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Gauhati High Court · body

2018 DIGILAW 1085 (GAU)

Premier Roller Flour Mills v. ICICI Bank Ltd.

2018-07-24

PRASANTA KUMAR DEKA

body2018
JUDGMENT & ORDER : 1. Heard Mr. RL Yadav, learned counsel appearing on behalf of the petitioners and Mr. R De, learned counsel appearing on behalf of the respondents. 2. The present petitioner is a partnership firm having its office and place of business at Haibargaon 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 where after 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. 3. On 19.03.2008 during the course of verification of stocks it was found that only 6135 bags of wheat was available in the go down of the respondent Bank out of 44,755 bags of wheat. Divn.), Nagaon for a direction that the loan amount is not a non-performing asset. 3. On 19.03.2008 during the course of verification of stocks it was found that only 6135 bags of wheat was available in the go down 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.” 4. 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.” 4. Vide order dated 19.12.2017 passed by this court, learned counsel for the petitioners giving 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. 5. Before taking note of the submission of the learned counsel for the petitioner, it would be 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 Dishonors 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. 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. 6. Mr. Yadav disputes the jurisdiction of the Kolkata court as from the plain reading of the complaint 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. 7. Mr. Yadav further submits that the respondent Bank by making concocted story filed the complaint petition and that too, within the jurisdiction of the Kolkata court under whom no cause of action or any part thereof has arisen. 7. Mr. Yadav further submits that the respondent Bank by making concocted story filed the 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. 8. Mr. De, on the other hand, submits that the offence under Section 138 of the Act can be 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. 9. Confining and considering the submission of the learned counsel appearing for the parties 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. 10. It is worth mentioning that the Negotiable Instruments Act, 1881 was amended vide the Amendment Act, 2015. 10. It is worth mentioning that the Negotiable Instruments Act, 1881 was amended vide the Amendment Act, 2015. The pre-amended Section 142 of the Act is reproduced herein below:- “142. Cognizance of offences.–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.” 11. 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. 12. 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. 12. 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. 13. Then comes the Negotiable Instruments (Amendment) Act, 2015 on the basis of which amendment was affected in Section 142 of the Act along with the introduction of Section 142-A of which the relevant portion is reproduced herein below along with the amended Section 142 of the Act:- “142. Cognizance of offences.–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.” “142-A. Validation for transfer of pending cases.–(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. ......” 14. 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. 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. ........ 12. 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. 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.” 15. In view of the said subsequent event of amendment, the complaint petition filed by the respondent 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. 16. Interim order passed earlier stands vacated.