Wednesday 26 March 2014

TERRITORIAL JURISDICTION TO TRY CHEQUE BOUNCE CASES


While hearing a petition challenging the territorial jurisdiction of a court to try an offence under the Negotiable Instruments Act, 1881,the Honorable Supreme Court has held that only a lower court in whose jurisdiction an offence of cheque bounce is committed will try the case.

The Apex court observed that there are numerous instances where complaints are being filed at more than one place to harass an accused and held that the court cannot be oblivious of the fact that a banking institution holding several cheques signed by the same borrower can not only present the cheque for its encashment at four different places but also may serve notices from four different places so as to enable it to file four complaint cases at four different places.This only causes grave harassment to the accused.It is,therefore, necessary to strike a balance between the right of the complainant and the right of an accused vis-a-vis the provisions of the Code of Criminal Procedure in a case of this nature.Jurisdiction of the court to try a criminal case is governed by the provisions of the Criminal Procedure Code and not on common law principle.

The Honorable Court has further observed that the complainants, including financial institutions and banks, while filing cheque bounce cases, should ensure that no inconvenience is caused to the accused.These observations were made by the apex court during the hearing of a case between Harman Electronics and National Panasonic India (NPI) under the Negotiable Instruments Act.

Harman Electronics and NPI had entered into a transaction in Chandigarh and a cheque issued by the former at Chandigarh was dishonoured in the city itself. However, NPI had filed a complaint in Delhi, after issuing a notice from New Delhi to Harman Electronics in Chandigarh, asking the company to pay Rs 5lakh.


The company then questioned the jurisdiction of the Court of Additional Sessions Judge, New Delhi, in the case.The trial court held that it had jurisdiction to entertain the complaint as the notice was sent to the accused from Delhi and the complainant was having its registered office in Delhi. The Apex court while holding the judgement in favor of the company said the Delhi High Court had no jurisdiction to try the case and the same should be transferred to the court of competent jurisdiction.

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