Wednesday, 2 December 2015

Whether NI Act Ordinance 2015 is Retrospective?

We are in complete agreement with the contention advanced
at the hands of the learned counsel for the appellant. We are
satisfied, that Section 142(2)(a), amended through the Negotiable
Instruments (Amendment) Second Ordinance, 2015, vests jurisdiction
for initiating proceedings for the offence under Section 138 of the
Negotiable Instruments Act, inter alia in the territorial
jurisdiction of the Court, where the cheque is delivered for
collection (through an account of the branch of the bank where the
payee or holder in due course maintains an account). We are also
satisfied, based on Section 142A(1) to the effect, that the
judgment rendered by this Court in Dashrath Rupsingh Rathod’s case,
would not stand in the way of the appellant, insofar as the
territorial jurisdiction for initiating proceedings emerging from
the dishonor of the cheque in the present case arises.
REPORTABLE
IN THE SUPREME COURT OF INDIA
 CRIMINAL APPELLATE JURISDICTION
 CRIMINAL APPEAL No.1557 OF 2015
(Arising out of SLP(Crl.)No.7850 of 2011)
M/S BRIDGESTONE INDIA PVT. LTD. .......APPELLANT
VERSUS
INDERPAL SINGH .......RESPONDENT
WITH
 CRIMINAL APPEAL No.1562 OF 2015
 (Arising out of SLP(Crl.)No.9758 of 2011)
Dated;NOVEMBER 24, 2015.



