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2022 DIGILAW 74 (MEG)

Emilasha Laloo v. Nishan Skhem Blah

2022-04-05

W.DIENGDOH

body2022
JUDGMENT 1. The respondent has filed a complaint under section 138 of the Negotiable Instruments Act, 1881 before the Court of the Additional Deputy Commissioner (Judicial), Shillong for dishonour of a cheque dated 15.12.2017 to the tune of Rs. 11,30,000/- (Rupees eleven lakhs thirty thousand) only, allegedly issued by the petitioner herein to the respondent. The said cheque was drawn on the United Bank of India, Nongthymmai Branch. However, upon presentation of the same at the Meghalaya Cooperative Apex Bank, Shillong Branch by the payee, it was returned to the drawer due to insufficient fund. The said case was registered and numbered as C.R. Case No.1 (T) 2018. 2. On being endorsed, the learned Judicial Magistrate First Class, Shillong took cognizance of the complaint and vide order dated 05.03.2018, issued summons to the petitioner/accused. 3. The petitioner being aggrieved and dissatisfied with the said order dated 05.03.2018, has accordingly approached this Court with a petition under Section 482 Cr.P.C with a prayer to quash the said proceedings, inter alia, on the ground that there is a bar of the liability/debt being legally enforceable and also on the ground of territorial jurisdictional bar. 4. The respondent on receipt of notice has accordingly entered appearance and has contested the assertion of the petitioner herein. 5. Heard Mr. K.C. Gautam, learned counsel for the petitioner who has submitted that only two grounds of argument will be urged before this Court, the first being that the complaint filed by the respondent in the Court of the Additional Deputy Commissioner(Judicial), Shillong which was endorsed to one of the Magistrates, is time barred (though this issue was not pressed in these proceedings in due course) and secondly, that the ground of maintainability of the proceedings before the Trial Court is questioned as the Court which took cognizance of the said complaint lacks territorial jurisdiction, which fact was also admitted by the learned counsel for the respondent at the hearing. 6. Mr. Gautam, has submitted that the petitioner/payee is maintaining a bank account with the Meghalaya Co-Operative Apex Bank, Shillong Branch which is located in Normal Shillong (European Ward) and within the jurisdiction of the Chief Judicial Magistrate. 7. 6. Mr. Gautam, has submitted that the petitioner/payee is maintaining a bank account with the Meghalaya Co-Operative Apex Bank, Shillong Branch which is located in Normal Shillong (European Ward) and within the jurisdiction of the Chief Judicial Magistrate. 7. It is also submitted that the respondent as the complainant has filed the complaint case under Section 138 of the Negotiable Instruments Act before the Court of the Additional Deputy Commissioner (Judicial), whose jurisdiction covers the areas outside Normal Shillong. The petitioner as stated, is operating a bank account with the Meghalaya Co-Operative Apex Bank, Shillong Branch which is located within Normal Shillong and as such, the complaint was presented before a Court which lacks territorial jurisdiction as the Chief Judicial Magistrate exercises jurisdiction over the said area and by the said act of the petitioner in preferring the complaint before a Court lacking territorial jurisdiction, the complaint is not maintainable because of want of jurisdiction. 8. Referring to the provision of sub-Section 2 of Section 142 of the Negotiable Instruments (NI) Act, Mr. Gautam has submitted that this provision provides that only a court which has territorial jurisdiction over the area where the bank is situated, which bank the payee or holder maintains an account, can try an offence under Section 138 of the NI Act, 1881. 9. This provision was inserted by way of an amendment to the Negotiable Instruments Act vide the Amendment Act of 2015, which came into effect from 15.06.2015, primarily to ward off the difficulties created by the judgment of a three Judge Bench in the case of Dashrath Rupsingh Rathod v. State of Maharashtra & Anr: AIR 2014, SC 3519, wherein the Hon'ble Supreme Court has held that the territorial jurisdiction for dishonor of cheques is restricted to the court within whose local jurisdiction the offence was committed, which in the present context is where the cheque is dishonored by the bank on which it is drawn. The fact that this judgment has been legislatively overruled by Section 142 (2) of the NI Act was noticed by the Hon'ble Supreme Court in the case of P. Mohanraj & Ors v. Shah Brothers Ispat Pvt. Ltd: (2021) 6 SCC, 325 at paragraph 61 of the same, submits Mr. Gautam. 10. Finally, Mr. The fact that this judgment has been legislatively overruled by Section 142 (2) of the NI Act was noticed by the Hon'ble Supreme Court in the case of P. Mohanraj & Ors v. Shah Brothers Ispat Pvt. Ltd: (2021) 6 SCC, 325 at paragraph 61 of the same, submits Mr. Gautam. 