea from the petitioners''
factory, sometimes he used to pay advance and thereafter, he will settle the balance amount. For this purpose, he used to take blank cheques and
blank pronotes from the petitioners by way of security for the advance paid by him. It is also stated that the second respondent is not entitled for
interest for the advance amount paid as per the terms and conditions of the Broker''s Licence issued by the Teac Board of India. It is further stated
that the second respondent used to give loan on long term basis on huge rate of compound interest on the basis of blank cheques and blank
pronotes and started exploiting their financial needs and weakness. It is also stated that the second respondent used to charge interest at the rate of
36% per annum and the provisions of the Tamil Nadu Charging of Exorbitant Interest Act 2003 prohibit the same and he cannot charge more than
9% simple interest for secured debts and 12% simple interest for unsecured debts. It is also stated that the second respondent has not rendered
true and proper account regarding the balance sale amount after deducting the advance paid and the unsold stock. It is further stated that the
second respondent misused one blank cheque and filled it as if the petitioners agreed to pay a sum of Rs. 5 lakhs towards repayment of the
advance received on several dates amounting to Rs. 38,66,169.14 and with malafide intention, he wanted to harass the petitioners and used the
cheque as if it was issued on 16.12.2005 bearing Cheque No. 021001 and presented it for encashment with ICICI Bank, Chaubey Colony,
Raipur, Chattisgarh. It is stated that even though the second respondent had a Bank account at Union Bank of India at Coonoor and all these
years, he deposited the cheques issued by the petitioners only at Coonoor, at present, for strange reasons, the cheques were presented at Raipur.
It is admitted that the cheque issued by the petitioners was dishonoured on 09.12.2005 by the petitioners'' banker. It is further stated that even
though the petitioners had sent a letter to the second respondent, he has filed the complaint and that because of the same, they have received
summons from the Court for hearing on 20.7.2006.
At the outset, it can be clearly stated that this Court has no power to transfer a case pending on the file of the Judicial Magistrate First Class,
Raipur, Chhattisgarh State, to the Judicial Magistrate First Class, Coonoor, Tamil Nadu, which is made as an alternative prayer. Such a prayer
cannot be countenanced by this Court as it is incompetent to make any interstate transfer under the provisions of the Cr.P.C. and, therefore, that
cannot be granted by this Court.
7.1. When asked as to how this Court has got jurisdiction to deal with the complaint taken cognizance by a Court in Chhattisgarh State and also
the process being issued, Mr. M. Jayaraman, the learned Counsel appearing for the petitioners relied upon the decision of the Supreme Court
reported in Navinchandra N. Majithia Vs. State of Maharashtra and Others, wherein the Supreme Court held that so far as the question of
territorial jurisdiction with reference to a criminal offence is concerned, the main factor to be considered is the place where the alleged offence was
committed. In that case, the High Court of Bombay dismissed the writ petition holding that it cannot be entertained in the writ petition since the
prayer was to quash the complaint, which was lodged by the complainant at Shillong in the state of Meghalaya. Rejecting the contention, the
Supreme Court, in paragraph 17 of the judgment, held as follows:
From the provision in Clause (2) of Article 226 it is clear that the maintainability or otherwise of the writ petition in the High Court depends on
whether the cause of action for filing the same arose, wholly or in part, within the territorial jurisdiction of that Court.
Further, in paragraph 27 of the judgment, the Supreme Court observed as follows:
Tested in the light of the principles laid down in the cases noted above the judgment of the High Court under challenge is unsustainable. The High
Court failed to consider all the relevant facts necessary to arrive at a proper decision on the question of maintainability of the writ petition, on the
ground of lack of territorial jurisdiction. The Court based its decision on the sole consideration that the complainant had filed the complaint at
Shillong in the State of Meghalaya and the petitioner had prayed for quashing the said complaint. The High Court did not also consider the
alternative prayer made in the writ petition that a writ of mandamus be issued to the State of Meghalaya to transfer the investigation to Mumbai
Police. The High Court also did not take note of the averments in the writ petition that filing of the complaint at Shillong was a mala fide move on
the part of the complainant to harass and pressurize the petitioners to reverse the transaction for transfer of shares. The relief sought in the writ
petition may be one of the relevant criteria for consideration of the question but cannot be the sole consideration in the matter. On the averments
made in the writ petition gist of which has been noted earlier it cannot be said that no part of the cause of action for filing the writ petition arose
within the territorial jurisdiction of the Bombay High Court.
