Allowed

Ibm India Pvt. Ltd. v. M/S Org Informatics Ltd.

Karnataka HC25 Jun 2021WP/57824/2017

Case brief

AI extract

What is this about?

High Court quashed orders directing return of multiple cheque bounce complaints to Delhi. Court held that petitioner could file complaints in Bengaluru based on its account location under Section 142(2) of Negotiable Instruments Act, noting violation of natural justice. Matters restored.

What did the court decide?

Quashing of impugned orders dated 17.11.2017 returning complaints; restoration of matters to trial court.

Ibm India Pvt. Ltd. Vs M/S Org Informatics Ltd. — Cheque Dishonour | Karnataka HC (2021)

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W.P.No.55906/2017 C/w W.P.Nos.57820/2017,57821/2017, 57822/2017, 57824/2017, 57825/2017, 57827/2017, 57828/2017 1

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 25^TH DAY OF JUNE 2021

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BEFORE

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THE HON’BLE MRS. JUSTICE K.S.MUDAGAL

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WRIT PETITION No.55906/2017 C/W WRIT PETITION Nos.57820/2017, 57821/2017, 57822/2017, 57824/2017, 57825/2017, 57827/2017, 57828/2017

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BETWEEN :

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IBM INDIA PRIVATE LIMITED HAVING ITS REGISTERED OFFICE AT NO.12, SUBRAMANYA ARCADE BANNERGHATTA ROAD BENGALURU – 560 029 REPRESENTED BY ITS COUNSEL AND AUTHORISED SIGNATORY MR.LAHAR APPAIAH …PETITIONER (COMMON)

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(BY SRI THOMAS VELLAPALLY, ADVOCATE)

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AND :

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M/S.ORG INFORMATICS LTD. 3^RD FLOOR, VIPUL SQUARE B BLOCK, SUSHANT LOK GURGAON – 122 002 HARYANA REP. BY ITS MANAGING DIRECTOR & CEO MR.AJOY KHANDHERIA

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MR.AJOY KHANDHERIA MANAGING DIRECTOR & CEO ORG INFORMATICS LTD., 3^RD FLOOR, VIPUL SQUARE B BLOCK, SUSHANT LOK GURGAON – 122 002 HARYANA

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MR.RAJESH SURI CHIEF FINANCIAL OFFICER

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W.P.No.55906/2017 C/w W.P.Nos.57820/2017,57821/2017, 57822/2017, 57824/2017, 57825/2017, 57827/2017, 57828/2017 2

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ORG INFORMATICS LTD., 3^RD FLOOR, VIPUL SQUARE B BLOCK, SUSHANT LOK GURGAON – 122 002 HARYANA

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MR.SUSHIL KUMAR CHIEF OPERATING OFFICER ORG INFORMATICS LTD., 3^RD FLOOR, VIPUL SQUARE B BLOCK, SUSHANT LOK GURGAON – 122 002 HARYANA …RESPONDENTS (COMMON)

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(BY SRI P.UDAYA SHANKAR RAI, ADVOCATE)

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THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA READ WITH SECTION 482 OF CR.P.C. PRAYING TO QUASH THE IMPUGNED ORDER DATED 17.11.2017 (ANNEXURE-E) PASSED BY LVIII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, MAYO HALL UNIT, BENGALURU IN CC NOS.56860/2016, 56861/2016, 58368/2016, 58366/2016, 57400/2016, 58367/2016, 56862/2016 AND 57399/2016 RESPECTIVELY ETC.

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THESE WRIT PETITIONS COMING ON FOR FURTHER HEARING THIS DAY, THE COURT THROUGH VIDEO CONFERENCE MADE THE FOLLOWING:

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O R D E R

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Since the parties to these cases are common and common questions of law and facts are involved, they are taken up for disposal by this common order.

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These petitions arise out of the order dated 17.11.2017 (Annexure-E) passed by LVIII Additional Chief Metropolitan Magistrate, Bengaluru returning the

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W.P.No.55906/2017 C/w W.P.Nos.57820/2017,57821/2017, 57822/2017, 57824/2017, 57825/2017, 57827/2017, 57828/2017 3

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complaints of the petitioner for presentation before proper

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Court in the cases set out in the table below:

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Sl. No.	W.P.No.	C.C.No.	Date of the order
1	55906/2017	56860/2016	17.11.2017
2	57820/2017	56861/2016	17.11.2017
3	57821/2017	58368/2016	17.11.2017
4	57822/2017	58366/2016	17.11.2017
5	57824/2017	57400/2016	17.11.2017
6	57825/2017	58367/2016	17.11.2017
7	57827/2017	56862/2016	17.11.2017
8	57828/2017	57399/2016	17.11.2017

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The petitioner is the Company incorporated under the Companies Act, 1956 having its registered office in Bangalore and branch office in New Delhi. Respondent No.1 is also public company registered under the Companies Act. Respondent Nos.2 to 4 are the Managing Director, Chief Executive Officer, Chief Financial Officer and Chief Operating Officer of respondent No.1 company.

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W.P.No.55906/2017 C/w W.P.Nos.57820/2017,57821/2017, 57822/2017, 57824/2017, 57825/2017, 57827/2017,

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57828/2017 4

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The petitioner company was providing

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information and technology services to respondent No.1. For availment of such services, respondent No.1 issued several cheques drawn on ICICI Bank, New Delhi Branch. The petitioner presented the said cheques to ABN AMRO Bank, Delhi Branch for collection. Those cheques were dishonoured. Therefore the petitioner got issued statutory notices to the respondents calling upon them to pay the cheque amount or else to face the prosecution.

