TaxTMI 
TaxTMI 
2016 (4) TMI 2
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....e respondent no.2, a company registered under the provisions of the Companies Act, 1956, filed a private complaint No.8758 of 2009 in the Court of the learned Metropolitan Magistrate (Negotiable Instruments Act), Court No.7, Ahmedabad, for dishonour of the cheque punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, 'the Act'). It the case of the respondent no.2 that it had business relations with the accused. The accused had been purchasing the goods from them as ordered. The accused issued a cheque bearing No.064039 dated 4th June 2009 drawn on the Union Bank of India for the amount of Rs. 15,21,741=00 duly signed by him as the proprietor of the proprietory concern. The cheque was drawn by the accused no.2 of the account maintained by him with the Union Bank of India, Badalapur, District Jaunpur, State of Uttar Pradesh. The complainant deposited the cheque with the ICICI Bank Limited, Gorakhpur Branch, Gorakhpur, State of Uttar Pradesh. The cheque was dishonoured as the funds were insufficient in the account maintained by the complainant with the Union Bank of India. The complainant issued a statutory notice under Section 138 of the Act da....
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....etitioner has no business dealings with the Answering Respondent at its Ahmedabad office. I say that the Petitioner has purchased goods manufactured by the Answering Respondent. The order for the goods delivered are processed at Ahmedabad office. The Answering Respondent in turns maintains a current and running account of the purchasers, in the present case, the Petitioners herein. The Invoices issued for the goods dispatched were subject to Ahmedabad Jurisdiction. Copy of a sample invoices dt. 12.02.09 & 05.03.09 in respect of the Petitioners are annexed hereto and marked Annexure - A (Colly). The Petitioners have issued the subject cheques in discharge of their obligation to make payment for the goods purchased. The said payment is payable at Ahmedabad. 5. I submit that since the Answering Respondent undertakes numerous transactions all across India, the Answering Respondent has entered into a CMS (Cash Management Service) agreement with its bankers, ICICI Bank Limited. In the said system, a centralised pooling account is created at Ahmedabad. Cheques received by the Answering Respondent at any place in India can be deposited in any ICICI Bank Ltd branch in India and the....
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....ent case. In the facts of that case, it was not known where the intimation of dishonour of cheque is received. On the contrary, in the facts of the present case, it is clear that the notice of intimation of dishonour of cheque was received at Ahmedabad. It is denied that the complaint is general or vague or does not create an offence under Section 138 of the Act. The offence was created pursuant to non- payment of the amount of dishonoured cheque pursuant to the Notice dated 6.7.2009 issued under Section 138 of the Act. It is denied that the Complaint suffers from the vice of nondisclosure or is vitiated, as alleged or at all. I deny that the complainant requires to plead or prove as to pursuant to which business deal or order is the dishonoured cheque issued, as alleged or at all. I deny that the impugned Complaint and Order dated 8.9.2009 issuing summons deserve to be quashed and set aside. I submit that the contentions 'raised in the said Petition are nothing but an after thought, raised only to avoid the proceedings instituted under provisions of the Act." Thus, it appears from the stance of the complainant that it had entered into a cash management service agreement wit....
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....rted by the new Ordinance referred to above. According to the new Ordinance, even the pending cases would stand transferred to the Courts. In Dashrath Rupsingh Rathod (supra), a three Judge bench of the Supreme Court took the view that a complaint for dishonour of cheque can be filed only in a Court which has the territorial jurisdiction over the place where the cheque is dishonoured by the bank on which it is drawn. Thus, if a cheque is drawn by a person of the account maintained with his bank at Ahmedabad, the complaint for dishonour in respect of such cheque could be filed only in a Court at Ahmedabad within whose territorial jurisdiction the said bank is located. According to the decision of the Supreme Court, such a case cannot be filed in any other Court at any other place. For example, if 'X' is the payee of the cheque and if he presents a cheque for clearing at Vadodara, it cannot be filed at Vadodara. The judgment of the Supreme Court proceeded on the footing that the payee of a cheque should not necessarily harass the drawer of the cheque by filing complaint for dishonour at the place of his choice by deliberately choosing a different place for presenting the c....