2. Despite service, no one has entered appearance on behalf
of the respondent.
3. A cheuqe No.1950, drawn on the Union Bank of India,
Chandigarh, was issued by Inderpal Singh (the respondent herein) to
the appellant - M/s Bridgestone India Pvt.Ltd. The cheque was in
the sum of Rs.26,958/-. The appellant - M/s Bridgestone India
Pvt.Ltd. presented the above cheque at the IDBI Bank in Indore.
The appellant received intimation of its being dishonoured on
account of “…exceeds arrangement…” on 04.08.2006 at Indore.
4. The appellant issued a legal notice on 26.08.2006, which
was served on the respondent – Inderpal Singh on 06.09.2006,
demanding the amount depicted in the cheque. The appellant informed
the respondent, that he would be compelled to initiate proceedings
under Section 138 of the Negotiable Instruments Act, 1881, if
payment was not made by the respondent within 15 days from the date
of receipt of the legal notice.
5. Consequent upon the issuance of the aforementioned legal
notice wherein the respondent was required to reimburse the cheuqe
amount to the appellant, and the respondent having failed to
discharge his obligation, proceedings were initiated by the
appellant on 13.10.2006 in the Court of the Judicial Magistrate,
First Class, Indore, under Section 138 of the Negotiable
Instruments Act, 1881.
6. The accused-respondent - Inderpal Singh, preferred an
application before the Judicial Magistrate, First Class, Indore,
Madhya Pradesh, under Section 177 of the Criminal Procedure Code,
contesting the territorial jurisdiction with respect to the above
cheque drawn on the Union Bank of India, Chandigarh. The prayer
made by the respondent, that the Judicial Magistrate, First Class,
Indore, did not have the jurisdiction to entertain the proceedings
initiated by the appellant – M/s Bridgestone Indian Pvt.Ltd. was
declined on 02.06.2009. The Judicial Magistrate, First Class,
Indore, relied on the judgment rendered by this Court inPage 3
3
K.Bhaskaran vs. Sankaran Vaidhyan Balan and another, AIR 1999 SC
3762, to record a finding in favour of the appellant. Dissatisfied
with the order passed by the Judicial Magistrate, First Class,
Indore, dated 02.06.2009, the respondent-Inderpal Singh preferred a
petition under Section 482 of the Criminal Procedure Code, in the
High Court of Madhya Pradesh before its Indore Bench. Having
examined the controversy in hand and keeping in mind the fact, that
a number of documents were presented by the respondent – Inderpal
Singh during the course of hearing before the High Court, by an
order dated 03.12.2009, the petition filed by the accusedrespondent
was disposed of, by remitting the case to the Judicial
Magistrate, First Class, Indore, requiring him to pass a fresh
order after taking into consideration the additional documents
relied upon, and the judgments cited before the High Court.
7. The Judicial Magistrate, First Class, Indore, yet again,
by an order dated 11.01.2010 held, that he had the territorial
jurisdiction to adjudicate upon the controversy raised by the
appellant – M/s Bridgestone India Pvt.Ltd. under Section 138 of the
Negotiable Instruments Act, 1881. The decision rendered by the
Judicial Magistrate, First Class, Indore, was again assailed by the
accused-respondent in yet another petition filed by him under
Section 482 of the Criminal Procedure Code, in the High Court of
Madhya Pradesh before its Indore Bench. The High Court accepted the
prayer made by the accused-respondent - Inderpal Singh by holding,
that the jurisdiction lay only before the Court wherein the
original drawee bank was located, namely, at Chandigarh, where-from
the accused-respondent had issued the concerned cheque bearingPage 4
4
No.1950, drawn on the Union Bank of India, Chandigarh.
8. Dissatisfied with the order passed by the High Court of
Madhya Pradesh, dated 05.05.2011, the appellant has approached this
Court through the instant appeal.
9. During the course of hearing, learned counsel for the
appellant cited the decision rendered by a three-Judge Bench of
this Court in Dashrath Rupsingh Rathod vs. State of Maharashtra and
another, (2014) 9 SCC 129, and pointedly invited our attention to
the conclusions drawn by this Court in paragraph 58, which is
extracted hereunder:
“58. To sum up:
58.1 An offence under Section 138 of the Negotiable
Instruments Act, 1881 is committed no sooner a cheque
drawn by the accused on an account being maintained by him
in a bank for discharge of debt/liability is returned
unpaid for insufficiency of funds or for the reason that
the amount exceeds the arrangement made with the bank.
58.2 Cognizance of any such offence is however
forbidden under Section 142 of the Act except upon a
complaint in writing made by the payee or holder of the
cheque in due course within a period of one month from the
date the cause of action accrues to such payee or holder
under clause (c) of proviso to Section 138.
58.3 The cause of action to file a complaint accrues
to a complainant/payee/holder of a cheque in due course if
(a) the dishonoured cheque is presented to
the drawee bank within a period of six
months from the date of its issue.
(b) If the complainant has demanded
payment of cheque amount within thirty
days of receipt of information by him from
the bank regarding the dishonour of
the cheque, and
(c) If the drawer has failed to pay the
cheque amount within fifteen days of
receipt of such notice.Page 5
5
58.4 The facts constituting cause of action do not
constitute the ingredients of the offence under Section
138 of the Act.
58.5 The proviso to Section 138 simply
postpones/defers institution of criminal proceedings and
taking of cognizance by the court till such time cause of
action in terms of clause (c) of proviso accrues to the
complainant.
58.6 Once the cause of action accrues to the
complainant, the jurisdiction of the Court to try the case
will be determined by reference to the place where the
cheque is dishonoured.
58.7 The general rule stipulated under Section 177
CrPC applies to cases under Section 138 of the
Negotiable Instruments Act. Prosecution in such cases
can, therefore, be launched against the drawer of the
cheque only before the court within whose jurisdiction
the dishonour takes place except in situations
where the offence of dishonour of the cheque punishable
under Section 138 is committed along with other offences
in a single transaction within the meaning of Section
220(1) read with Section 184 of the Code of Criminal
Procedure or is covered by the provisions of Section
182(1) read with Sections 184 and 220 thereof.”
In view of the decision rendered by this Court in Dashrath Rupsingh
Rathod’s case, it is apparent, that the impugned order dated
05.05.2011, passed by the High Court of Madhya Pradesh, Bench at
Indore, was wholly justified.
10. In order to overcome the legal position declared by this
Court in Dashrath Rupsingh Rathod’s case, learned counsel for the
appellant has drawn our attention to the Negotiable Instruments
(Amendment) Second Ordinance, 2015 (hereinafter referred to as `the
Ordinance'). A perusal of Section 1(2) thereof reveals, that the
Ordinance would be deemed to have come into force with effect from
15.06.2015. It is therefore pointed out to us, that the Negotiable
Instruments (Amendment) Second Ordinance, 2015 is in force. OurPage 6
6
attention was then invited to Section 3 thereof, whereby, the
original Section 142 of the Negotiable Instruments Act, 1881, came
to be amended, and also, Section 4 thereof, whereby, Section 142A
was inserted into the Negotiable Instruments Act. Sections 3 and 4
of the Negotiable Instruments (Amendment) Second Ordinance, 2015
are being extracted hereunder:
“3. In the principal Act, section 142 shall be
numbered as sub-section (1) thereof and after sub-section
(1) as so numbered, the following sub-section shall be
inserted, namely:-
 (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.”
4. In the principal Act, after section 142, the following
section shall be inserted, namely:-
142A. (1) Notwithstanding anything contained in the
Code of Criminal Procedure, 1973 or any judgment,
decree, order or directions of any court, all cases
transferred to the court having jurisdiction under
sub-section (2) of section 142, as amended by the
Negotiable Instruments (Amendment) Ordinance, 2015,
shall be deemed to have been transferred under this
Ordinance, as if that sub-section had been in forcePage 7
7
at all material times.
(2) Notwithstanding anything contained in subsection
(2) of section 142 or sub-section (1),
where the payee or the holder in due course, as the
case may be, has filed a complaint against the
drawer of a cheque in the court having jurisdiction
under sub-section (2) of section 142 or the case
has been transferred to that court under subsection
(1), and such complaint is pending in that
court, all subsequent complaints arising out of
section 138 against the same drawer shall be filed
before the same court irrespective of whether those
cheques were delivered for collection or presented
for payment within the territorial jurisdiction of
that court.
(3) If, on the date of the commencement of this
Ordinance, more than one prosecution filed by the
same payee or holder in due course, as the case may
be, against the same drawer of cheques is pending
before different courts, upon the said fact having
been brought to the notice of the court, such court
shall transfer the case to the court having
jurisdiction under sub-section (2) of section 142,
as amended by the Negotiable Instruments
(Amendment) Ordinance, 2015, before which the first
case was filed and is pending, as if that subsection
had been in force at all material times.”
 (Emphasis is ours)

