# Ankush Jain v. State Of U.P. & Anr

- **Citation:** (2016) 8 ILRA 632
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2016-08-29
- **Bench:** Mrs. Vijay Lakshmi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ankush-jain-v-state-of-u-p-anr-44366
- **Pages:** 8

## Text

632 INDIAN LAW REPORTS ALLAHABAD SERIES

(2016) 8 ILRA 632
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 29.08.2016

BEFORE

THE HON'BLE MRS. VIJAY LAKSHMI, J.

Application U/S 482 No.- 24718 Of 2016
&
Application U/S 482 No.- 24719 Of 2016

Ankush Jain ...Applicant
Versus
State Of U.P. & Anr. ...Opposite Parties

Counsel for Applicant:
Amit Daga

Counsel for Opposite Parties:
G.A.

Legislation referred to : Negotiable Instruments Act, 1881 - Ss. 138, 142, 142(2)(a) & (b), 142-A, 145;
Code of Criminal Procedure, 1973 - Ss. 200, 406, 482.

FACTS :
The complainant-company (O.P. No. 2), a Private Limited Company registered under the Companies Act,
alleged that during the course of business transactions since 2011, the accused-applicant issued two cheques
bearing Nos. 000010 and 000011, each dated 31.12.2014 and each for Rs. 35 lakhs, drawn on Bank of
Baroda, Shalimar Garden Branch, Ghaziabad, in favour of the complainant-company. Both cheques were
deposited by the complainant-company in its account maintained with Punjab and Sindh Bank, Narayana, New
Delhi, and were returned dishonoured with the endorsement „xceeds arrangement" vide Bank Memo dated
1.1.2015.

Statutory notices under Section 138 N.I. Act were served upon the applicant on 13.1.2015. The applicant,
instead of making payment, replied by letter dated 22.1.2015 denying liability. Thereupon, complaints under
Section 138 N.I. Act were filed before the Judicial Magistrate, Ghaziabad, supported by an affidavit of the
Director of the complainant-company filed as statement under Section 200 Cr.P.C. read with Section 145 N.I.
Act. The learned Magistrate, on the basis of the said affidavit and documents, summoned the applicant vide
order dated 25.4.2015.

The applicant filed two applications under Section 482 Cr.P.C. before this Court praying to quash both the
complaints and the summoning orders, primarily contending that by virtue of the amended Section 142(2) of
the N.I. Act (which came into force w.e.f. 15.6.2015 with retrospective effect), the Court at Ghaziabad lacked
territorial jurisdiction to entertain the complaints, since the complainant-company maintained its account at
Delhi, and therefore the proceedings at Ghaziabad constituted an abuse of the process of court.
8 All. Ankush Jain Vs State Of U.P. & Anr.
633
QUESTIONS OF LAW :
(i) Whether, in view of the amended Section 142(2) of the Negotiable Instruments Act, 1881 (as amended
w.e.f. 15.6.2015), the territorial jurisdiction to try an offence under Section 138 N.I. Act vests in the court
within whose local limits the branch of the bank where the payee maintains its account (i.e., the branch of
delivery of the cheque for collection) is situated, even in respect of complaints filed prior to the amendment?
(ii) Whether, on account of lack of territorial jurisdiction arising from the retrospective amendment to Section
142(2) N.I. Act, a complaint under Section 138 N.I. Act pending before a court that has lost jurisdiction is
liable to be quashed under Section 482 Cr.P.C., or whether it is required to be transferred to the court of
competent jurisdiction in terms of Section 142-A N.I. Act?

