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Attorney(S)

Judges

Mr. V. M. KANADE

Acts

section 138 read with sections 141 and 142 of the Negotiable Instruments, Act.
SECTION 141 NEGOTIABLE INSTRUMENTS ACT

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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

A complaint was filed by respondent No. 1 (a company) in the 14th Court, Girgaum, Mumbai (Case No. 453/SS/2006) under section 138 read with sections 141 and 142 of the Negotiable Instruments Act. It is alleged that accused Nos. 2 and 3 placed an order on 10th December, 2005, goods were supplied and received, and bills were sent. A cheque dated 22nd April, 2006 for Rs. 44,52,238/- (drawn on Punjab National Bank, Alipur Chetla, Kolkata) was issued to respondent No. 1 and deposited by respondent No. 1 in HDFC Bank, Fort Branch, Mumbai, but was returned unpaid with the remark "Exceeds arrangements". The dishonour was intimated on 27th April, 2006 and a notice was issued; no reply was given.

The accused (petitioner) initially filed an application under section 201(a) Cr.P.C. which the Magistrate rejected by order dated 14th October, 2008. A second application under section 201(a) was later filed in the same Court. The Magistrate, relying on a subsequent judgment (Harman Electronics (P) Ltd. v. National Panasonic (India) Ltd.), entertained the second application, concluded that the order was placed and goods and cheque were issued at the complainant's Kolkata branch, and returned the complaint for presentation before the "proper Court".

The complainant (respondent No. 1) filed a Criminal Revision Application in the Sessions Court, which set aside the Magistrate's order on the ground that a Magistrate cannot review his own order (citing section 362 Cr.P.C.) and therefore lacked jurisdiction to entertain the second application. The accused (petitioner) filed the present writ petition challenging the Sessions Court's revision order.

Legal Issues Presented

Whether the learned Magistrate could entertain a second application under section 201(a) Cr.P.C. and effectively review his earlier reasoned order dated 14th October, 2008, in light of section 362 Cr.P.C. and subsequent case law (as relied upon by the Magistrate)?
Whether the Magistrate in Mumbai had jurisdiction to try the complaint given that the cheque was drawn on a Kolkata branch account but was deposited and dishonoured in Mumbai and the statutory notice was issued from Mumbai?

Arguments of the Parties

Petitioner's Arguments

The Magistrate was entitled to consider the ratio of the Apex Court judgment in Harman Electronics (P) Ltd. v. National Panasonic (India) Ltd.; in view of that judgment there was a change of circumstance, so the second application did not amount to an impermissible review of its own order under section 362 Cr.P.C.
Reliance was placed on the judgment in Deeptikumar Mohanty v. M/s. Videocon Industries Limited (2009) as supporting the petitioner’s position on jurisdiction/reconsideration.

