2010 (10) TMI 1252 - HC - Indian Laws

Complaints Quashed: Court Lacked Jurisdiction Over Cheque Offences Occurring in the US; Proceedings Dismissed.

Pale Horse Designs No. 20 Versus Natarajan Rathnam

The IX MM, Saidapet, Chennai, lacked jurisdiction to entertain the complaints as the offences related to cheque issuance and dishonour occurred in the ... - Issues Involved:1. Jurisdiction of the court to entertain the complaint.2. Whether the offence was committed within the jurisdiction of the court.3. Applicability of domestic criminal law to acts committed outside India.4. Allegations of forum shopping and abuse of process of court.Detailed Analysis:1. Jurisdiction of the Court to Entertain the Complaint:The primary issue was whether the IX Metropolitan Magistrate, Saidapet, Chennai had jurisdiction to entertain the complaints. The petitioners contended that neither they nor their business operations were within the jurisdiction of the court, and all relevant actions (issuance, dishonour, and payment failure of the cheques) occurred in the United States. The court concluded that the mere presentation of the cheques in a bank in Chennai did not confer jurisdiction on the Saidapet court. The Supreme Court's rulings in *Shri Ishar Alloy Steels Ltd v. Jayaswals Neco Limited* and *M/s. Harman Electronics (P) Ltd. v. National Panasonic India Ltd.* supported this position, emphasizing that jurisdiction is tied to where the cheque is made payable and where the statutory notice is served, not merely where it is presented for collection.2. Whether the Offence was Committed within the Jurisdiction of the Court:The court examined whether any part of the offence under Sections 138 and 141 of the Negotiable Instruments Act, 1881 occurred within its jurisdiction. It found that all actions, including issuance and dishonour of the cheques, took place in the United States. The court cited several precedents, including the Supreme Court's decision in *Ahuja Nandkishore Dongre v. State of Maharashtra*, which held that jurisdiction should be based on where the cheque is intended to be paid, not where it is presented for collection.3. Applicability of Domestic Criminal Law to Acts Committed Outside India:The court noted that the Negotiable Instruments Act, 1881 and the Criminal Procedure Code, 1973 do not have extra-territorial application unless explicitly stated. The cheques in question were foreign instruments governed by the law of the place where they were issued and payable, i.e., the United States. The court referred to Sections 134 to 137 of the Negotiable Instruments Act, which deal with the law governing foreign instruments and concluded that Indian law did not apply to the cheques made and payable in the United States.4. Allegations of Forum Shopping and Abuse of Process of Court:The court found that the respondent's actions amounted to forum shopping and abuse of process. The respondent presented the cheques in Chennai and filed complaints there to leverage the criminal provisions of the Negotiable Instruments Act, 1881 for a quicker resolution. The court emphasized that such actions undermine the judicial process and cannot be allowed. The judgment in *Trilux Technologies Singapore P. Ltd. v. Boon Technologies* was distinguished on the grounds that it did not consider the larger bench ruling in *Shri Ishar Alloy Steels Ltd v. Jayaswals Neco Limited*.Conclusion:The court concluded that the IX Metropolitan Magistrate, Saidapet, Chennai did not have jurisdiction to entertain the complaints as the offences were not committed within its jurisdiction. The complaints were quashed to prevent miscarriage of justice and abuse of process. The criminal proceedings in C.C. Nos. 1506, 1507, and 1505 of 2007 were quashed, and the connected miscellaneous petitions were closed.