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Ashish Singla 098140 76600 (Cheque Victim's Lawyer. LUDHIANA (PB))     27 August 2014

Jurisdiction.....

Hi friends...

Pl tell me what does it mean...

Territorial Jurisdiction in N.I.Act cases:
In landmark verdict on point of jurisdiction, Hon'ble Bombay High Court after considering recent Full Bench judgment of Supreme Court of Dashrath Singh Rathod held that if cheques issued by Accused are "AT PAR", complaints u/s. 138 of NI Act can be filed where its dishonoured under principles of At Par Banking. 
So an AT PAR Cheque issued frm bank of Gujarat, deposited in Mumbai - will get dishoured in Mumbai only and hence Mumbai Court will have Jurisdiction to try matter
Case Details - 
Writ Petition No. 2362 of 2014
Ramanbhai Mathurbhai Patel Vs Sharekhan Trading Ltd 
Quoram - HHJ Shri M. L. Tahaliyani



Learning

 18 Replies

Ankit Ahjolia (IR Officer)     27 August 2014

The Supreme Court ruled that the case of bounced cheque has to be initiated at the place where the branch of the bank on which the cheque was drawn is located. Means A draws a cheque on HDFC, Ahmedabad branch and deposited in Mumbai and dishonoured there only though case has to be initiated in Ahmedabad only... This judgement favours the culprit... Who intentionally issues cheque without having sufficient balance...

Ashish Singla 098140 76600 (Cheque Victim's Lawyer. LUDHIANA (PB))     27 August 2014

Ankit ji, 

What you are reffering, i know well being i had lost 35 cases with that ludgement. If you know some about what happened after that (Two days before) what you are mentioning, pl light up..

Thanks...

Ashok, Advocate (Lawyer at Delhi)     27 August 2014

This judgment is of 25.08.2014 but is still not available on the Bombay High Court website. One has to read it in detail before commenting.

Vinod (bbbbb)     28 August 2014

Dear Ashish & All

Pls share full judgement

Ashish Singla 098140 76600 (Cheque Victim's Lawyer. LUDHIANA (PB))     28 August 2014

I am also not able to find this citation, but this is displaying regular under such title of Bombay HC...

R Trivedi (advocate.dma@gmail.com)     28 August 2014

This was bound to happen !!

 

 

But Mumbai HC is at fault, it did not understand the logic behind Hon SC order. Hon SC has very clearly defined what "The Bank" meant in the provision.

 

 

Actually the bouncing does not take place in branch (old days before computerization cheque used to come to the drawee branch, now it is all scanned copy at the regional clearing center) and almost 90% cheques (leave aside some cooperative Bank or Rural Bank) are At Par.

 

 

So Hon SC detailed order of 01.08.2014 goes to a big spin, See the point is at par cheques are cleared at the payee location only by the drawee bank through CBS system, so technically it does not violate the SC order.

 

 

What it says, after keeping the file for few years, SC comes up with a detailed order, and this very order almost becomes nugatory due to prevalent banking practice. Can I say that SC was not aware of this at par or CBS business or should we presume that SC meant the branch address as stated on the cheque, yes thats what SC intent was, but how do you explain to Mumbai HC or many more HCs who will follow Mumbai HC very shortly.

 

 

Till SC once again comes to the rescue of  drawer. 

Rajiv Chauhan (Advocate) (Advocate (Shimla) 7833999000)     28 August 2014

Dear Friends,

Please find attachment of the Judgement 


Attached File : 938208173 territorial jurisdiction 138.docx downloaded: 341 times

Ashok, Advocate (Lawyer at Delhi)     30 August 2014

So, in respect of the multi-city cheques, which are payable at par in all branches of a bank, the Bombay High Court [in the recent case of Ramanbhai Mathurbhai Patel vs. State of Maharashtra, WP No. 2362 of 2014] says that such a cheque is actually dishonoured at the nearest branch where is presented for clearance by the banker of the payee. The relevant paragraphs of the High Court judgment is reproduced below:

 

“8. It is thus clear that in the present case by issuing cheques payable at all branches, the drawer of the cheques had given an option to the banker of payee to get the cheques cleared from the nearest available branch of bank of the drawer. It, therefore, follows that the cheques have been dishonoured within the territorial jurisdiction of Court of Metropolitan Magistrate at Kurla.  In view of judgment of Hon'ble Supreme Court in the matter of Dashrath v. State of Maharashtra cited (supra), the learned Metropolitan Magistrate of Kurla Court has jurisdiction to entertain and decide the complaint in question.”

 

 

In this case, the account of the accused was in Gandhi Nagar in Gujarat, whereas the payee had presented the (multi-city, at par) cheque in Kurla area of Mumbai. So, the High Court says that Kurla court has jurisdiction. So, the recent Supreme Court decision in the case of Dashrath v. State of Maharashtra has been mostly set at naught, since most of cheques nowadays are multi-city cheques!!!

Ashok, Advocate (Lawyer at Delhi)     30 August 2014

Please see the following article on TilakMarg website that explains the above Bombay High Court decision of 25.08.2014 in detail in respect of the multi-city cheques payable at par in all branches of the bank:

 

https://www.tilakmarg.com/2014/08/jurisdiction-in-case-of-cheque-bouncing.html

LEGAL-CIVIL CRIMINAL (SENIOR ADVUCATE. skjadvt@gmail.com)     31 August 2014

I have posted my comments on this blog.

karthik chowdary (ADVOCATE)     19 September 2014

I  just saw this and thought u will need this, so lets see what happens!!