10. Finally, Mr. Gautam has submitted that in view of the fact that the said complaint was filed by the respondent/complainant before a court having no territorial jurisdiction, any order passed by such court is a nullity and void ab initio as was held in the case of Balvant N. Vishwamitra & Ors v. Yadav Sadashiv Mule (Dead) through Lrs & Ors: (2004) 8 SCC 706 and as such, this petition may be allowed and the proceedings in C.R. Case No 1(T) of 2018 before the Court of the Judicial Magistrate, First Class, Shillong be quashed. 11. Per contra, Mr. N.M. Mansuri, learned counsel for the respondent has chosen to oppose the contention made by the learned counsel for the petitioner on the two grounds urged before this court, that is, on the issue of the complaint filed before the court below being time barred and secondly, on the ground of jurisdiction. 12. It is submitted that though the petitioner had not press on the ground of the said complaint being time barred, however Mr. Mansuri has submitted that the factum of the dispute between the parties emanated from an Agreement executed between them, wherein the petitioner has made a promise to repay the amount availed as loan to the respondent, which Agreement takes the effects of a contract being governed by Section 25(3) of the Indian Contract Act. It is further submitted that promise under Clause 3 of Section 25 of the Indian Contract Act, even if, made after the expiry of the period of limitation, would be applicable and enforceable notwithstanding the limitation. 13. In support of the above contention, the learned counsel has cited the following judgments: - (i) Sri Kapaleeswarar Temple, Mylapore v. T. Tirunavukarasu: AIR (1975) Madras 164, paragraphs 5 & 6. (ii) State Bank of India v. Kanahiya Lal & Anr: Order dated 02.05.2016 passed by the Hon'ble Delhi High Court in RSA 248/2015, paragraph 24. (iii) Mr. Dinesh B. Chokshi v. Rahul Vasudeo Bhatt: Order dated 19.10.2012, in Criminal Application No. 2933-2936 of 2007, paragraphs 2, 15 & 21. 14. (ii) State Bank of India v. Kanahiya Lal & Anr: Order dated 02.05.2016 passed by the Hon'ble Delhi High Court in RSA 248/2015, paragraph 24. (iii) Mr. Dinesh B. Chokshi v. Rahul Vasudeo Bhatt: Order dated 19.10.2012, in Criminal Application No. 2933-2936 of 2007, paragraphs 2, 15 & 21. 14. On the issue of jurisdiction, the learned counsel has submitted that the Judicial Magistrate First Class, Shillong is vested with the jurisdiction to try cases arising both in the Normal Shillong areas as well as Tribal Shillong areas, the only difference is of the endorsing authorities, cases arising from the Normal Shillong areas should be addressed to the Court of the Chief Judicial Magistrate, Shillong and cases arising in the Tribal Shillong areas should be addressed to the Court of the Additional Deputy Commissioner (Judicial), Shillong. It is however admitted that the complaint filed by the respondent is pending before one such court which has the jurisdiction to try the case, but lacks territorial jurisdiction on the ground that the complaint has been addressed to a wrong court for endorsement. 15. Mr. Mansuri has however submitted that the ratio of the authority rendered in the case of Dashrath Rupsingh Rathod (supra) particularly at paragraph 20 of the same would be applicable in the case of the respondent, inasmuch as, it has been held that the fate of cases pending in the court which lacks jurisdiction are divided into two categories, the first category being the cases were only summons has been issued and received by the accused person and in such cases, the complaint has to be returned to the complainant to be filed before the proper court and the second category is where evidence has started, such case shall continue in the same court and it shall be deemed to be transferred from the court ordinarily possessing territorial jurisdiction. In this context, the case of the respondent falls within the second category since evidence has already been led. 16. Mr. Mansuri has admitted that the reliance and reference of the learned counsel for the petitioner in the case of P. Mohanraj (supra) is correct to the extent concerning the place of jurisdiction, however it is submitted that only the portions of the judgment at paragraphs 14, 15 and 16 of the Dashrath Rupsingh Rathod case has been overruled and not the entire judgment. 17. To support his contention, Mr. 17. To support his contention, Mr. Mansuri has referred to the case of Surendra Banjara v. State of UP & Anr: (2018) ACD 1071 at paragraph 20, wherein reference was made to the ratio in the case of Dashrath Rupsingh Rathod. Another case cited is the case of M/s Jeet Radiators and Meter Works and Anr. v. M/s Namdhari Traders and Anr, wherein under the facts and circumstances of the case, the Hon'ble Punjab and Haryana High Court has maintained the ratio of law laid down by the Apex Court in paragraph 20 of Dashrath Rupsingh Rathod case as well as the Negotiable Instruments (Amendment) Ordinance, 2015 and has submitted that the judgment in the said cases referred to above, have been passed after the amendment of the Negotiable Instruments Act came into existence. 