Territorial Jurisdiction for Trials under Section 138 NI Act Determined in Meerut, U.P.

The High Court determined that the territorial jurisdiction for trials under Section 138 of the Negotiable Instruments Act, 1881, is in Meerut, U.P., where the complainant maintains its account. The court upheld the orders transferring the cases to Meerut, U.P., based on the amended provisions of the Act. The learned ASJ's decision to restore jurisdiction to New Delhi was overturned, emphasizing the importance of the amended Section 142(2) and the retrospective applicability of Section 142A. The records of the complaint cases were directed to be transferred to the concerned CMM at Meerut, U.P.

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Issues involved:
1. Territorial jurisdiction under the Negotiable Instruments Act, 1881.
2. Applicability of the Negotiable Instruments (Amendment) Ordinance, 2015.
3. Validity of the orders passed by the learned MM and ASJ.

Issue-wise detailed analysis:

1. Territorial jurisdiction under the Negotiable Instruments Act, 1881:

The primary issue concerns the determination of the appropriate territorial jurisdiction for the trial of complaints under Sections 138 and 141 of the Negotiable Instruments Act, 1881. The complaints were initially filed in New Delhi, asserting that the cause of action arose there because the cheques were presented and dishonoured in New Delhi. However, the trial court observed that the complainant had deposited the cheques in its account maintained in Meerut, U.P. As per the Negotiable Instruments (Amendment) Ordinance, 2015, the jurisdiction lies with the court where the payee or holder in due course maintains the account. The complainant's account was located in Meerut, U.P., which led to the conclusion that the jurisdiction should be transferred to Meerut.

2. Applicability of the Negotiable Instruments (Amendment) Ordinance, 2015:

The amendment to the Negotiable Instruments Act, 1881 through the Ordinance of 2015, which came into force on 15.06.2015, played a crucial role in determining jurisdiction. The amendment specified that the offence under Section 138 shall be tried only by a court within whose local jurisdiction the branch of the bank where the payee or holder in due course maintains the account is situated. This provision was pivotal in transferring the jurisdiction to Meerut, U.P., where the complainant maintained its account. The court also cited the retrospective applicability of Section 142A, which validated the transfer of pending cases to the appropriate jurisdiction as per the amended Section 142(2).

3. Validity of the orders passed by the learned MM and ASJ:

The learned MM had initially ordered the transfer of the cases to Meerut, U.P., based on the amended provisions of the Negotiable Instruments Act. This order was challenged, and the learned ASJ set aside the MM's order, restoring jurisdiction to New Delhi. However, the High Court found that the ASJ's order was not in consonance with the law. The High Court upheld the MM's decision, restoring the orders dated 21.08.2015 and 15.10.2015, which directed the transfer of the cases to Meerut, U.P. The High Court emphasized that the jurisdiction lies with the court where the complainant maintains its account, as per the amended Section 142(2) and the retrospective applicability of Section 142A.

Conclusion:

The High Court concluded that the territorial jurisdiction for the trial of the complaints under Section 138 of the Negotiable Instruments Act, 1881, lies with the court in Meerut, U.P., where the complainant maintains its account. The orders of the learned MM were restored, and the learned CMM, Patiala House Courts, New Delhi, was directed to transfer the records of the complaint cases to the concerned CMM at Meerut, U.P., within three weeks of the receipt of this order.

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