Jammu & Kashmir High Court
Aditya Malhotra Prop. M/S Ann vs Dharminder Singh on 3 April, 2025
Author: Sanjay Dhar
Bench: Sanjay Dhar
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
CRM(M) No. 967/2022
Reserved on 19.03.2025
Pronounced on 03.04.2025
Aditya Malhotra Prop. M/s ANN .....Appellant(s)/Petitioner(s)
Infrastructure
Q
Through: Mr. Vishal Kapoor, Adv.
vs
Dharminder Singh ..... Respondent(s)
Through: Mr. Sunil Sethi, Sr. Adv. with
Mr. Navyug Sethi, Adv.
Coram: HON'BLE MR. JUSTICE SANJAY DHAR, JUDGE
JUDGMENT
1. The petitioner through the medium of present petition has challenged the
complaint filed by the respondent against him and his proprietary concern
alleging commission of offence under section 138 Negotiable Instruments
Act read with section 420 RPC. Challenge has also been thrown to order
dated 24.07.2021 passed by Judicial Magistrate 1st Class (Special Mobile
Magistrate), Jammu(hereinafter to be referred as the Trial Magistrate),
whereby cognizance of the offences has been taken and the process has
been issued against the petitioner.
2. It appears that a complaint came to be filed by the respondent against the
petitioner and M/s ANN Infrastructure before the learned Trial Magistrate
alleging therein that a cheque in the amount of Rs. 60 lacs was issued by
the petitioner from his account maintained with Axis Bank Limited
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Jammu in discharge of his liability towards the respondent. It has been
further pleaded in the complaint that when the said cheque was presented
by the respondent/complainant for encashment through his banker ICICI
Bank Limited in his account No. 003101041811, the same was returned
unpaid with the endorsement on the memo “title of account required” vide
memo dated 30.09.2020. It was further pleaded by the complainant that a
legal notice/demand dated 08.10.2020 was served by the respondent upon
the petitioner but in spite of receipt of the same, he failed to repay the
cheque amount. Accordingly, the impugned complaint for commission of
offence under section 138 Negotiable Instruments Act and section 420
RPC was filed before the learned Trial Magistrate.
3. It appears that the learned Trial Magistrate after going through the
preliminary statement of the complainant in the shape of a sworn affidavit
and the documents annexed with the complaint, framed a prima facie
opinion that the offence under section 138 Negotiable Instruments Act is
made out against the petitioner and the co-accused. Accordingly vide
impugned order dated 24.07.2021 process has been issued against the
petitioner and the co-accused.
4. Heard and considered.
5. Learned counsel for the petitioner has primarily assailed impugned order
dated 24.07.2021 on two grounds, one that the cheque in question was
presented by the respondent in his bank account maintained with ICICI
Bank Limited, Branch Sector 128 Noida, Utter Pradesh and as such, the
Trial Magistrate had no territorial jurisdiction to entertain the complaint.
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Secondly that it was not open to the learned Trial Magistrate to accept the
preliminary evidence of the complainant by way of an affidavit, as
according to the learned counsel for the petitioner, the learned Trial
Magistrate was obliged to follow the procedure prescribed under section
200 of the Code of Criminal Procedure (Cr.PC) and to record the
statement of the complainant on oath before issuing process against the
petitioner.
6. Learned Senior Counsel appearing on behalf of the respondent has stated
that the complaint has remained pending before the learned Trial Court for
more than two years but the petitioner participated in the proceedings
before the learned Trial Magistrate without raising any objection with
regard to the territorial jurisdiction of the learned Magistrate. He has
further contended that even during the pendency of the proceedings
negotiations regarding settlement of the case took place and the petitioner
even liquidated a substantial portion of the cheque amount during the
proceedings held before the learned Trial Magistrate. Thus, according to
the learned Senior Counsel, the petitioner has acquiesced to the
jurisdiction of the learned Trial Magistrate and he cannot now turn around
and challenge the same.
