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2016 DIGILAW 2960 (ALL)

ANKUSH JAIN v. STATE OF U. P.

2016-08-29

VIJAY LAKSHMI

body2016
Hon'ble Mrs. Vijay Lakshmi,J. The applicant, who is the same person in both the aforesaid applications filed under Section 482 Cr.P.C., has invoked the inherent jurisdiction of this Court with prayer to quash the criminal complaint dated 4.2.1015 as well as entire proceedings of Complaint Case No. 196 of 2016 (initially numbered as Complaint Case No. 162 of 2015) and Complaint Case No. 195 of 2016 (initially numbered as Complaint Case No. 163 of 2015) A.N. Polymers Pvt. Ltd. Vs. Ankush Jain, under Sections 138 of N.I. Act, P.S. Shahibabad, district Ghaziabad, pending in the court of Additional Civil Judge (J.D.)/ J.M. Court No. 3, Ghaziabad. Prayer has also been made to quash the summoning order dated 25.4.2015 issued against the applicant by the aforesaid court in both the complaint cases. As the applicant, the opposite parties and the issue involved in both the applications, are the same, both these applications are being disposed of by this common order. Heard learned counsel for the applicant and learned A.G.A. for the State. Perused the records. The brief facts of the case are that the complainant of both the complaint cases, who is O.P. No. 2 in both these applications, is a Private Limited Company, registered under the Indian Companies Act. The aforesaid Company filed criminal complaints against the accused- applicant with the allegations that the complainant company was doing business with the accused- applicant since 2011. During the course of business transactions, the accused- applicant, issued two cheque nos. 000010 and 000011 each dated 31.12.2014 and each amounting to Rs. 35 lacs, in the name of the complainant Company payable at Bank of Baroda, Branch Shalimar Garden, Ghaziabad. Both the said cheques were deposited in Punjab and Sindh Bank, Narayana, New Delhi, where the complainant Company was maintaining its account. However, both the cheques were dishonoured by the Banker of the accused- applicant and consequently the Banker of the complainant Company returned both the cheques with the endorsement "exceeds arrangement" along with Bank memo dated 1.1.2015. Thereafter the complainant Company, being payee of the dishonoured cheques, gave legal notices to the accused applicant on 13.1.2015. But, the accused applicant, instead of making payment of the amounts of the cheques in question within the stipulated period mentioned in the legal demand notices, replied to the said notices by his letter dated 22.1.2015, denying the payment to the complainant. But, the accused applicant, instead of making payment of the amounts of the cheques in question within the stipulated period mentioned in the legal demand notices, replied to the said notices by his letter dated 22.1.2015, denying the payment to the complainant. Since the accused applicant, despite service of demand notices, failed to make payment of the amount mentioned in the cheques in question, the complainant Company filed the aforementioned complaints against the applicant in the court of the Judicial Magistrate. In support of the complaint, the complainant Company/ O.P. No. 2, filed some documents and affidavit of the Director of the Company as its statement under section 200 Cr.P.C. and it was entitled to do so by virtue of section 145 of the N.I. Act. The learned Magistrate on the basis of the aforesaid affidavit and the documents filed by the complainant Company in support of its allegations, summoned the applicant for the offences punishable under section 138 of the N.I. Act vide impugned order dated 25.4.2015. The legality and correctness of the aforesaid summoning orders passed by learned Magistrate, Ghaziabad, has been challenged by learned counsel for the accused-applicant, in both these applications, mainly on the ground that in view of the amendment of section 142 of the N.I. Act, which has come into force w.e.f. 15.6.2015 and is having retrospective effect, the learned Magistrate at Ghaziabad, has no jurisdiction to entertain the complaints instituted by the complainant Company and to proceed against the accused- applicant on the said complaint. Learned counsel for the applicant has contended that in view of amended section 142(2) of the Act, learned Magistrate at Ghaziabad is not the competent court having jurisdiction to take cognizance and to issue process against the accused applicant and the entire proceedings pending before the court at Ghaziabad, which are wholly without jurisdiction, cannot be permitted to continue, as the same would amount to gross abuse of process of court and law and the same are liable to be quashed by this court on the ground of jurisdiction alone. Some factual aspects of the case have also been contested by learned counsel for the applicant submitting that both the cheques, which are dated 31.12.2014, drawn at Bank of Baroda, Branch Shalimar Garden, Ghaziabad, each amount of Rs. Some factual aspects of the case have also been contested by learned counsel for the applicant submitting that both the cheques, which are dated 31.12.2014, drawn at Bank of Baroda, Branch Shalimar Garden, Ghaziabad, each amount of Rs. 35 lacs, were the security cheques given by the accused- applicant to O.P. No. 2 earlier and none of these cheques was issued in discharge of any liability or debt. The complainant Company misused the aforesaid security cheques to initiate malicious proceedings against the applicant, only for the purpose of harassment and to extort money from him. It is also submitted that the applicant had made a detailed complaint to the complainant Company earlier that the material supplied by it was defective due to which the material was lying in their godown, whereupon the Director of the complainant Company had assured that the said defective material will be taken back shortly from the godown of the applicant but despite repeated requests, the defective material was not removed by the complainant Company from the godown of the applicant and subsequently the applicant gave a legal notice to the complainant Company, informing the complainant Company, not to present the security cheques to the Banker of the Company because the applicant had stopped the payment of said security cheques. However, despite the aforesaid legal notice the complainant Company misused those cheques. Learned counsel for the applicant has submitted that considering all these facts and since the proceedings of the aforesaid complaints are beyond territorial jurisdiction and against the mandates of the amended section 142(2) of the N.I. Act, the court of learned Magistrate at Ghaziabad has acted without jurisdiction and thus the impugned summoning orders as well as entire proceedings of the complaint cases