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of <h1>Court affirms jurisdiction under Section 138, upholds director impleading, emphasizes debt discharge presumption.</h1> The court dismissed the petition, affirming Delhi courts' jurisdiction under Section 138 of the Negotiable Instruments Act. It upheld the impleading of ... - Issues involved: The jurisdiction of the court in Delhi to entertain a complaint under Section 138 of the Negotiable Instruments Act, the impleading of all directors of a company in a complaint, and the maintainability of proceedings under Section 138 of the N.I. Act based on a dishonored cheque given as collateral security.Jurisdiction Issue: The petitioners argued that the transaction took place in Mumbai, and therefore, Delhi courts lacked territorial jurisdiction. However, the court held that since various acts constituting the offense occurred in Delhi, including presentation of the cheque, its dishonor, and notice to the petitioners, part of the cause of action arose in Delhi, granting jurisdiction to the Delhi courts as per Section 178(d) of the Cr.P.C.Impleading of Directors: The petitioners contended that not all directors of the company should be accused as they had no control over the company's operations. The court noted that the complaint alleged the involvement of accused directors in the day-to-day business and that the onus to prove otherwise lies on the accused as per Section 141 of the N.I. Act, thus rejecting the contention.Cheque as Collateral Security: The petitioners argued that the dishonored cheque was given as collateral and not for discharge of any debt, making proceedings under Section 138 of the N.I. Act invalid. However, the court cited Section 139 of the N.I. Act, which presumes that a cheque is for discharge of debt unless proven otherwise. Relying on Supreme Court precedents, the court rejected this argument, emphasizing that the burden of proof lies on the accused, and such issues should be addressed during trial.Conclusion: The court dismissed the petition, affirming the jurisdiction of Delhi courts, the validity of impleading all directors, and the presumption that a dishonored cheque is for discharge of debt. The trial court was directed to expedite the trial proceedings.
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