7. Regarding the second contention, the learned Senior Counsel has
contended that the provisions contained in section 145 of the Negotiable
Instruments Act clearly provide that it is open to the Magistrate to record
the evidence of the complainant on affidavits in any inquiry, trial or other
proceedings under the Code of Criminal Procedure. Therefore, the learned
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Trial Magistrate was well in his jurisdiction to accept the preliminary
evidence of the complainant by way of affidavit.
8. If we have a look at the complaint filed by the respondent, it is pleaded
therein that the complainant had presented the cheque in question for
encashment through his banker ICICI Bank Limited, wherein he was
maintaining account No. 003101041811. This means that the
complainant/respondent had presented his cheque for encashment through
ICICI Bank Limited in his aforesaid account. The name of the branch of
the bank is not mentioned in the complaint, however, in the dishonor
memo annexed with the complaint, it is clearly indicated that the
respondent/complainant was maintaining his aforesaid account with ICICI
Bank Limited, Sector 128, Gautam Budh Nagar, Noida, Uttar Pradesh.
The question that falls for determination is as to whether the Courts at
Jammu have territorial jurisdiction to entertain the impugned complaint.
9. In the above context, it would be apt to refer to the provisions contained in
section 142(2) of the Negotiable Instruments Act, which read as under:
“142. Cognizance of offences.– [(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 the account.]”
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CRM(M) No. 967/2022
10. From a perusal of the aforesaid provision, it is clear that a complaint for
offence under section 138 Negotiable Instruments Act can be inquired into
and tried only by the court within whose local jurisdiction a cheque is
delivered for collection i.e. the branch of the bank of the payee or the
holder in due course or if the cheque is presented for payment otherwise
through an account, the location of the branch of the drawee bank where
the drawer maintains the account would be determinative of the territorial
jurisdiction.
11. The aforesaid position of law has been reaffirmed by the Supreme Court
in the case of Bridgestone India Pvt. Ltd. v Inderpal Singh, (2016) 2
SCC 75 in which, it has been held that Section 142(2) of the Negotiable
Instruments Act amended by the Negotiable Instruments (Amendment)
Second Ordinance 2015, leaves no room for any doubt, specially in view
of the Explanation thereunder, that with reference to an offence under
section 138 of the Negotiable Instruments Act, the place where cheque is
delivered for collection i.e. branch of the bank of the payee or holder in
due course, where the drawee maintains an account, would be
determinative of the place of territorial jurisdiction.
12. Recently the Supreme Court in the case of Sh. Sendhuragro and Oil
Industries v Kotak Mahindra Bank Limited, 2025 Livelaw SC 292
has explained the provisions contained in section 142(2) of the Negotiable
Instruments Act along with Explanation thereto in the following manner:
“61. It is clear on a reading of Section 142(2)(a) and the
Explanation thereto that, 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
6CRM(M) No. 967/2022
which the payee or holder in due course, as the case may be,
maintains the account.
62. A conjoint reading of Section 142(2)(a) along with the
explanation thereof, makes the position emphatically clear that,
when a cheque is delivered or issued to a person with liberty to
present the cheque for collection at any branch of the bank
where the payee or holder in due course, as the case may be,
maintains the account then, the cheque shall be deemed to have
been delivered or issued to the branch of the bank, in which, the
payee or holder in due course, as the case may be, maintains the
account, and the court of the place where such cheque was
presented for collection, will have the jurisdiction to entertain
the complaint alleging the commission of offence punishable
under Section 138 of the N.I. Act. In that view of the position of
law, the word „delivered‟ used in Section 142(2)(a) of the N.I.
Act has no significance. What is of significance is the
expression „for collection through an account‟. That is to say,
delivery of the cheque takes place where the cheque was issued
and presentation of the cheque will be through the account of the
payee or holder in due course, and the said place is decisive to
determine the question of jurisdiction.”
13. From the foregoing analysis of law on the subject, it is clear that inquiry
trial or other proceedings in respect of a case under section 138 Negotiable
Instruments Act can be held only by a court within whose local
jurisdiction the cheque is delivered for collection i.e. the branch of the
bank of the payee where the payee or the holder in due course, as the case
may be, maintains the account.