7.2. But, it must be noted that in the very same decision, while granting the relief, the Court did not remit the matter to the High Court. It allowed
the appeal setting aside the judgment of the High Court. While exercising its inherent powers, the Supreme Court transferred the case pending
before the Senior Superintendent of Police, CID, Shillong, to Mumbai Police for further investigation through its officers in accordance with law.
However, in the present case, we are not dealing with any investigation by the Police but on a private complaint given by a party before the
competent Court and that Court has taken cognizance of the complaint and issued process.
7.3. The learned Counsel also relied on a decision of the Supreme Court reported in Musaraf Hossain Khan Vs. Bhagheeratha Engg. Ltd. and
Others, to drive home the point that the power under Article 226 of the Constitution of India can be invoked even though the process might have
been issued by a Magistrate from another District. While there is no dispute with reference to the proposition made that the power under Article
226 to interdict criminal process is very much available to this Court, but in the very same decision, while dealing with the offence u/s 138 of the
N.I. Act, the Supreme Court struck a note of caution in the following words, which are found in paragraph 34 of the said judgment and the same is
extracted below:
...It is now well known that the object of the provision of Section 138 of the Act is that for proper and smooth functioning of business transaction
in particular, use of cheques as negotiable instruments would primarily depend upon the integrity and honesty of the parties. It was noticed that
cheques used to be issued as a device inter alia for defrauding the creditors and stalling the payments. It was also noticed in a number of decisions
of this Court that dishonour of a cheque by the bank causes incalculable loss, injury and inconvenience to the payee and the entire credibility of the
business transaction within and outside the country suffers a serious set back. It was also found that the remedy available in a civil court is a long-
drawn process and an unscrupulous drawyer normally takes various pleas to defeat the genuine claim of the payee.
[See Goa Plast (P) Ltd. Vs. Chico Ursula D''Souza, and Monaben Ketanbhai Shah and Another Vs. State of Gujarat and Others, .
7.4. The learned Counsel further relied on the decision of the Supreme Court reported in Mayar (H.K.) Ltd. and Others Vs. Owners and Parties,
Vessel M.V. Fortune Express and Others, once again for reiterating the position regarding the cause of action. I am afraid, the said decision
analysed the provisions under the CPC with reference to the cause of action, which may not have much bearing on a criminal process being issued.
In any event, the Supreme Court in its recent decision reported in Om Prakash Srivastava Vs. Union of India (UOI) and Another, , once again
affirmed the Navinchandra N. Majithia''s case (cited supra) and held that the jurisdiction of the High Court is very wide.
The issue now to be decided in these petitions is not the question of jurisdiction not being available to this Court but whether such a jurisdiction
can be exercised in the present case. The complaint filed by the second respondent is annexed to the typed set of papers and the averments made
in the complaint, which are found in paragraphs 1 to 7, are extracted below:
The complainant is a registered firm and is a division of M/s Sunitha Finlease Limited, Raipur. The Registered Office is Opposite to Rajkumar
College, G.E. Road, Raipur.
The accused borrowed money from the complainant from time to time. As on 30.6.2003 the balance outstanding of the accused in the account
of the complainant is a sum of Rs. 30,87,380.87 (Rupees Thirty lakhs Eighty Seven Thousand Three Hundred and Eighty and Eighty Seven Paise).
The accused issued a cheque bearing No. 466095/10 dated 09.12.2003 for Rs. 5,00,000/- (Five Lakh Rupees) drawn on Indian Bank,
Gudalur Branch, Nilgiri to the complainant towards part payment of the above said liability.
The complainant presented the above said cheque for realization into his bank Union Bank of India, Samala Colony, Raipur into their account
and was sent to the accused bank for realization.
The Bank of the accused returned to the above said cheque dishonoured for the reason ""insufficient funds"" on 23.12.2003.