HELD :
(i) Territorial Jurisdiction under Amended Section 142(2) N.I. Act - By virtue of the amended
Section 142(2) of the Negotiable Instruments Act, 1881, the offence under Section 138 N.I. Act shall be
inquired into and tried only by a court within whose local jurisdiction the branch of the bank where the payee
or holder in due course maintains its account - i.e., the branch at which the cheque is delivered for collection
- is situated. The Explanation to Section 142(2)(a) further clarifies that where a cheque is delivered for
collection at any branch of the payee's bank, it shall be deemed to have been delivered to the branch where
the payee maintains the account. Accordingly, since the complainant-company maintained its account with
Punjab and Sindh Bank, Narayana, New Delhi, territorial jurisdiction vests in the competent court at Delhi, and
not at Ghaziabad.
(ii) No Ground for Quashing - Remedy is Transfer under Section 142-A N.I. Act - Lack of
territorial jurisdiction, arising on account of the retrospective application of the amended Section 142(2) N.I.
Act, does not furnish a ground to quash proceedings under Section 482 Cr.P.C. The Legislature, while enacting
the Negotiable Instruments (Amendment) Act, 2015, simultaneously inserted Section 142-A, which mandates
that all cases pending before any court on 15.6.2015, whether filed before it or transferred to it prior to that
date, shall be transferred to the court having jurisdiction under amended Section 142(2). Since the complaints
in the present case were filed on 5.2.2015 and were admittedly pending when the Amending Act came into
force on 15.6.2015, Section 142-A is clearly attracted and the proceedings are required to be transferred to
Delhi, not quashed. Quashing or staying the proceedings would cause grave prejudice to the payee/creditor
and would be contrary to the express legislative intent behind the Amendment.
(iii) Legislative Intent of the 2015 Amendment - Protection of Creditors - The Negotiable
Instruments (Amendment) Act, 2015 was enacted to neutralise the effect of the judgment of the Supreme
Court in Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129, which had restricted
jurisdiction to the court within whose local limits the cheque was dishonoured by the drawee bank - causing
serious hardship to payees who were compelled to litigate at the place chosen by the defaulter/drawer. The
Amendment Act, incorporating the non-obstante clause in Section 142-A(1), makes the provisions of the Code
of Criminal Procedure yield to the N.I. Act insofar as territorial jurisdiction over cheque dishonour offences is
concerned. The overriding intent of the Legislature is to protect creditors and payees and not to afford
procedural refuge to defaulting drawers.
(iv) Inter-State Transfer - Jurisdiction of Supreme Court under Section 406 Cr.P.C. - Since the
transfer of complaints from Ghaziabad (U.P.) to Delhi involves an inter-State transfer, this Court does not
possess jurisdiction to order such transfer. The power to transfer criminal cases from one State to another
vests exclusively in the Supreme Court of India under Section 406 of the Code of Criminal Procedure, 1973.
The complainant-company/O.P. No. 2 is accordingly at liberty to apply to the Supreme Court for transfer of
the complaints to the competent court at Delhi.

RESULT :
Both applications under Section 482 Cr.P.C. dismissed. The pending proceedings in both complaint cases
before the Additional Civil Judge (J.D.)/J.M. Court No. 3, Ghaziabad, are not quashed but are liable to be
transferred to the court of competent jurisdiction at Delhi under Section 142-A of the N.I. Act. The
634 INDIAN LAW REPORTS ALLAHABAD SERIES

complainant-company/O.P. No. 2 is at liberty to take steps for inter-State transfer of the complaints by
approaching the Supreme Court of India under Section 406 Cr.P.C. The office is directed to send a copy of this
order to the concerned Magistrate at Ghaziabad through the District Judge, Ghaziabad, who shall in turn
inform the complainant-company of this order.

Cases Referred:
Bridgestone India Pvt. Ltd. v. Inderpal Singh, (2016) 2 SCC 75;
Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129.

(Delivered by Hon'ble Mrs. Vijay Lakshmi, J.)

1. The applicant, who is the same person in both the aforesaid applications filed under
Section 482 Cr.P.C., has invoked the inherent jurisdiction of this Court with prayer to quash the
criminal complaint dated 4.2.1015 as well as entire proceedings of Complaint Case No. 196 of 2016
(initially numbered as Complaint Case No. 162 of 2015) and Complaint Case No. 195 of 2016
(initially numbered as Complaint Case No. 163 of 2015) A.N. Polymers Pvt. Ltd. Vs. Ankush Jain,
under Sections 138 of N.I. Act, P.S. Shahibabad, district Ghaziabad, pending in the court of
Additional Civil Judge (J.D.)/ J.M. Court No. 3, Ghaziabad. Prayer has also been made to quash the
summoning order dated 25.4.2015 issued against the applicant by the aforesaid court in both the
complaint cases.

