Cheque dishonour complaints against company directors need only show a prima facie factual foundation; Vadodara jurisdiction upheld.

In cheque dishonour prosecutions against a company, a complaint need only lay a prima facie factual foundation showing the statutory ingredients; detailed proof of each director's role is not required at the threshold, and persons in charge of the company may be proceeded against under the deeming provision. Territorial jurisdiction may lie where a legally relevant part of the transaction occurred, including where goods were supplied and payment became due after notice. On these principles, the Gujarat HC rejected the challenge to the criminal process, upheld jurisdiction at Vadodara, and directed the trial to proceed.

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Issues: (i) Whether the complaints disclosed a prima facie case to proceed against the directors and officers of the company for offences under the Negotiable Instruments Act and the Indian Penal Code. (ii) Whether the Court at Vadodara had territorial jurisdiction and whether the proceedings were liable to be dropped at the threshold.

Issue (i): Whether the complaints disclosed a prima facie case to proceed against the directors and officers of the company for offences under the Negotiable Instruments Act and the Indian Penal Code.

Analysis: The complaints contained allegations that the company issued numerous cheques towards payment or security for goods supplied on credit, the cheques were dishonoured for insufficiency of funds, statutory notice was served, and payment was not made. At the stage of issuing process or considering quashing, the Court held that it was enough if the factual foundation of the offence was laid in the complaint. It was unnecessary to reproduce every ingredient verbatim, and detailed examination of the truth of the allegations or the internal role of individual directors was a matter for trial. In company cases, persons in charge of and responsible for the conduct of business can be proceeded against under the statutory deeming scheme, and allegations of consent, connivance, or neglect were not required to be proved at the threshold.

Conclusion: The complaints disclosed a prima facie case, and the proceedings against the directors and officers could not be quashed at the threshold.

Issue (ii): Whether the Court at Vadodara had territorial jurisdiction and whether the proceedings were liable to be dropped at the threshold.

Analysis: The Court applied the principle that jurisdiction in cheque dishonour matters may lie in any court where one of the constituent acts of the offence occurred. Since the goods were supplied at Vadodara and the amount became payable there after notice, the Vadodara Court had jurisdiction. The repeated attempts to stall the prosecution were treated as dilatory and an abuse of process, and the application to drop proceedings was found to be unsustainable.

Conclusion: The Vadodara Court had territorial jurisdiction, and the application to drop the proceedings was rightly rejected.

Final Conclusion: The challenge to the criminal process failed, the petitions were rejected, costs were imposed, and the trial was directed to proceed expeditiously.

Ratio Decidendi: In prosecutions for dishonour of cheques issued by a company, a complaint need only lay a prima facie factual foundation showing the statutory ingredients and need not plead or prove detailed role-specific allegations against each director at the threshold; territorial jurisdiction may be founded on any legally relevant part of the transaction or cause of action.

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