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, where the drawee maintains an account,
would be determinative of the place of territorial jurisdiction.
11. It is, however, imperative for the present controversy,
that the appellant overcomes the legal position declared by this
Court, as well as, the provisions of the Code of CriminalPage 8
8
Procedure. Insofar as the instant aspect of the matter is
concerned, a reference may be made to Section 4 of the Negotiable
Instruments (Amendment) Second Ordinance, 2015, whereby Section
142A was inserted into the Negotiable Instruments Act. A perusal
of Sub-section (1) thereof leaves no room for any doubt, that
insofar as the offence under Section 138 of the Negotiable
Instruments Act is concerned, on the issue of jurisdiction, the
provisions of the Code of Criminal Procedure, 1973, would have to
give way to the provisions of the instant enactment on account of
the non-obstante clause in sub-section (1) of Section 142A.
Likewise, any judgment, decree, order or direction issued by a
Court would have no effect insofar as the territorial jurisdiction
for initiating proceedings under Section 138 of the Negotiable
Instruments Act is concerned. In the above view of the matter, we
are satisfied, that the judgment rendered by this Court in
Dashrath Rupsingh Rathod’s case would also not non-suit the
appellant for the relief claimed.
12. We are in complete agreement with the contention advanced
at the hands of the learned counsel for the appellant. We are
satisfied, that Section 142(2)(a), amended through the Negotiable
Instruments (Amendment) Second Ordinance, 2015, vests jurisdiction
for initiating proceedings for the offence under Section 138 of the
Negotiable Instruments Act, inter alia in the territorial
jurisdiction of the Court, where the cheque is delivered for
collection (through an account of the branch of the bank where the
payee or holder in due course maintains an account). We are also
satisfied, based on Section 142A(1) to the effect, that the
judgment rendered by this Court in Dashrath Rupsingh Rathod’s case,
would not stand in the way of the appellant, insofar as the
territorial jurisdiction for initiating proceedings emerging from
the dishonor of the cheque in the present case arises.
13. Since cheque No.1950, in the sum of Rs.26,958/-, drawn on
the Union Bank of India, Chandigarh, dated 02.05.2006, was
presented for encashment at the IDBI Bank, Indore, which intimated
its dishonor to the appellant on 04.08.2006, we are of the view
that the Judicial Magistrate, First Class, Indore, would have the
territorial jurisdiction to take cognizance of the proceedings
initiated by the appellant under Section 138 of the Negotiable
Instruments Act, 1881, after the promulgation of the Negotiable
Instruments (Amendment) Second Ordinance, 2015. The words “...as
if that sub-section had been in force at all material times...”
used with reference to Section 142(2), in Section 142A(1) gives
retrospectivity to the provision.
14. In the above view of the matter, the instant appeal is
allowed, and the impugned order passed by the High Court of Madhya
Pradesh, by its Indore Bench, dated 05.05.2011, is set aside. The
parties are directed to appear before the Judicial Magistrate,
First Class, Indore, on 15.01.2016. In case the complaint filed by
the appellant has been returned, it shall be re-presented before
the Judicial Magistrate, First Class, Indore, Madhya Pradesh, on
the date of appearance indicated hereinabove.Page 10
10
Criminal Appeal No.1562 of 2015 (Arising out of SLP(Crl.)No.9758 of
2011), Criminal Appeal No.1563 of 2015 (Arising out of SLP(Crl.)
No. 10019 of 2011) and Criminal Appeal No.1564 of 2015 (Arising
out of SLP(Crl.)No.10020 of 2011)
1. Leave granted.
2. Despite service, no one has entered appearance on behalf
of the respondent.
3. Learned counsel for the appellant states, that the
controversy raised in the instant appeals is identical to the one
adjudicated upon by this Court in Criminal Appeal No.1557 of 2015
(Arising out of SLP(Crl.)No.7850 of 2011)[M/s Bridgestone India
Pvt.Ltd. vs. Inderpal Singh] on 24.11.2015. The instant appeals are
accordingly allowed in terms of the order passed by this Court in
in Criminal Appeal No.1557 of 2015 [M/s Bridgestone India Pvt.Ltd.
vs. Inderpal Singh] on 24.11.2015.

 ..........................J.
 (JAGDISH SINGH KHEHAR)



 ..........................J.
 (R. BANUMATHI)
NEW DELHI;
NOVEMBER 24, 2015.
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