2. As the applicant, the opposite parties and the issue involved in both the applications, are
the same, both these applications are being disposed of by this common order.

3. Heard learned counsel for the applicant and learned A.G.A. for the State. Perused the
records.

4. The brief facts of the case are that the complainant of both the complaint cases, who is
O.P. No. 2 in both these applications, is a Private Limited Company, registered under the Indian
Companies Act. The aforesaid Company filed criminal complaints against the accused- applicant
with the allegations that the complainant company was doing business with the accused- applicant
since 2011. During the course of business transactions, the accused- applicant, issued two cheque
nos. 000010 and 000011 each dated 31.12.2014 and each amounting to Rs. 35 lacs, in the name of
the complainant Company payable at Bank of Baroda, Branch Shalimar Garden, Ghaziabad. Both
the said cheques were deposited in Punjab and Sindh Bank, Narayana, New Delhi, where the
complainant Company was maintaining its account. However, both the cheques were dishonoured
by the Banker of the accused- applicant and consequently the Banker of the complainant Company
returned both the cheques with the endorsement "exceeds arrangement" along with Bank memo
dated 1.1.2015. Thereafter the complainant Company, being payee of the dishonoured cheques,
gave legal notices to the accused applicant on 13.1.2015. But, the accused applicant, instead of
making payment of the amounts of the cheques in question within the stipulated period mentioned
in the legal demand notices, replied to the said notices by his letter dated 22.1.2015, denying the
payment to the complainant. Since the accused applicant, despite service of demand notices, failed
to make payment of the amount mentioned in the cheques in question, the complainant Company
8 All. Ankush Jain Vs State Of U.P. & Anr.
635
filed the aforementioned complaints against the applicant in the court of the Judicial Magistrate. In
support of the complaint, the complainant Company/ O.P. No. 2, filed some documents and
affidavit of the Director of the Company as its statement under section 200 Cr.P.C. and it was
entitled to do so by virtue of section 145 of the N.I. Act.

5. The learned Magistrate on the basis of the aforesaid affidavit and the documents filed by
the complainant Company in support of its allegations, summoned the applicant for the offences
punishable under section 138 of the N.I. Act vide impugned order dated 25.4.2015.

6. The legality and correctness of the aforesaid summoning orders passed by learned
Magistrate, Ghaziabad, has been challenged by learned counsel for the accused-applicant, in both
these applications, mainly on the ground that in view of the amendment of section 142 of the N.I.
Act, which has come into force w.e.f. 15.6.2015 and is having retrospective effect, the learned
Magistrate at Ghaziabad, has no jurisdiction to entertain the complaints instituted by the
complainant Company and to proceed against the accused- applicant on the said complaint. Learned
counsel for the applicant has contended that in view of amended section 142(2) of the Act, learned
Magistrate at Ghaziabad is not the competent court having jurisdiction to take cognizance and to
issue process against the accused applicant and the entire proceedings pending before the court at
Ghaziabad, which are wholly without jurisdiction, cannot be permitted to continue, as the same
would amount to gross abuse of process of court and law and the same are liable to be quashed by
this court on the ground of jurisdiction alone.

7. Some factual aspects of the case have also been contested by learned counsel for the
applicant submitting that both the cheques, which are dated 31.12.2014, drawn at Bank of Baroda,
Branch Shalimar Garden, Ghaziabad, each amount of Rs. 35 lacs, were the security cheques given
by the accused- applicant to O.P. No. 2 earlier and none of these cheques was issued in discharge of
any liability or debt. The complainant Company misused the aforesaid security cheques to initiate
malicious proceedings against the applicant, only for the purpose of harassment and to extort
money from him. It is also submitted that the applicant had made a detailed complaint to the
complainant Company earlier that the material supplied by it was defective due to which the
material was lying in their godown, whereupon the Director of the complainant Company had
assured that the said defective material will be taken back shortly from the godown of the applicant
but despite repeated requests, the defective material was not removed by the complainant Company
from the godown of the applicant and subsequently the applicant gave a legal notice to the
complainant Company, informing the complainant Company, not to present the security cheques to
the Banker of the Company because the applicant had stopped the payment of said security
cheques. However, despite the aforesaid legal notice the complainant Company misused those
cheques.