The intimation on the said dishonour of cheque was given by the bank of the complainant on 30.12.2003. The complainant through his counsel
Mr. G.L.Bawaria issued a notice on 20.1.2004 by Registered Post with Acknowledgement due to the accused demanding the amount and the first
accused received the same on 24.1.2004 and the second accused received the same on 26.1.2004 and the others refused and returned the notice.
The accused knowing fully well that there is no funds available in their account issued the cheque to the complainant which got dishonoured and
thereby the accused put the complainant to great hardship and committed deceit, cheating and fraud.
It is also seen from the process issued by the first respondent Magistrate that the learned Magistrate has exercised his jurisdiction in terms of
Sections 200 - 202 Cr.P.C. and accordingly, issued the process. The learned Counsel submitted that the learned Magistrate, who is shown as first
respondent in these petitions, ought to have postponed the issue of process and should have ordered for investigation which has not been done in
these cases. This is not an offence arising out of any other enactment but an offence u/s 138 of the N.I. Act and, therefore, there was not necessity
for investigating the commission of any offence and only method that is contemplated u/s 138 of the N.I. Act is by filing a private complaint as
made clear u/s 142 - A of the N.I. Act. Not all the relevant ingredients which are found u/s 138 of the N.I. Act, are made in the written complaint.
There is no other option open to the Magistrate but to issue process.
In this context, it is necessary to refer to the decisions of the Supreme Court as to the nature of the discretion that is vested with this Court in
quashing the criminal complaint. In the decision reported in K. Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, , in paragraphs 14 to 16,
the Supreme Court observed as follows:
The offence u/s 138 of the Act can be completed only with the concatenation of a number of acts. The following are the acts which are
components of the said offence: (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.
It is not necessary that all the above five acts should have been perpetrated at the same locality. It is possible that each of those five acts could
be done at five different localities. But a concatenation of all the above five is a sine qua non for the completion of the offence u/s 138 of the Code.
In this context a reference to Section 178(d) of the Code is useful. It is extracted below:
(a)-(c) * * *
(d) Where the offence consists of several acts done in different local areas, it may be enquired into or tried by a Court having jurisdiction over any
of such local areas.
Thus it is clear, if the 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 u/s 138 of the Act. In other words, the complainant can choose any one of those courts having
jurisdiction over any one of the local areas within the territorial limits of which any one of those five acts was done. As the amplitude stands so
widened and so expansive it is an idle exercise to raise jurisdictional question regarding the offence u/s 138 of the Act.
In these cases, excepting the drawing of the cheque, all the other ingredients are found to have taken place within the territorial jurisdiction of
the first respondent Magistrate at Raipur. Therefore, it cannot be pleaded that the first respondent lakhs jurisdiction in entertaining the complaint.
12.1. The Supreme Court in paragraphs 10 and 11 of its decision reported in M.M.T.C. Ltd. and Another Vs. Medchl Chemicals and Pharma (P)
Ltd. and Another, has observed as follows:
...Section 142 of the Negotiable Instruments Act provides that a complaint under /section 138 can be made by the payee or the holder in due
course of the said cheque. The two complaints, in question, are by the appellant Company who is the payee of the two cheques.
This Court has, as far back as, in the case of Vishwa Mitter v. O.P. Poddar held that it is clear that anyone can set the criminal law in motion
by filing a complaint of facts constituting an offence before a Magistrate entitled to take cognizance. It has been held that no court can decline to
take cognizance on the sole ground that the complainant was not competent to file the complaint. It has been held that if any special statute
prescribes offences and makes any special provision for taking cognizance of such offences under the statute, then the complainant requesting the
Magistrate to take cognizance of the offence must satisfy the eligibility criterion prescribed by the statute. In the present case, the only eligibility
criteria prescribed by Section 142 is that the complaint must be by the payee or the holder in due course. This criteria is satisfied as the complaint
is in the name and on behalf of the appellant Company.
12.2. In the same judgment, in paragraph 13, the Supreme Court struck a note of caution in exercising jurisdiction by the High Court in the
following words:
...the learned Judge has ignored the well-settled law that the power of quashing criminal proceedings should be exercised very stringently and with
circumspection. It is settled law that at this stage the Court is not justified in embarking upon an enquiry as to the reliability or genuineness or
otherwise of the allegations made in the complaint. The inherent powers do not confer an arbitrary jurisdiction on the court to act according to its
whim or caprice. At this stage the Court could not have gone into merits and / or come to a conclusion that there was no existing debt or liability.