18. Mr. Mansuri has finally submitted that should this Court finds that the ratio laid down in paragraph 20 of the Dashrath Rupsingh Rathod case cannot be applied to the case in hand, the respondent/complainant in the interest of justice may not be thrown out remediless for the fault of the counsel and that the respondent may be allowed to withdraw the complaint and file it before the competent court of jurisdiction. 19. On consideration of the submissions and contentions of the parties, what can be understood is that the petitioner has presented a two-fold attack against the proceedings pending in the Court of the learned Judicial Magistrate First Class, Shillong, as noticed above, the first being a plea that the alleged debt sought to be enforced by the respondent is time barred and hence is not legally enforceable. Reference is made to the debt which is said to have been incurred in the year 2009 and therefore, by the year 2012 the same has become time barred by operation of the law of limitation. 20. The respondent has chosen to contradict this proposition by submitting that the said debt was a result of an agreement executed between the parties, which agreement takes the effect of a contract and hence, under the provision of Clause 3 of Section 25(3) of the Indian Contract Act, even after the expiry of the period of limitation, the claim could be revived. The respondent has cited about three judgments (noted above), on this point. 21. The respondent has cited about three judgments (noted above), on this point. 21. This Court however, would not be called upon to decide on this point since at the hearing, the learned counsel for the petitioner has decided not to press on the issue of the debt being time barred. 22. What remains to be decided is the controversy between the parties on the issue of jurisdiction of the court for proceedings initiated on a complaint under Section 138 of the Negotiable Instruments Act, 1881. The said Section provides as follows: - '138. Dishonour of cheque for insufficiency, etc., of funds in the account.- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation. Explanation. - For the purposes of this section, 'debt or other liability' means a legally enforceable debt or other liability.' 23. Section 142 of the said NI Act, speaks of cognizance of offences, the relevant provision to be considered in these proceedings is Section 142 (2) which reads as follows: - '142. Cognizance of offences. - (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.' 24. When it comes to assuming of jurisdiction, in the case of Dashrath Rupsingh Rathod at paragraph 20, the Hon'ble Supreme Court has held as under:- '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. 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 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.' 25. However, the dictum of the Hon'ble Supreme Court in the said Dashrath Rupsingh Rathod case has been legislatively overruled by an amendment to the Negotiable Instruments Act, 1881 vide Amendment Act 26 of 2015 (effective from 15.06.2015) wherein, Section 142 in the principal Act has been re-numbered as Sub-section (1) and following this Sub-section (2) has been inserted as indicated in paragraph 23 (supra). 26. The law as it stands today as regard jurisdiction is that, trial of a case under Section 138 of the Act shall only be by a court within whose local jurisdiction a 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. 27. As admitted by the respondent herein, the complaint was filed before a court lacking territorial jurisdiction and as such, there is no option for this Court, but to conclude that the Trial Court cannot proceed with the complaint against the petitioner herein. 27. As admitted by the respondent herein, the complaint was filed before a court lacking territorial jurisdiction and as such, there is no option for this Court, but to conclude that the Trial Court cannot proceed with the complaint against the petitioner herein. The cited cases referred by the learned counsel for the respondent would have no persuasive value before this Court as the provisions of the statute stares in the face of the matter in issue before this Court and as such, with due respect, the same cannot be taken into account in these proceedings. The consequential result is that the proceedings therein has to be set aside. 28. Accordingly, this petition is allowed, the proceedings in C.R. Case No. 1(T) of 2018 between the parties herein pending before the Court of the learned Judicial Magistrate First Class, Shillong is hereby set aside and quashed. 29. Before parting with this case, it is to be noticed that if the respondent does have a genuine case to proceed against the petitioner herein, he may pursue the matter before a proper forum in accordance with law. 30. With the above, this matter is disposed of. No cost.