Respondent No. 1's Arguments

The learned Magistrate could not review his own orders in view of section 362 Cr.P.C., which bars a court from altering or reviewing its signed judgment or final order except to correct clerical or arithmetical errors.
Reliance on K. Bhaskaran v. Shakaran Vaidyan Balan (1999 SCC 510 / 2000(5) Bom.C.R. 178) to submit that the trial Court in Mumbai had jurisdiction to try and decide the complaint.
Reliance on the Division Bench decision in Mrs. Preetha S. Babu v. Voltas Limited (2010(1) Bom.C.R.(Cri.) 744) supporting the view that Mumbai has jurisdiction in such circumstances.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Harman Electronics (P) Ltd. Vs. National Panasonic (India) Ltd., 2009(2) Bom.C.R.(Cri.) 624 (S.C.) : 2008 DGLS(Soft.) 1436	Used by the Magistrate as a subsequent judgment creating a "change of circumstance" warranting reconsideration of the earlier application.	The Magistrate relied on this judgment to entertain the second section 201(a) application and return the complaint; the High Court noted this reliance but held that section 362 barred the Magistrate from effectively reviewing his own earlier reasoned order.
Deeptikumar Mohanty Vs. M/s. Videocon Industries Limited, 2009(1) Bom.C.R.(Cri.) 766 (A.B.) : 2009 Cri.L.J. 3220	Relied upon by the petitioner and considered by the Division Bench in relation to jurisdictional questions.	The Court noted the case was relied on by the petitioner and that it was among authorities considered by the Division Bench in concluding Mumbai courts have jurisdiction where the registered office is in Mumbai and cheque/notice events occurred there.
K. Bhaskaran Vs. Shakaran Vaidyan Balan, 1999(7) S.C.C. 510 : 2000(5) Bom.C.R. 178(S.C.)	Principle on jurisdiction where cheque is deposited/notice issued in a place — supports trial Court's jurisdiction in that place.	The Court applied the ratio to hold that since the cheque was deposited and notice issued in Mumbai (and the complainant's registered office was in Mumbai), the Mumbai Court had jurisdiction to try the complaint.
Mrs. Preetha S. Babu Vs. Voltas Limited, 2010(1) Bom.C.R.(Cri.) 744	Division Bench authority on jurisdiction where registered office is in Mumbai and cheque/notice events occur in Mumbai.	The Court treated this Division Bench decision as supporting the proposition that Mumbai courts have jurisdiction in such circumstances and noted the Division Bench considered Harman Electronics and other authorities in reaching that conclusion.
Ahuja Nandkishore Dongre Vs. State of Maharashtra, 2007(1) Bom.C.R.(Cri.) 1031(N.B.) : 2007 DGLS(Cri.) soft 203 : 2007 Cri.L.J. 115	One of the authorities considered by the Division Bench in relation to jurisdictional analysis.	The Court recorded that the Division Bench considered this case when concluding that courts in Mumbai have jurisdiction where registered office/notice/deposit events occur in Mumbai.
Shamshad Begum (Smt.) Vs. B. Mohammed, 2008(13) S.C.C. 77 : 2008(2) Bom.C.R.(Cri.) 887 (S.C.)	Supreme Court authority considered in the Division Bench's jurisdictional reasoning.	The Court observed that this Supreme Court decision was one of the judgments taken into account by the Division Bench in reaching its conclusion on jurisdiction.
Mosaraf Hossain Khan Vs. Bhagheeratha Engg. Ltd., 2006(3) S.C.C. 658 : 2006(3) Bom.C.R. 98 (S.C.)	Supreme Court authority considered (cited in the opinion) as part of the jurisprudence on jurisdictional questions.	The Court referenced that this case was among those considered by the Division Bench and applied the ratio to hold that Mumbai had jurisdiction in the present facts.

Court's Reasoning and Analysis

The Court conducted a two-fold analysis: (A) whether the Magistrate could revisit his earlier reasoned order; and (B) the question of jurisdiction of the Mumbai Court to try the complaint.

A. On reviewability under section 362 Cr.P.C.:

The Court quoted section 362 Cr.P.C., which provides that, save as otherwise provided, no Court when it has signed its judgment or final order disposing of a case shall alter or review the same except to correct a clerical or arithmetical error.
The Court observed that the petitioner had earlier moved section 201(a) and the Magistrate had by a reasoned order dated 14th October, 2008 rejected that application. The later second application was entertained by the Magistrate and allowed by an order dated 25th June, 2009 returning the complaint for presentation to the proper Court.
The Court held that section 362 imposes a bar on criminal courts to review their own orders; therefore the learned Magistrate did not have jurisdiction to review his earlier order and could not have entertained the second application that effectively reviewed his own final order.
On this basis, the Court concluded that the learned Sessions Judge was justified in allowing the revision application filed by respondent No. 1 (i.e., setting aside the Magistrate's later order).

B. On jurisdiction:

The Court noted the factual matrix relevant to jurisdiction: respondent No. 1 had its registered office in Mumbai and carried on business in Mumbai; the cheque was deposited for encashment by respondent No. 1 in its HDFC Bank, Fort Branch, Mumbai and was dishonoured in Mumbai; and the statutory notice was issued from Bombay (Mumbai).
Relying on the ratio in K. Bhaskaran and the Division Bench decision in Mrs. Preetha S. Babu (which had considered Harman Electronics and other authorities), the Court concluded that where the registered office is in Mumbai, the statutory notice is issued from Mumbai and the cheque is deposited/dishonoured in Mumbai, the cause of action arises in Mumbai and the Magistrate in Mumbai has jurisdiction to try and decide the complaint.
The Court found that the ratio of the cited authorities applied to the present facts and therefore rejected the petitioner's contrary submission on jurisdiction.