12.3. In 2004 SCC (CRI) 527 [S.A. Nanjundeswara v. Varlak Agrotech (P) Ltd.] the Supreme Court again cautioned the High Court in dealing
with the petition u/s 482 Cr.P.C. in quashing the criminal complaint and in paragraph 5 of the judgment, it was observed as follows:
Having examined the rival submissions and on examining the assertions made in the complaint and on scrutinizing the impugned judgment of the
High Court we have no hesitation to come to the conclusion that the High Court exceeded its jurisdiction by invoking the power u/s 482 of the
Code of Criminal Procedure and quashing the proceedings so far as accused Smt. Veralakshmi Gundu Rao is concerned. The High Court can be
justified in quashing the proceedings only if it comes to the conclusion that even the statements taken on face value do not make out any offence.
Obviously applying that standard it cannot be said that no offence has been made out against Smt Veralakshmi Gundu Rao.
The criteria found in the above said passage do not apply to the facts of the present case.
12.4. Further, the Supreme Court in its decision reported in (2005) 10 SCC 626 [Gurcharan Singh and Anr. v. Allied Motors Ltd. and Anr.] held
with regard to the proceedings u/s 138 of the N.I. Act and the relevant passage as found in paragraph 5 of the judgment is extracted below:
...It is elementary that the civil proceedings or arbitration proceedings for recovery and the criminal proceedings u/s 138 of the Negotiable
Instruments Act are based on independent cause of action. The making of the award may be a defence to such a complaint but to what extent the
defence would be valid, shall depend upon the facts and circumstances of the case. Mere making of the award cannot be a ground to stall or stay
the proceedings initiated u/s 138 of the Negotiable Instruments Act. That being the only ground to stay the criminal proceedings of complaint
cases, we are unable to sustain the impugned order of the High Court.
12.5. Further, in paragraph 5 of the decision reported in T.K. Koya Vs. K. Devaraj, , the Supreme Court held as follows:
In the pre-summoning evidence, statement to the aforesaid effect was made by the complainant appellant. In this view, there was no basis for the
conclusion that the complainant had not complied with the provisions of Section 138 of the Negotiable Instruments Act, 1881. The exercise of
power of quashing was unwarranted on the facts of the case. At this stage we are not concerned with the defence of the accused. It would, of
course, be open to the accused to take such defence as may be available to him in accordance with law.
If the pleadings of the parties and the above binding precedents are taken note of, the petitioners have not made out any case for entertaining
the petition under Article 226 of the Constitution of India to exercise the extra-ordinary jurisdiction to quash the process issued by the first
respondent.
The argument that if the complaint is heard in the Courts in Chennai, the petitioner will have the benefit of the Tamil Nadu Charging of
Exorbitant Interest Act 2003 (Act 38 of 2003) and, therefore, their case must be tried only in the Courts in Tamil Nadu, cannot be countenanced.
It is an Act which has imposed a ceiling on the interest to be charged and prevents exorbitant interest. Even in the case of the petitioners, in respect
of the amount as per the cheque issued to the second respondent, it is well open to them to lay a complaint in any Court in Tamil Nadu in respect
of charging exorbitant rate of interest and it is a separate cause of action unconnected with the offence u/s 138 of the N.I. Act.
The learned Counsel appearing for the petitioners drew the attention of this Court to some interim orders passed by this Court in similar
circumstances and pleaded that these writ petitions also should be admitted and similar order should be passed. It is needless to state that they are
all exparte interim orders without any reason and it cannot have any binding precedent. In the light of the wealth of decisions referred to above and
in view of the fact that this Court is dealing with the very maintainability of the writ petitions, this Court is constrained to hold that these writ
petitions are not maintainable.
In the light of the above, these writ petitions stand dismissed as not maintainable. Accordingly, there can be no interim order in terms of the
Miscellaneous Petitions and they also stand dismissed. As indicated above, W.P. No. 34289 of 2006 stands dismissed with cost of Rs. 5000/-
(Rupees Five Thousand only) to be paid to the Tamil Nadu State Legal Aid Services Authority within a period of one month from the date of
receipt of a copy of this order.