2015 (3) TMI 65 - SC - Indian Laws

Location of Cheque Presentation Not Sole Basis for Jurisdiction

The Supreme Court affirmed the High Court's decision that the presentation of a cheque in a specific location does not automatically confer jurisdiction ... Section 138 of the Negotiable Instruments Act - Presentation of cheque by the complainant at place of his choice are not sufficient to confer jurisdiction upon the courts where cheque presented - Held that:- The view taken by the Magistrate based as it is on the decision of this Court in Harman Electronics (P.) Ltd. [2008 (12) TMI 677 - SUPREME COURT OF INDIA] does not, in our opinion, call for any interference by this Court, in the light of the pronouncement of this Court in Dashrath Rupsingh Rathod [2014 (8) TMI 417 - SUPREME COURT], where this Court has examined the issue at some length and held that presentation of a cheque by the complainant at a place of his choice or issue of notice by him to the accused demanding payment of the cheque amount are not sufficient by themselves to confer jurisdiction upon the courts where such cheque was presented or notice issued. - Decided against the appellant. Issues:Jurisdiction of Courts based on the presentation of a cheque at a specific location under Section 138 of the Negotiable Instruments Act.Analysis:The Supreme Court addressed the issue arising from an order by the High Court of Kerala regarding the jurisdiction of Courts in entertaining complaints under Section 138 of the Negotiable Instruments Act. The High Court held that the presentation of a cheque by the complainant at a bank in Kerala did not confer jurisdiction upon the Courts in Kerala to try the accused persons for the offence. The cheque in question was issued by the respondent on a branch in Karnataka but was presented for collection in Kerala, where it was dishonored for insufficiency of funds. The complainant filed complaints in Kerala, which were returned by the Magistrate due to lack of territorial jurisdiction. The High Court, relying on a previous Supreme Court decision, held that mere presentation of the cheque in Kerala did not confer jurisdiction.In its analysis, the Supreme Court referenced the decision in Harman Electronics (P.) Ltd. v. National Panasonic India (P.) Ltd. where it was held that the issue of notice to the drawer of the cheque does not automatically confer jurisdiction on the Court. However, the Supreme Court referred to its own decision in Dashrath Rupsingh Rathod v. State of Maharashtra, where it was clarified that the presentation of a cheque at a chosen place by the complainant or the issuance of a notice demanding payment are not sufficient on their own to confer jurisdiction on the Courts. The Court affirmed the High Court's order based on the principles established in Dashrath Rupsingh Rathod's case.Consequently, the appeals before the Supreme Court failed, and they were dismissed without any specific orders as to costs. The judgment emphasized the importance of proper jurisdiction based on legal precedents and clarified that the mere act of presenting a cheque in a particular location does not automatically confer jurisdiction on the Courts in that area under Section 138 of the Negotiable Instruments Act.