14. The provisions contained in section 177 of the Cr.P.C. do not apply to
cases under Negotiable Instruments Act while determining the territorial
jurisdiction of a court because Section 142 of the Negotiable Instruments
Act begins with a non obstinate clause and Section 142 (2) uses the
expression “only” meaning thereby only those courts which are mentioned
in the said sub section will have jurisdiction to entertain the complaint
notwithstanding anything contrary provided under the Cr.P.C.
15. Adverting to the facts of the present case, it is clear that the
respondent/complainant had presented the cheque in his bank account
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maintained at ICICI, Sector 128 Noida (UP) which is beyond the local
territorial jurisdiction of the learned Trial Magistrate. It is not a case where
the respondent/complainant had presented the cheque for payment
otherwise through an account, in that case even the location of the branch
of drawee bank where the drawer maintains the account would have been
determinative of the territorial jurisdiction. Thus, it is clear that the learned
Trial Magistrate did not have territorial jurisdiction to entertain the
complaint which is subject matter of the present petition.
16. Learned Senior Counsel appearing for the respondent has contended that
the petitioner by participating in the proceedings before the learned Trial
Magistrate and even negotiating the settlement with the complainant has
acquiesced to the jurisdiction of the Trial Magistrate and he cannot be
permitted to challenge the jurisdiction of the learned Trial Magistrate at
this stage. In this regard, the learned Senior Counsel has relied upon the
judgments of the Supreme Court in the case of Kedar Shashikant
Deshpande and others v Bhor Municipal Council and others, (2011) 2
SCC 654, M/s Neelkantan and Bros. Construction v Superintending
Engineer, National Highways, Salem and others, (1988) 4 SCC 462,
Prasun Roy v Calcutta Metropolitan Development Authority and
another, (1987) 4 SCC 217, Madhya Pradesh Administration v
Tribhuban, (2007) 9 SCC 748, Sohan Singh and others v General
Manager, Ordnance Factory, Khamaria, Jabalpur and others,
1984(Supp) SCC 661, Municipal Commissoner, Calcutta and others v
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Salil Kumar Banerjee and others, (2000) 4 SCC 108 and Rukmani
Devi and others v Narendra Lal Gupta, (1985) 1 SCC 144.
17. The aforesaid judgments relied upon by learned Senior Counsel for the
respondent are of no help to the case of the respondent because in all these
cases, the proceedings pertained to either arbitration matters or to
proceedings under certain special statutes. Besides this, in all these cases,
the jurisdiction of the authorities was challenged after the authorities had
already decided the matter against the party challenging the jurisdiction. In
the present case, the proceedings before the learned Trial Magistrate are
still at its inception and only evidence by way of affidavits has been filed
by the complainant. The witnesses of the complainant are yet to be cross
examined. Therefore, it cannot be stated that the petitioner has by his
conduct acquiesced to the jurisdiction of the learned Trial Magistrate.
Even otherwise a Court which lacks inherent jurisdiction to entertain a
case cannot be vested with jurisdiction by consent of the parties. The
contention of the learned Senior Counsel is, therefore, without any merit.
18. Having held that the learned Trial Magistrate had no jurisdiction to
entertain the complaint filed by the respondent against the petitioner and
the co-accused, and consequently he had no jurisdiction to issue process
against the petitioner and the co-accused, it is not necessary to go to the
second ground of challenge urged by the learned counsel for the
petitioner.
19. For the foregoing reasons, the petition is allowed and the impugned order
passed by the learned Trial Magistrate on 24.07.2021 is set aside on the
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ground of lack of territorial jurisdiction. The learned Trial Magistrate shall
return the complaint to the respondent/complainant along with original
documents for its presentation before the competent Magistrate having
jurisdiction. It shall be open to the respondent/complainant to seek
condonation of delay in filing the complaint before the Magistrate having
jurisdiction.
(SANJAY DHAR)
JUDGE
Jammu
03.04.2025
Rakesh PS
Whether the order is speaking: Yes
Whether the order is reportable: Yes
Rakesh Kumar
2025.04.04 09:33
I attest to the accuracy and
integrity of this document
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