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....urisdiction under sub-section (2) of Section 142 or the case has been transferred to that Court under subsection (1), and such complaint is pending in that Court, all subsequent complaints arising out of Section 138 against the same drawer shall be filed before the same Court irrespective of whether those cheques were delivered for collection or presented for payment within the territorial jurisdiction of that Court. (3) If, on the date of the commencement of the Negotiable Instruments (Amendment) Ordinance, 2015, more than one prosecution filed by the same payee or holder in due course, as the case may be, against the same drawer of cheques is pending before different Courts, upon the said fact having been brought to the notice of the Court, such Court shall transfer the case to the Court having jurisdiction under sub-section (2) of Section 142 before which the first case was filed and is pending, as if that sub-section had been in force at all material times." The Negotiable Instruments (Amendment) Ordinance, 2015 (Ordinance 6 of 2015) came to be replaced with the Negotiable Instruments (Amendment) Bill, 2015. The Negotiable Instruments (Amendment) Bill, 2015, inter a....
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.... payee has account, is located. Let me give an example to understand the jurisdiction according to the amendment : (1) 'A' holds an account with the Navrangpura Branch, Ahmedabad, of 'XYZ' Bank, issues a cheque payable at par in favour of 'B'. 'B' holds an account with the M.S. University Road Branch, Vadodara, of the 'PQR' Bank, deposits the said cheque at the Surat Branch of the 'PQR' Bank and the cheque is dishonoured. The complaint will have to be filed before the Court having the local jurisdiction where the M.S.University Road Branch, Vadodara, of the 'PQR' Bank is situated. (2) 'A' holds an account with the Navranpura Branch, Ahmedabad, of 'XYZ' Bank, issues a cheque payable at par in favour of 'B'. 'B' presents the said cheque at the Vadodara Branch of the 'XYZ' Bank (but 'B' does not hold account in any branch of the 'XYZ' Bank) and the cheque is dishonoured. The complaint will have to be filed before the Court having the local jurisdiction where the Navrangpura Branch, Ahmedabad, of the 'XYZ' Bank is situated. Therefore, to summar....
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....nch, Gorakhpur, Uttar Pradesh. The same was accepted by the bank without there being any account of the complainant with the same. It was dishonoured with the intimation "funds insufficient". However, as explained by the complainant, the complainant was to receive the credit of the said cheque at the centralized pooling account in Ahmedabad. Since the cheque could not be cleared, the intimation regarding the same was given by the ICICI Bank Limited, JMC House, Ahmedabad Branch, to the complainant at its address of the registered office in Ahmedabad. Whatever may be the arrangement of the complainant with its banker, could it be said that the cheque was deposited in the ICICI Bank Limited at Ahmedabad i.e. the branch which actually gave intimation to the complainant regarding the dishonour of the cheque. The argument canvassed on behalf of the complainant is that since the requisite cheque amount was to be credited in the account maintained by the company with the ICICI Bank Limited at Ahmedabad and the intimation of dishonour was also by the branch of the ICICI Bank Limited at Ahmedabad, his complaint at Ahmedabad in the Court of the learned Metropolitan Magistrate is maintainab....
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....in Dashrath Rupsingh Rathod vs. State of Maharashtra and another, 2014 9 SCC 129, and pointedly invited our attention to the conclusions drawn by this Court in paragraph 58, which is extracted hereunder: "58. To sum up: 58.1 An offence under Section 138 of the Negotiable Instruments Act, 1881 is committed no sooner a cheque drawn by the accused on an account being maintained by him in a bank for discharge of debt/liability is returned unpaid for insufficiency of funds or for the reason that the amount exceeds the arrangement made with the bank. 58.2 Cognizance of any such offence is however forbidden under Section 142 of the Act except upon a complaint in writing made by the payee or holder of the cheque in due course within a period of one month from the date the cause of action accrues to such payee or holder under clause (c) of proviso to Section 138. 58.3 The cause of action to file a complaint accrues to a complainant/payee/holder of a cheque in due course if (a) the dishonoured cheque is presented to the drawee bank within a period of six months from the date of its issue. (b) If the complainant has demanded payment of che....
