2018 (3) TMI 1959 - HC - Indian Laws

Court Upholds Decision on Complaint, Remands for Further Proceedings

The court upheld the revisional court's decision on the complaint's maintainability and remanded for further proceedings. It directed the trial court to ... Dishonor of Cheque - time limitation - jurisdiction of the court where the proceedings under Section 138 N.I. Act could be initiated - legal notice was not given to the revisionist- accused within thirty days of receiving information about dishonour of cheques. Jurisdiction - section 142 of NI Act - HELD THAT:- Clause (2) of the Section 142 of NI Act clearly states that if the cheque is delivered for collection through an account, the branch of the bank, where the payee or holder in due course, as the case may be, maintains account, is situated or if the cheque is presented for payment by the payee or holder in due course otherwise through an account, the branch of the drawee bank, where the drawer maintains the amount is situated. The above provision has been brought about in the enactment through an Amendment on 15.6.2015. In the case at hand, three cheques, which are alleged to have been dishonoured, are of the year 2014 which according to the complainant/opposite party No. 2, were dishonoured on 23.8.2014 but it's information was received by the opposite party No. 2 on 20.9.2014, therefore, it is apparent that the occurrence in this case is of the period prior to the said Amendment in the N.I. Act, but it would be pertinent to mention here that in DASHRATH RUPSINGH RATHOD VERSUS STATE OF MAHARASHTRA & ANOTHER [2014 (8) TMI 417 - SUPREME COURT], the matter of jurisdiction was considered at length in the matters related to Section 138 N.I. Act. Thus, the position of law is absolutely clear that even in pending cases, the jurisdiction of filing a complaint under Section 138 of N.I. Act would lie at a place where drawee bank is situated, where the drawer maintains his account and from where it was reported that there was no sufficient amount in the account of drawer and accordingly, the cheques got dishonoured - From the perusal of cheques, it is apparent that they were presented by the opposite party No. 2-complainant in Aligarh, but in view of above position of law, it is immaterial where these cheques were presented for being encashed. Since these cheques were drawn on the ICICI bank situated in New Delhi, where the drawer or the account holder i.e. the revisionist- accused was having his account and these cheques got dishonoured because of there being insufficient amount in the said account at Delhi, the drawee bank would be treated to be located in Delhi and not at Aligarh, therefore, in view of above position of law, the jurisdiction of this case would lie at Delhi and not at Aligarh. This point seems to have escaped the attention of both the courts below. In this case the proper course would be for the courts below to return the complaint to the presenter of the same to be presented before the court having jurisdiction, but this course has not been adopted by the courts below which is found erroneous. Whether the case was hit by proviso to Section 138 (b) N.I. Act? - HELD THAT:- It is apparent from the above provision that the period for issuing notice by payee or holder in due course is thirty days from the date of receipt of information by him from the bank regarding return of the cheque as unpaid. The question is, therefore, that in the case at hand, when the information was received by the payee/holder in due course opposite party No. 2-complainant - In the case at hand, the notice has been issued on 1.10.2014, therefore, the said notice would not entail any infirmity and would be held to have been issued within thirty days. In the case at hand, the opposite party No. 2- complainant had clearly stated on oath that information could be received by him about the cheque having been dishonoured/bounced on 20.9.2014. In case there was any controversy with regard to the said fact, the parties could have led evidence on this point before the court below during the trial. Therefore, the finding in this regard by the learned revisional court below cannot be held to be wrong that since the opposite party No. 2- complainant had stated on oath about the knowledge of cheques having been bounced to have occurred to him on 20.9.2014, the same could not have been dis-believed by the Magistrate's court outright to reject the complaint. This court's view is in consonance with the view expressed by learned revisional court below and finds that this was a matter which could have been decided only after taking evidence from both the sides during trial. The judgment and order dated 16.10.2015 of the revisional court is upheld as regards maintainability of the complaint and for remand of the matter to the court below for proceeding with the complaint in accordance with law. To that extent this revision is rejected. Issues Involved:1. Jurisdiction of the court under Section 138 of the Negotiable Instruments Act (NI Act).2. Timeliness of the legal notice issued under Section 138(b) of the NI Act.3. Validity of cheques with a printed limit of Rs. 50,000 but issued for higher amounts.Issue-wise Detailed Analysis:1. Jurisdiction of the Court under Section 138 of the NI Act:The court examined the jurisdictional aspect under Section 142 of the NI Act, which was amended on 15.06.2015. The cheques in question were dishonored in 2014, thus the pre-amendment law applied. According to the law established in *Dashrath Rupsingh Rathod v. State of Maharashtra*, the jurisdiction lies where the drawee bank is situated, i.e., where the drawer maintains the account. In this case, the cheques were drawn on ICICI Bank, New Delhi, thus the jurisdiction should be in New Delhi, not Aligarh. The court found that both lower courts erred by not returning the complaint to be filed in the proper jurisdiction.2. Timeliness of the Legal Notice Issued under Section 138(b) of the NI Act:Section 138(b) mandates that the payee must issue a notice within 30 days of receiving information about the dishonor of the cheque. The complainant claimed to have received the dishonor information on 20.09.2014 and issued the notice on 01.10.2014, which was within the stipulated 30 days. The court referenced *Kamlesh Kumar v. State of Bihar* to emphasize that the date of information receipt is crucial. The revisional court accepted the complainant's affidavit stating the receipt date as 20.09.2014, thus the notice was deemed timely. The court agreed with the revisional court that this matter should be decided during the trial with evidence from both parties.3. Validity of Cheques with a Printed Limit of Rs. 50,000 but Issued for Higher Amounts:The court noted that the cheques in question had a printed limit of Rs. 50,000, yet were issued for amounts exceeding this limit. This issue was not thoroughly addressed by the lower courts. The court directed that this matter should be examined during the trial to determine whether cheques with a higher denomination than the printed limit could be validly issued and payable.Conclusion:The court upheld the revisional court's decision regarding the maintainability of the complaint and the remand for further proceedings. However, it directed the trial court to address the jurisdictional issue and proceed accordingly. The trial court must also consider the validity of the cheques issued beyond the printed limit during the trial. The revision was rejected to the extent of maintaining the complaint's validity but directed the trial court to follow the jurisdictional directives.