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Since the notices were not complied, the petitioner filed the complaint (Annexure-A) in C.C.Nos.56860/2016, 56861/2016, 58368/2016, 58366/2016, 57400/2016, 58367/2016, 56862/2016 and 57399/2016 against the respondents before Metropolitan Magistrate, Delhi to prosecute them for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (‘the Act’ for short).

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In view of Negotiable Instruments (Amendment) Ordinance, 2015 (No.6 of 2015), the Metropolitan Magistrate, Delhi directed the petitioner to file affidavit with regard to the Bank where it maintains the

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W.P.No.55906/2017 C/w W.P.Nos.57820/2017,57821/2017, 57822/2017, 57824/2017, 57825/2017, 57827/2017, 57828/2017 5

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account. Accordingly, the petitioner filed affidavit as per Annexure-C stating that it maintains current account No.4608615 in ABN AMRO Bank, Residency Road, Bengaluru.

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On receipt of such affidavit, learned Metropolitan Magistrate, Delhi vide order Annexure-D dated 18.01.2016 held that the Magistrate Court at Bengaluru has jurisdiction to try the cases and directed to place the matters before learned Chief Metropolitan Magistrate, South East for necessary directions. Then cases were transferred to LVIII Additional Chief Metropolitan Magistrate Court, Bengaluru.

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On receipt of case papers, the trial Court secured the presence of the parties. The trial Court by impugned order held that the cheques were drawn at Delhi, presented for collection to the Bank at Delhi and dishonoured at Delhi and petitioner has not produced any proof to show that it maintained account at ABN AMRO Bank at Bengaluru. Therefore trial Court by the impugned

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order further held that it has no jurisdiction and directed to return the complaints to the petitioner for presentation

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W.P.No.55906/2017 C/w W.P.Nos.57820/2017,57821/2017, 57822/2017, 57824/2017, 57825/2017, 57827/2017,

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57828/2017 6

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before the Chief Judicial Magistrate Court, Karkardooma, New Delhi.

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In these petitions, the petitioner seeks

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quashing of the said orders on the ground that as per Sections 142(2)(b) of the Act and the Explanation to Section 142 of the Act, the petitioner can maintain the complaint at the branch where it holds account. It is further contended that the trial Court without referring to the affidavit filed by the petitioner and giving any opportunity to furnish all account particulars has passed the impugned order.

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Reiterating the ground of the petition Shri.Thomas Vellapally, learned Counsel for the petitioner relies upon the following judgments:

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(i) Bridgestone India (P) Ltd. v. Inderpal Singh¹ (ii) Brijendra Enterprise & Ors. vs. State of Gujarat & Ors.²

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Sri P.Udaya Shankar Rai, learned Counsel for

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the respondents submits that the cheques were issued at Delhi and presented for collection at Delhi, the

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1 (2016) 2 SCC 75

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2 (2016) 136 SCL 23 (Guj)s

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respondents are residing at Gurgaon, Haryana, therefore the trial Court was right in returning the complaints.

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Section 142(2) of the Act as amended by Amendment Act No.26/2015 which determines jurisdiction of the Court to try the offence under Section 138 of the Act reads as follows:

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“ 142. Cognizance of offences

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(1) ………………………………………………………………………..

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(2) The offence under Section 138 shall be inquired into and tried only by a court within whose local jurisdiction,-

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(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

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account, is situated ; or

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(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.

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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

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W.P.No.55906/2017 C/w W.P.Nos.57820/2017,57821/2017, 57822/2017, 57824/2017, 57825/2017, 57827/2017, 57828/2017 8

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the payee or holder in due course , as the case may be, maintains the account .”

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Section 142(2)(a) of the Act coupled with the explanation to the same makes it clear that even if the payee presents the cheque at another branch of his Bank, the home branch where he holds his account shall be deemed to be the branch where the cheque is presented for collection. Thereby he can maintain the complaint in a Court within whose jurisdiction his home branch situates.

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In this case, the learned Magistrate at Delhi himself requested the petitioner to file affidavit mentioning the names and particulars of its Bank account. The petitioner submitted the affidavit to the Metropolitan Magistrate, Delhi. Acting upon such affidavit, the Magistrate transferred the cases to Bengaluru Court. The respondents have not challenged those orders.

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The trial Court even without referring to the affidavit and calling upon the petitioner to produce the proof of the account particulars, by the impugned orders returned the complaints. The said orders are violative of

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W.P.No.55906/2017 C/w W.P.Nos.57820/2017,57821/2017, 57822/2017, 57824/2017, 57825/2017, 57827/2017, 57828/2017 9

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principles of natural justice and contrary to Section 142(2) of the Act. Therefore the petitions are allowed.

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The impugned orders dated 17.11.2017 as per Annexure-E passed by LVIII Additional Chief Metropolitan Magistrate, Bengaluru are hereby quashed. The matters are restored to files of the trial Court. The trial Court shall hear both the parties on the issue and proceed in accordance with law.

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Sd/JUDGE

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KSR

Ibm India Pvt. Ltd. v. M/S Org Informatics Ltd.

Case brief

What is this about?

What did the court decide?

Ibm India Pvt. Ltd. v. M/S Org Informatics Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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