The Court addressed the petitioner's submission that the Magistrate could rely on Harman Electronics to reconsider the matter, but reaffirmed that section 362 barred the Magistrate from revisiting his own signed final order and thus upheld the Sessions Court's intervention on that ground.

Holding and Implications

Holding: The petition is dismissed. The Sessions Court's order allowing the complainant's revision was upheld and the Magistrate's later order (returning the complaint) was set aside.

Implications:

Direct effect: The Sessions Court will decide the criminal case; the High Court directed that the Sessions Court decide the case expeditiously and in any event within a period of three months.
Broader implications: The opinion applies existing authorities (including K. Bhaskaran and a Division Bench decision in Mrs. Preetha S. Babu) to the facts to confirm the jurisdictional rule that where a complainant's registered office is in Mumbai and the cheque was deposited/dishonoured and notice issued in Mumbai, the Mumbai Court has jurisdiction. The opinion does not state that it is laying down new precedent beyond applying and affirming existing case law.

Disposition: Petition dismissed. Writ petition disposed of. Sessions Court directed to decide the criminal case within three months.

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Sharad Jhunjhunwala v. Compuage Infocom Limited Another

Cases referred :

1. Harman Electronics (P) Ltd. Vs. National Panasonic (India) Ltd., 2009(2) Bom.C.R.(Cri.) 624(S.C.) : 2008 DGLS(Soft.) 1436 : 2001(1) Bankers Journal 1(S.C.) (sic).

2. Deeptikumar Mohanty Vs. M/s. Videocon Industries Limited, 2009(1) Bom.C.R.(Cri.) 766(A.B.) : 2009 Cri.L.J. 3220.

3. K. Bhaskaran Vs. Shakaran Vaidyan Balan, 2000(5) Bom.C.R. 178(S.C.) : 1999 DGLS (soft) 1039 : 2000 DGLS(Cri.) soft 374 : 1999(7) S.C.C. 510.

4. Mrs. Preetha S. Babu Vs. Voltas Limited, 2010(1) Bom.C.R.(Cri.) 744.

5. Ahuja Nandkishore Dongre Vs. State of Maharashtra, 2007(1) Bom.C.R.(Cri.) 1031(N.B.) : 2007 DGLS(Cri.) soft 203 : 2007 Cri.L.J. 115.

6. Shamshad Begum (Smt.) Vs. B. Mohammed, 2008(2) Bom.C.R.(Cri.) 887(S.C.) : 2008 DGLS (soft) 1214 : 2008 DGLS(Cri.) soft 1496 : 2008(13) S.C.C. 77.

7. Mosaraf Hossain Khan Vs. Bhagheeratha Engg.Ltd., 2006(3) Bom.C.R. 98(S.C.) : 2006 DGLS (soft) 117 : 2006 DGLS(Cri.) soft 1502 : 2006(3) S.C.C. 658.

Advocates appeared :

M.B. Shukla i/b. Girish Kulkarni, for petitioner.

Mrs. Pravina J. Kanani, for respondent No. 2.

S.R. Shinde, A.P.P., for State.

KANADE V.M., J.: - By this petition, the petitioner, who is original accused in a complaint filed by respondent No. 1 under section 138 read with section 141 of the Negotiable Instruments Act, is challenging an order passed by the Sessions Court in Criminal Revision Application No. 1113/2009 whereby the learned Sessions Judge was pleased to set aside the order dated 24th March, 2009 passed by the learned Magistrate returning the complaint. Brief facts are as under :-