8. Learned counsel for the applicant has submitted that considering all these facts and since
the proceedings of the aforesaid complaints are beyond territorial jurisdiction and against the
mandates of the amended section 142(2) of the N.I. Act, the court of learned Magistrate at
636 INDIAN LAW REPORTS ALLAHABAD SERIES

Ghaziabad has acted without jurisdiction and thus the impugned summoning orders as well as entire
proceedings of the complaint cases are liable to be quashed.

9. In support of his contention the learned counsel for the applicant has placed reliance on
the law laid down by the Hon'ble Apex Court Bridgestone India Pvt. Ltd. Vs. Inderpal Singh
(2016) 2 SCC 75, in which Hon'ble Apex Court has held as under:

"A perusal of the amended Section 142 (2), extracted above, 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, 1881, the place where a cheque is delivered for
collection i.e. the branch of the bank of the payee or holder in due course, would be determinative
of the place of territorial jurisdiction and the provisions of Code of Criminal Procedure, 1973,
would have to give way to the provisions of instant enactment on account of the non obstante clause
in subsection (1) of section 142-A of the N.I. Act."

10. The learned counsel has submitted that in similar matters coordinate Bench of this court
has stayed the further proceedings of the complaint case under section 138 of the N.I. Act, keeping
in view the aforesaid judgment of the Hon'ble Apex Court and the amended provisions of the N.I.
Act.

11. Considered the submissions and carefully perused the judgment rendered by the Apex
Court in the case of Bridgestone India Pvt. Ltd. (supra) and also the Gazette of India dated
15.6.2015 issued by the Ministry of Law and Justice, New Delhi, to amend the N.I. Act 1881.

12. In order to properly appreciate the controversy involved in the instant case, the relevant
provisions of the amended section 142(2) of the N.I. Act are reproduced below:-

"142(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.".
8 All. Ankush Jain Vs State Of U.P. & Anr.
637
13. The aforesaid amendment in N.I. Act was brought in view of the pendency of an
estimated 18 lakh cheque bounce cases across the country. The litigants, who were already deprived
of their money by the borrower, have to travel to different places from where the cheques were
issued and dishonoured, thus denying them justice, equity and fair trial, adding more insult to their
injury.

14. Earlier, Hon'ble Supreme Court in its judgment in the case of Dashrath Rupsingh
Rathod Vs. State of Maharashtra (2014) 9 SCC 129 had held that the jurisdiction for dishonour
of cheques is restricted to the court within whose local jurisdiction, the offence was committed i.e.
where the cheque is dishonoured by the Bank on which it is drawn.

15. Pursuant to the said judgment of the Apex Court, a number of pending cases under
section 138 of N.I. Act were transferred to the courts having jurisdiction as per the said judgment.

16. Various representations were made to the Government by Industry Association and
financial institutions, expressing their concerns about wide impact of the said judgment on the
business interest since the same would offer undue protection to defaulters at the expense of
complainants. Hence the Legislature, with a view to protect the interest of the creditors, passed the
Amending Act, which clearly provides that except bearer cheques, which are presented to the
branch of the drawee bank, (in which cases, the local court of drawee bank would get jurisdiction),
the jurisdiction to try the offence of cheque bouncing, shall lie with the court within whose local
jurisdiction the bank branch of the payee, where the payee delivers the cheque for payment through
his account, is situated.

17. Thus, in view of the amendment in the N.I. Act, there is no doubt that the jurisdiction to
try the instant case vests in the Court situated at Delhi where the O.P. No. 2 or the complainant
Company, who is the payee or holder in due course, maintains its account.

18. Now the question, which arise for consideration is that whether both these complaints
and the entire proceeding are liable to be quashed on account of lack of jurisdiction as prayed by
the applicant?