are liable to be quashed. In support of his contention the learned counsel for the applicant has placed reliance on the law laid down by the Hon'ble Apex Court Bridgestone India Pvt. Ltd. Vs. In support of his contention the learned counsel for the applicant has placed reliance on the law laid down by the Hon'ble Apex Court Bridgestone India Pvt. Ltd. Vs. Inderpal Singh (2016) 2 SCC 75 , in which Hon'ble Apex Court has held as under: "A perusal of the amended Section 142 (2), extracted above, leaves no room for any doubt, specially in view of the Explanation thereunder, that with reference to an offence under Section 138 of the Negotiable Instruments Act, 1881, the place where a cheque is delivered for collection i.e. the branch of the bank of the payee or holder in due course, would be determinative of the place of territorial jurisdiction and the provisions of Code of Criminal Procedure, 1973, would have to give way to the provisions of instant enactment on account of the non obstante clause in subsection (1) of section 142-A of the N.I. Act." The learned counsel has submitted that in similar matters coordinate Bench of this court has stayed the further proceedings of the complaint case under section 138 of the N.I. Act, keeping in view the aforesaid judgment of the Hon'ble Apex Court and the amended provisions of the N.I. Act. Considered the submissions and carefully perused the judgment rendered by the Apex Court in the case of Bridgestone India Pvt. Ltd. (supra) and also the Gazette of India dated 15.6.2015 issued by the Ministry of Law and Justice, New Delhi, to amend the N.I. Act 1881. In order to properly appreciate the controversy involved in the instant case, the relevant provisions of the amended section 142(2) of the N.I. Act are reproduced below:- "142(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 cheque 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.". The aforesaid amendment in N.I. Act was brought in view of the pendency of an estimated 18 lakh cheque bounce cases across the country. The litigants, who were already deprived of their money by the borrower, have to travel to different places from where the cheques were issued and dishonoured, thus denying them justice, equity and fair trial, adding more insult to their injury. Earlier, Hon'ble Supreme Court in its judgment in the case of Dashrath Rupsingh Rathod Vs. State of Maharashtra (2014) 9 SCC 129 had held that the jurisdiction for dishonour of cheques is restricted to the court within whose local jurisdiction, the offence was committed i.e. where the cheque is dishonoured by the Bank on which it is drawn. Pursuant to the said judgment of the Apex Court, a number of pending cases under section 138 of N.I. Act were transferred to the courts having jurisdiction as per the said judgment. Various representations were made to the Government by Industry Association and financial institutions, expressing their concerns about wide impact of the said judgment on the business interest since the same would offer undue protection to defaulters at the expense of complainants. Hence the Legislature, with a view to protect the interest of the creditors, passed the Amending Act, which clearly provides that except bearer cheques, which are presented to the branch of the drawee bank, (in which cases, the local court of drawee bank would get jurisdiction), the jurisdiction to try the offence of cheque bouncing, shall lie with the court within whose local jurisdiction the bank branch of the payee, where the payee delivers the cheque for payment through his account, is situated. Thus, in view of the amendment in the N.I. Act, there is no doubt that the jurisdiction to try the instant case vests in the Court situated at Delhi where the O.P. No. 2 or the complainant Company, who is the payee or holder in due course, maintains its account. Thus, in view of the amendment in the N.I. Act, there is no doubt that the jurisdiction to try the instant case vests in the Court situated at Delhi where the O.P. No. 2 or the complainant Company, who is the payee or holder in due course, maintains its account. Now the question, which arise for consideration is that whether both these complaints and the entire proceeding are liable to be quashed on account of lack of jurisdiction as prayed by the applicant? The answer would obviously be "No". Keeping in view of the intention of the Legislature behind passing of the Amending Act, which is to protect the interest of the creditor or the payee and not of the borrower, and the provisions of Amending Act, the proceedings of complaint cannot be quashed. If the proceedings are quashed only due to lack of territorial jurisdiction or even are stayed for sometime, calling for counter and rejoinder affidavits, it will cause great difficulty to the litigant, who is already facing problem, being deprived of his money due to bouncing of cheque drawn by the borrower. To deal with such situation, the Legislature by the Amending Act of 2015 has inserted a new section 142-A in Negotiable Instrument Act, making provision for transfer of pending cases. The newly inserted section 142-A provides that all cases pending before any court, whether filed before it or transferred to it before 15.6.2015, shall be transferred to the courts having jurisdiction. In the present case, a perusal of the complaint, the copy whereof has been annexed in both the applications and copy of order sheet of the court proceedings, which is Annexure no. 5 in both the applications, shows that the complaint under the N.I. Act has been filed on 5.2.2015, meaning thereby that the complaint was pending on the date 15.6.2015 when the Amending Act came into force. Therefore, the proceedings pending at Ghaziabad, deserves to be transferred from Ghaziabad to Delhi where the complainant Company is maintaining its account and no ground to quash those proceedings is made out. In view of the above, both the instant applications are dismissed. As this court cannot order for inter State transfer, the jurisdiction being only with the Hon'ble Apex Court by virtue of section 406 Cr.P.C., it is open for the complainant/ O.P. No. 2 to take steps for transfer of his complaint to Delhi. In view of the above, both the instant applications are dismissed. As this court cannot order for inter State transfer, the jurisdiction being only with the Hon'ble Apex Court by virtue of section 406 Cr.P.C., it is open for the complainant/ O.P. No. 2 to take steps for transfer of his complaint to Delhi. The office is directed to send a copy of this order to the concerned Magistrate at Ghaziabad, through the District Judge, Ghaziabad. The concerned Magistrate is further directed to inform the complainant about this order so that the complainant may take necessary steps for transfer of his complaints to Delhi.