2024 (4) TMI 896 - HC - Indian Laws

Foreign cheque from Dubai bank presented in Delhi establishes territorial jurisdiction under Section 138 NI Act

Right Choice Marketing Solutions Jlt & Ors. Versus State NCT of Delhi & Anr.

Right Choice Marketing Solutions Jlt & Ors. Versus State NCT of Delhi & Anr. - TMI Issues Involved:1. Jurisdiction of Indian courts under Section 138 of the Negotiable Instruments Act (NI Act) for a foreign cheque.2. Applicability of Section 138 of the NI Act to cheques drawn and payable outside India.3. Delay and laches in filing the petition.Summary:1. Jurisdiction of Indian courts under Section 138 of the NI Act for a foreign cheque:The primary issue before the court was whether the presentation of the cheque at the ICICI Bank, Greater Kailash-I, New Delhi, suffices to invoke the provisions of Section 138 of the NI Act and makes the complaint maintainable. The court noted that the cheque was not made in India, not payable in India, and drawn on a bank in Dubai, making it a foreign instrument u/s 12 of the NI Act. The court referred to Section 142(2) of the NI Act, which states that the offence under Section 138 shall be inquired into and tried by a court within whose local jurisdiction the cheque is delivered for collection. Since the cheque was presented for payment in Delhi, the court held that the Delhi court has jurisdiction to inquire into and try the offence.2. Applicability of Section 138 of the NI Act to cheques drawn and payable outside India:The petitioners argued that the NI Act does not have extraterritorial application and that the liability of the maker of the cheque is regulated by the laws of Dubai, where the cheque was drawn. They cited Section 134 of the NI Act, which states that the liability of the maker of a foreign cheque is regulated by the law of the place where the cheque was made. The court, however, noted that Section 138 of the NI Act was introduced to regulate financial promises and enhance the acceptability of cheques, and there is no exclusion for foreign cheques. The court also referred to the legislative intent behind the amendment to Section 142 of the NI Act, which allows the payee to present the cheque in India and invoke the jurisdiction of Indian courts.3. Delay and laches in filing the petition:The respondent argued that the petition should be dismissed on the grounds of delay and laches, as it was filed more than five years after the complaint was made and at a stage when the defence evidence was being recorded. The court noted that the petitioners provided no explanation for the delay in filing the petition and held that the unexplained delay itself is sufficient ground to refuse to exercise its inherent jurisdiction under Section 482 of the Cr.P.C. to quash the complaint.Conclusion:The court dismissed the petition, finding no merit in the arguments presented by the petitioners and upheld the jurisdiction of the Delhi court to try the complaint under Section 138 of the NI Act. The court also emphasized the legislative intent to curb the indiscriminate issuance of cheques and safeguard the interests of creditors.