19. The answer would obviously be "No".

20. Keeping in view of the intention of the Legislature behind passing of the Amending
Act, which is to protect the interest of the creditor or the payee and not of the borrower, and the
provisions of Amending Act, the proceedings of complaint cannot be quashed. If the proceedings
are quashed only due to lack of territorial jurisdiction or even are stayed for sometime, calling for
counter and rejoinder affidavits, it will cause great difficulty to the litigant, who is already facing
problem, being deprived of his money due to bouncing of cheque drawn by the borrower.

21. To deal with such situation, the Legislature by the Amending Act of 2015 has inserted a
new section 142-A in Negotiable Instrument Act, making provision for transfer of pending cases.
638 INDIAN LAW REPORTS ALLAHABAD SERIES

The newly inserted section 142-A provides that all cases pending before any court, whether filed
before it or transferred to it before 15.6.2015, shall be transferred to the courts having jurisdiction.

22. In the present case, a perusal of the complaint, the copy whereof has been annexed in
both the applications and copy of order sheet of the court proceedings, which is Annexure no. 5 in
both the applications, shows that the complaint under the N.I. Act has been filed on 5.2.2015,
meaning thereby that the complaint was pending on the date 15.6.2015 when the Amending Act
came into force. Therefore, the proceedings pending at Ghaziabad, deserves to be transferred from
Ghaziabad to Delhi where the complainant Company is maintaining its account and no ground to
quash those proceedings is made out.

23. In view of the above, both the instant applications are dismissed.

24. As this court cannot order for inter State transfer, the jurisdiction being only with the
Hon'ble Apex Court by virtue of section 406 Cr.P.C., it is open for the complainant/ O.P. No. 2 to
take steps for transfer of his complaint to Delhi.

25. The office is directed to send a copy of this order to the concerned Magistrate at
Ghaziabad, through the District Judge, Ghaziabad. The concerned Magistrate is further directed to
inform the complainant about this order so that the complainant may take necessary steps for
transfer of his complaints to Delhi.
----------
8 All. Mahesh Tiwari Vs State Of U.P. & Anr.
639
(2016) 8 ILRA 639
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 24.08.2016

BEFORE

THE HON'BLE SUNEET KUMAR, J.

Application U/S 482 No.- 12840 Of 2016

Mahesh Tiwari ...Applicant
Versus
State Of U.P. & Anr. ...Opposite Parties

Counsel for Applicant:
Chetan Chatterjee

Counsel for Opposite Parties:
G.A, Amit Kumar Srivastava.

Legislation referred to : Code of Criminal Procedure, 1973 - Sections 190, 195(1)(b)(i), 200, 202, 340,
341, 482
Indian Penal Code, 1860 - Sections 191, 192, 193
Indian Evidence Act, 1872 - Sections 1 and 3
Code of Civil Procedure, 1908 - Section 30; Order XIX, Rules 1 and 2.

FACTS :
The applicant instituted Suit No. 94 of 2013 for permanent injunction against the complainant/opposite party
no. 2. The plaint was supported by an affidavit sworn by the applicant stating facts to be true to his personal
knowledge. In paragraph 16 of the said affidavit, it was averred that on 26 July 2013, the opposite party
threatened the principal of the college to remove the wall, failing which the wall would be removed by force.

The complainant/opposite party no. 2 assailed this averment as false, contending that she was abroad in the
USA from 18 May 2013 to 10 September 2013 and could not have made any such threat on the said date. She
filed an application under Section 340 Cr.P.C. before the Civil Court for initiation of perjury proceedings, which
was dismissed by order dated 18 November 2013 on the ground that the affidavit having been prepared and
sworn outside the court, proceedings under Section 340 Cr.P.C. were impermissible.

Thereafter, the complainant filed a private complaint under Section 190 Cr.P.C. for prosecution of the
applicant under Section 193 IPC. The learned Judicial Magistrate-I, Anwla, Bareilly, upon examining the
complainant under Section 200 and recording the witness's statement under Section 202 Cr.P.C., passed
summoning order dated 17 December 2014. Criminal Revision No. 22 of 2015 filed by the applicant was
dismissed by the Additional Sessions Judge, Court No. 1, Bareilly, vide impugned order dated 31 February
2015. Both orders were challenged under Section 482 Cr.P.C.

Questions of Law