Shrinkar (Consultant) 09 November 2014

420 cases

Following is situation.

Manufacturing company issued non convertible pref shares. Company issues cheques towards maturity which gets bounced due to insufficient funds. The investors to whom cheques were issued did not return origanal share certificates for redumption. Some investors filed 138 cases & some filed 420 cases also. Cheques were issued to investors in different state

My question is

1. Can 420 cases be quashed basis that investors did not return the origanal share certificate , took cheques , deposited in bank which got bounced. But origanal share certificate is still with investors. Is is cheating by investors?

2. Can the jurisdiction of 420 cases be challged as the company is located/registered in different state & also cheques were issued from different state.

Regards,

Shrinkar

Reply Follow

3 Replies

Sudhir Kumar, Advocate (Advocate) 10 November 2014

criminal jurisdiction lies in the place where the victim felt the dent of crime, or where crime was committed. since the accused was cheated at the palce where he was he filed case there.

victim of cheating is not bound to return the subject matter/security to the accused.

Shrinkar (Consultant) 10 November 2014

Dear Sir,

Thanks for your reply.

Can you also help in throwing light on following issue.

Investor took a cheque towards the disbursment of pref shares. Is it not pre requisite that investor shall return the pref share certificate to company for disbursment. In the above case investor has both origanal of pref share as well as bounced cheque. Like in bank FD depositor has to sign on FD & return it to bank & then only bank returns the money.

Please advise

Best Regards,

Shrinkar

T. Kalaiselvan, Advocate (Advocate) 15 November 2014

The company before issuing the maturity cheques should have collected the preferential shares from the investors or observed the requisite formalities in this regard, so whose fault is it to not to collect back the share certificates? Whatsoever, if the company failed to redeem the share value to the investors, they are liable to do it or face the music of law. A criminal complaint, as rightly stated by expert Mr. Sudhir Kumar, can be filed within the jurisdiction of the complainant who has been aggrieved, it is very well within the legal ambit. A case u/s 420 IPC and along with section 138 NI act can be filed within the complainant's jurisdiction, if only cheque bounce case has to be filed, it will be within the jurisdiction of the drawer of the cheque.