Allowed

Tapan Kumar Nayak v. Biswanath Sahu

Orissa HC30 Aug 2016TRPCRL/37/2013

Case brief

AI extract

What is this about?

The High Court of Orissa allowed an application under Section 407 Cr.P.C. requesting transfer of a Section 138 N.I. Act case from Cuttack to Dhenkanal. Relying on Dashrath Rupsingh Rathod and the 2015 amendment, the Court held Dhenkanal had jurisdiction as the cheque was dishonoured there.

What did the court decide?

Complaint case ICC No. 36 of 2008 transferred from S.D.J.M. (Sadar), Cuttack to S.D.J.M., Dhenkanal for trial.

Tapan Kumar Nayak Vs Biswanath Sahu — Cheque Dishonour | Orissa HC (2016)

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IN THE HIGH COURT OF ORISSA, CUTTACK

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TRPCRL NO. 37 of 2013

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An application under section 407 of the Code of Criminal Procedure in connection with I.C.C. Case No. 36 of 2008 pending in the Court of S.D.J.M. (Sadar), Cuttack.

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Tapan Kumar Nayak	………	Petitioner
	-Versus-
Biswanath Sahu	………	Opp. party
For Petitioner:	-	Mr. S. K. Nayak-2
		Miss A. Nayak
For Opp. party:	-	Mr. R. C. Barik

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-------------------P R E S E N T: THE HONOURABLE MR. JUSTICE S.K. SAHOO --------------------------------------------------------------------------------------------------Date of Argument and Judgment- 30.08.2016 ---------------------------------------------------------------------------------------------------

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S. K. Sahoo, J . This is an application under section 407 Cr.P.C.

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seeking transfer of the complaint case bearing I.C.C. Case No.36 of 2008 which is a proceeding under section 138 of the Negotiable Instruments Act, 1881 (hereafter “N.I. Act”) from the Court of learned S.D.J.M. (Sadar), Cuttack to the Court of learned S.D.J.M., Dhenkanal for trial.

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The petitioner is the complainant and the opposite party is the accused in the said complaint case. It is the case of the petitioner that he had got close acquaintance with the opposite party and taking advantage of such acquaintance, the opposite party requested him to give a loan of Rs.2,00,000/(rupees two lakhs only) without interest and promised to repay the entire loan amount within a period of six months. The petitioner in good faith handed over a cash of Rs.2,00,000/(rupees two lakhs only) on 01.02.2005 to the opposite party and after expiry of six months, the petitioner requested the opposite party for repayment of the entire loan amount but the opposite party on some pretext or the other, avoided the petitioner and finally on 13.08.2007, the opposite party handed over four numbers of cheques to the petitioner bearing Cheque No. 608980 dated 13.08.2007, Cheque No. 608981 dated 13.08.2007, Cheque No. 608982 dated 13.08.2007 and Cheque No. 608983 dated 13.08.2007 of the State Bank of India, Kamakhyanagar totaling to Rs.2,00,000/-(Rupees two lakhs) and asked the petitioner to present the cheques for encashment. The petitioner presented those cheques in the Union Bank of India, Sogar Branch, Dhenkanal for collection and encashment but the cheques were returned by the bank on the ground “exceeds arrangement” and accordingly, intimation was given to the

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petitioner from the bank vide cheque return memo dated 25.10.2007. A legal notice was sent by advocate of the petitioner from Cuttack through registered post with AD to the opposite party at his permanent address which returned with the endorsement “long absent”. The complaint petition was filed in the Court of learned S.D.J.M. (Sadar), Cuttack for taking cognizance of the offence under section 138 of the N.I. Act and accordingly, cognizance of offence was taken and summons was issued to the opposite party for appearance.

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The learned counsel for the petitioner contended that at present the learned S.D.J.M. (Sadar), Cuttack has got no territorial jurisdiction to entertain the complaint petition inasmuch as place of issuing of legal notice cannot be the place where the case is to be instituted and Court of learned S.D.J.M., Dhenkanal has got jurisdiction to entertain the case. It is further contended that the petitioner and the opposite party and the witnesses belong to Dhenkanal and it will be convenient for all the parties if the case is tried in the Court of learned S.D.J.M., Dhenkanal within whose local jurisdiction the cause of action arose and the offence was committed.

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Learned counsel for the petitioner drew the attention

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of this Court to the case of Dashrath Rupsingh Rathod -Vrs.-

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State of Maharashtra & another reported in (2014) 59

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OCR (SC) 289 wherein it is held as follows:-

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“27…….Applying the general rule recognized under Section 177 of the Cr.P.C. that all offences are local, the place where the dishonour occurs is the place for commission of the offence vesting the Court exercising territorial jurisdiction over the area with the power to try the offences. Having said that we must hasten to add, that in cases where the offence under Section 138 is out of the offences committed in a single transaction within the meaning of Section 220(1) of the Cr.P.C. then the offender may be charged with and tried at one trial for every such offence and any such inquiry or trial may be conducted by any Court competent to enquire into or try any of the offences as provided by Section 184 of the Code. So also, if an offence punishable under Section 138 of the Act is committed as a part of single transaction with the offence of cheating and dishonestly inducing delivery of property then in terms of Section 182 (1) read with Sections 184 and 220 of the Cr.P.C. such offence may be tried either at the place where the inducement took place or where the cheque forming part of the same transaction was dishonoured or at the place where the property which the person cheated was dishonestly induced to deliver or at the