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....s inserted into the Negotiable Instruments Act. Sections 3 and 4 of the Negotiable Instruments (Amendment) Second Ordinance, 2015 are being extracted hereunder: "3. In the principal Act, section 142 shall be numbered as sub-section (1) thereof and after subsection (1) as so numbered, the following sub-section shall be inserted, namely:- (2) The offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction,-- (a) 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 the account, is situated; or (b) 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 account, is situated. Explanation For the purposes of clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains ....
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....ared by this Court, as well as, the provisions of the Code of Criminal Procedure. Insofar as the instant aspect of the matter is concerned, a reference may be made to Section 4 of the Negotiable Instruments (Amendment) Second Ordinance, 2015, whereby Section 142A was inserted into the Negotiable Instruments Act. A perusal of Subsection (1) thereof leaves no room for any doubt, that insofar as the offence under Section 138 of the Negotiable Instruments Act is concerned, on the issue of jurisdiction, the provisions of the Code of Criminal Procedure, 1973, would have to give way to the provisions of the instant enactment on account of the non-obstante clause in sub-section (1) of Section 142A. Likewise, any judgment, decree, order or direction issued by a Court would have no effect insofar as the territorial jurisdiction for initiating proceedings under Section 138 of the Negotiable Instruments Act is concerned. In the above view of the matter, we are satisfied, that the judgment rendered by this Court in Dashrath Rupsingh Rathod's case would also not non-suit the appellant for the relief claimed. 12. We are in complete agreement with the contention advanced at the hands ....
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....ed by the complainant at Uttar Pradesh and was presented in the ICICI Bank Limited, Gorakhpur Branch, Gorakhpur, Uttar Pradesh. Thereafter, the bank acted according to the cash management service agreement as explained by me earlier. The new banking system provides that the payee can present the cheque for collection in any branch of the ICICI Bank anywhere in the country without there being any account being maintained in the said branch. The branch bank which accepts the cheques will thereafter process the same, and as explained above, the credit of the requisite amounts mentioned in the cheque would be given in the centralized pooling account, i.e. like in the present case, in the centralized pooling account maintained by the complainant at Ahmedabad. At this stage, it is important to look into the explanation in Section 142(2). The explanation provides that for the purposes of clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or the holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or the holder in due course, as the case may be, maintains the account. For exa....
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....rs are fully supported by various authorities of the Supreme Court. In Burmah Shell Oil Storage and Distributing Co. of India Ltd. v. Commercial Tax Officer [(1961) 1 SCR 902 : (AIR 1961 SC 315)], a Constitution Bench decision of the Supreme Court observed thus : "Now, the Explanation must be interpreted according to its own tenor, and it is meant to explain cl. (1)(a) of the Article and not vice versa . It is an error to explain the Explanation with the aid of the Article, because this reverses their roles." In Bihar Co-operative Development Cane Marketing Union Ltd. v. Bank of Bihar (1967) 1 SCR 848 : (AIR 1967 SC 389), the Supreme Court observed thus : "The Explanation must be read so as to harmonise with and clear up any ambiguity in the main section. It should not be so construed as to widen the ambit of the section." In Hiralal Rattanlal etc. v. State of U.P. [(AIR 1973 SC 1034)], the Supreme Court observed thus : "On the basis, of the language of the Explanation this Court held that it did not widen the scope of clause (c). But from what has been said in the case, it is clear that if on a true reading of an Explanation it appears that it has ....
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.... facie to be', while in other case, it means, 'taken conclusively'. Its various meanings are, - 'to deem' is 'to hold in belief, estimation or opinion'; to judge; adjudge; decide; considered to be; to have or to be of an opinion; to esteem; to suppose, to think, decide or believe on considerations; to account, to regard; to adjudge or decide; to conclude upon consideration. (see Major Law Lexicon by P.Ramanatha Aiyar, 4th Edition 2010 Vol.2). I find it difficult to accept the argument of the learned counsel appearing for the accused that the case in hand is covered by Section 142(2)(b). The argument is that as the cheque was delivered for collection at the ICICI Bank, Gorakhpur branch, Uttar Pradesh, without any account maintained in the said branch, it could be said that the cheque was presented for payment by the complainant "otherwise through an account", and if that be so, the complaint for dishonour could be filed in a Court within whose local jurisdiction the branch of the drawee bank where the drawer maintains the account, is situated. In my view, the words "otherwise through an account" would mean that the cheque is presented for payment over ....