Supreme Court stays Bombay High Court Jt which held that dis-honour of “AT PAR” Cheque cases can be filed to the Court within whose local jurisdiction the nearest available branch of bank of the drawer situated
A two Judge Bench of the Supreme Court has stayed the Bombay High Court Judgment which recently held that dis-honour of “AT PAR” Cheque cases can be filed to the Court within whose local jurisdiction the nearest available branch of bank of the drawer situated explaining the Apex Court Judgment in Dashrath Rupsingh Rathod vs. State of Maharashtra. Supreme Court has issued notice to the parties and granted an interim stay of four weeks. It was in Ramanbhai Mathurbhai Patel vs State of Maharashtra, Justice M.L.Tahalyani explained the dictum in Dashrath vs. State of Maharashtra in which a three Judge Bench of the Supreme Court held that dis-honour of Cheque cases can be filed only to the Court within whose local jurisdiction, the offence was Committed; ie, where the cheque is dishonoured by the bank on which it is drawn.

The Bombay High Court distinguished the application of the Supreme Court Judgement as follows;

“In the present case, the drawer had accounts at Gandhi Nagar branches of the two banks mentioned herein above and cheques have been dishonoured by the branches of the said two banks situated within the jurisdiction of Metropolitan Magistrate, Kurla. The question which arises for determination is as to whether the payee has to file complaint in the Court of Magistrate having jurisdiction over Gandhi Nagar branches or the branches which have dishonoured cheques. In this regard, one may refer to the judgment of Hon’ble Supreme Court in the matter of Dashrath v. State of Maharashtra cited (supra). While summing up the judgment, the Hon’ble Supreme Court has said at para 31 as under: 31 (vi) Once the cause of action accrues to the complainant, the jurisdiction of the Court to try the case will be determined by reference to the place where the cheque is dishonoured.

(vii) The general rule stipulated under Section 177 of Cr.P.C. applies to cases under Section 138 of the Negotiable Instruments Act. Prosecution in such cases can, therefore, be launched against the drawer of the cheque only before the Court within whose jurisdiction the dishonour takes place except in situations where the offence of dishonour of the cheque punishable under Section 138 is committed along with other offences in a single transaction within the meaning of Section 220(1) read with Section 184 of the Code of Criminal Procedure or is covered by the provisions of Section 182(1) read with Sections 184 and 220 thereof.”

“One may also refer to para 17 of the said judgment where the Hon’ble supreme Court has said as under:

“17. ….. In our discernment, it is also now manifest that traders and businessmen have become reckless and incautious in extending credit where they would heretofore have been extremely hesitant, solely because of the availability of redress by way of criminal proceedings. It is always open to the creditor to insist that the cheques in question be made payable at a place of the creditor’s convenience (emphasis supplied)”.

It is thus clear that in the present case by issuing cheques payable at all branches, the drawer of the cheques had given an option to the banker of payee to get the cheques cleared from the nearest available branch of bank of the drawer. It, therefore, follows that the cheques have been dishonoured within the territorial jurisdiction of Court of Metropolitan Magistrate at Kurla. In view of judgment of Hon’ble Supreme Court in the matter of Dashrath v. State of Maharashtra, the learned Metropolitan Magistrate of Kurla Court has jurisdiction to entertain and decide the complaint in question”.

 

Suri.Sravan Kumar (senior)     28 September 2014

Dear friends the Hon'ble Supreme Court did not discuss on Chqs Payable AT PAR.The appeal was filed in the year 2009 during that period AT PAR facility was not introduced by the banks. AT PAR faciilty was introduced in the year 2012 by RBI(if I am correct). Now the latest one is CTS chq. The chq will be scaned by the collecting bank and sends the data and captured images duly signed and encrypted to the central processing location or clearing house for onward transmission to the paying bank. With this facility the clearing has become fast and the minimum time for clearance is 1 day. Most of the courts will follow the Judgement of Supreme court only. Bombay High court judgement will bind only on the courts situated in Maharashtra state. The Judgement of Bombay High court is not binding on other state courts. The Supre Court catagorically stated in the Judgement in para 18 of the Judgement "The relief introduced by Sec 138 of NIAct is in addition to the contemplations in the IPC. It is still open to such payee recipient of a dishonoured chq to lodge a FIR with the police or file a Complaint directly before the concerned Magistrate. If the Payee succeeds in establishing that the inducement for accepting chq which subsequently bounced had occurred where he resides or ordinarily transacts business, he will not have to suffer the travails of journeying to the place where the chq has been dishonoured. ALL remedies under IC and CRPC are available to such a payee if he chooses to pursue this course of action rather than complaint under Sec 138 of NI Act and of course he can always file a suit for recovery where ever the cause of action arises dependent on his choosing..

So I think we can file case U/S 420 IPC instead of filing case U/S 138 of NIAct if it is out station chq.

ADVOCATE TRILOK (CRIMINAL family PROPERTY topfreind@gmail.com )     28 September 2014

First of all pl note that only SC judgment will prevail and not the Bombay HC.

 

More ever the Bombay HC citation has been stayed.

 

Even otherwise there are multiple remedies even without any Judgment in CRPC  to resist out of jurisdiction cases for cheque bounce.

 

Finer point of law for AT PAR CONCEPT also is that the cheque is payable at par but it will be bounced only at drawee bank branch..


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