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place where the accused received such property. These provisions make it clear that in the commercial world a party who is cheated and induced to deliver property on the basis of a cheque which is dishonoured has the remedy of instituting prosecution not only at the place where the cheque was dishonoured which at times may be a place other than the place where the inducement or cheating takes place but also at the place where the offence of cheating was committed. To that extent the provisions of Chapter XIII of the Code will bear relevance and help determine the place where the offences can be tried. xxx xxx xxx xxx xxx

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50(17). In this analysis we hold that the place, situs or venue of judicial inquiry and trial of the offence must logically be restricted to where the drawee bank, is located. The law should not be warped for commercial exigencies. As it is Section 138 of the NI Act has introduced a deeming fiction of culpability, even though, Section 420 is still available in case the payee finds it advantageous or convenient to proceed under that provision. An interpretation should not be imparted to Section 138 which will render it as a device of harassment i.e. by sending notices from a place which has no casual connection with the transaction itself, and/or by presenting the cheque(s) at any of the banks

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where the payee may have an account. In our discernment, it is also now manifest that traders and businessmen have become reckless and incautious in extending credit where they would heretofore have been extremely hesitant, solely because of the availability of redress by way of criminal proceedings. It is always open to the creditor to insist that the cheques in question be made payable at a place of the creditor’s convenience. Today’s reality is that the every Magistracy is inundated with prosecutions under Section 138 NI Act, so much so that the burden is becoming unbearable and detrimental to the disposal of other equally pressing litigation. We think that Courts are not required to twist the law to give relief to incautious or impetuous persons; beyond Section 138 of the NI Act.

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xxx xxx xxx xxx xxx

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52(19). The interpretation of Section 138 of the NI Act which commends itself to us is that the offence contemplated therein stands committed on the dishonor of the cheque, and accordingly the JMFC at the place where this occurs is ordinarily where the Complaint must be filed, entertained and tried. The cognizance of the crime by the JMFC at that place however, can be taken only when the concomitants or constituents contemplated by the Section concatenate with each other. We clarify that the place of the issuance or delivery of the statutory

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notice or where the Complainant chooses to present the cheque for encashment by his bank are not relevant for purposes of territorial jurisdiction of the Complaints even though noncompliance thereof will inexorably lead to the dismissal of the complaint. It cannot be contested that considerable confusion prevails on the interpretation of Section 138 in particular and Chapter XVII in general of the NI Act. The vindication of this view is duly manifested by the decisions and conclusion arrived at by the High Courts even in the few cases that we shall decide by this judgment. We clarify that the Complainant is statutorily bound to comply with Section 177 etc. of the CrPC and therefore the place or situs where the Section 138 Complaint is to be filed is not of his choosing. The territorial jurisdiction is restricted to the Court within whose local jurisdiction the offence was committed, which in the present context is where the cheque is dishonoured by the bank on which it is drawn.”

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Learned counsel for the petitioner placed the amendment to the N.I. Act which was brought by way of the Negotiable Instruments (Amendment) Act, 2015. The provision under section 142(2) of the N.I. Act was inserted which came into force on 15.06.2015 which reads as follows:-

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“ 142(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 though 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

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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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Considering the ratio of the decision in case of Dashrath Rupsingh Rathod (supra) as well as the recent amendment by way of inserting Section 142(2) of the N.I. Act and also looking at the facts and circumstances of the case, since the parties belong to Dhenkanal and the cheque was drawn at Dhenkanal and was also presented at Union Bank of India, Sogar Branch, Dhenkanal for encashment where it was dishonoured, I am of the view that in the interest of justice, the complaint case should be transferred from the Court of learned S.D.J.M. (Sadar), Cuttack to the Court of learned S.D.J.M., Dhenkanal.

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Accordingly, the TRPCRL petition is allowed. The complaint case bearing I.C.C. Case No.36 of 2008 is directed to be transferred from the Court of learned S.D.J.M. (Sadar), Cuttack to the Court of learned S.D.J.M., Dhenkanal for trial in accordance with law.

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A copy of the order be sent to the learned S.D.J.M. (Sadar), Cuttack, on receipt of which he shall transmit the case records of I.C.C. Case No.36 of 2008 to the Court of learned S.D.J.M., Dhenkanal for trial. A copy of the order be also sent to the learned S.D.J.M., Dhenkanal for intimation and to do the needful.

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Orissa High Court, Cuttack The 30^th August, 2016/Sisir

Tapan Kumar Nayak v. Biswanath Sahu

Case brief

What is this about?

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Tapan Kumar Nayak v. Biswanath Sahu

Case brief

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