2. A complaint was filed by the respondent No. 1 against the petitioner in the 14th Court, Girgaum, Mumbai, vide Case No. 453/SS/2006 for the offence punishable under section 138 read with sections 141 and 142 of the Negotiable Instruments, Act. It is alleged that accused Nos. 2 and 3 placed order to the complainant on 10th December, 2005 and pursuant to the said order, the complainant had sold, supplied and delivered the goods which were received by the accused. Thereafter, the bills for the said supply of goods were sent to the accused who issued a cheque dated 22nd April, 2006 for an amount of Rs. 44,52,238/-. The said cheque was drawn on Punjab National Bank, Alipur Chetla, Kolkata, 700 027. The cheque was deposited by the complainant in his bank viz. HDFC Bank Limited, Fort Branch, Mumbai -400 023. However, the said cheque was returned unpaid with the remark Exceeds arrangements. The intimation of dis-honour of the cheque was given to the complainant on 27th April, 2006. Notice was issued, however, no reply was given though the Notice was received by the accused and therefore, the said complaint was filed in the 14th Court, Girgaum, Mumbai. Process was issued on the said complaint and the accused appeared before the said Court and filed an application under section 201(a) of the Cri.P.C. The said application was heard and decided by the learned Magistrate which was pleased to reject the said application by order dated 14th October, 2008. It is an admitted position that this order was not challenged by the accused -petitioner herein.

3. Thereafter, a second application was filed by him in the same Court viz. 14th Court, Giragaum, Mumbai under section 201(a) of the Cri.P.C. The complainant raised an objection that the second application was not maintainable in view of the specific provision of section 362 of the Cri.P.C. The learned Magistrate, however, held that in view of the subsequent judgment which was passed by the Apex Court in the case of (Harman Electronics (P) Ltd. & Anr. Vs. National Panasonic (India) Ltd.)1, 2009(2) Bom.C.R.(Cri.) 624(S.C.) : 2008 DGLS(Soft.) 1436 : 2001(1) Bankers Journal 1 (sic) (S.C. Of Delhi), there was a change of circumstance and therefore, the learned Magistrate was of view that it was necessary to reconsider the said application. The learned Magistrate on merits came to the conclusion that the order was placed by the accused at the branch office of the complainant at Kolkata and the cheque was issued at Kolkata and the goods were also delivered from the branch of the complainant situated at Kolkata. The learned Magistrate, therefore, held that in view of the judgment of the Apex Court, the complaint be returned to the complainant for presenting it before the proper Court.

4. Against this order, the Criminal Revision Application was filed by the complainant in the Court of Sessions, Greater Bombay. The Sessions Court allowed the revision application and held that the learned Magistrate did not have jurisdiction to try and decide the said application since the Magistrate did not have a power to review his own orders and therefore, without going into merits of the case, on this count alone, revision application was allowed. Being aggrieved by the said order, accused has preferred this petition.

5. The learned Counsel appearing on behalf of the petitioner has submitted that in view of the judgment of Apex Court in the case of Harman Electronics (P) Ltd., the learned Magistrate was entitled to consider the ratio of the said judgment and therefore, the impugned order passed by the learned Magistrate did not amount to the review of its own order. It was secondly submitted that in view of the judgment of Harman Electronics (P) Ltd., the trial Court did not have jurisdiction to try and decide the said case. He also relied on the judgment of this Court in the case of (Deeptikumar Mohanty Vs. M/s. Videocon Industries Limited)2, reported in 2009(1) Bom.C.R.(Cri.) 766(A.B.) : 2009 Criminal Law Journal 3220.

6. On the other hand, the learned Counsel for respondent No. 1 submitted that the learned Magistrate could not have reviewed his own orders in view of section 362 of the Cri.P.C. He submitted that even otherwise, in view of the judgment of the Apex Court in the case of (K. Bhaskaran Vs. Shakaran Vaidyan Balan and another)3, reported in 2000(5) Bombay Cases Reporter 178(S.C.) : 1999 DGLS (soft) 1039 : 2000 DGLS(Cri.) soft 374 : 1999(7) S.C.C. 510, the trial Court had the jurisdiction to try and decide the said case. She also relied on the judgment of Division Bench of this Court in the case of Criminal Writ Petition No. 3158/2009 in the case of (Mrs. Preetha S. Babu Vs. Voltas Limited)4, dated 3rd March, 2010, reported in 2010(1) Bom.C.R.(Cri.) 744.

7. I have heard both the learned Counsel at length. In my view, there is some substance in the submission made by the learned Counsel for respondent No. 1. The petitioner herein initially had preferred an application under section 201(a) before the learned Magistrate who had by his order dated 14th October, 2008 rejected the said application by passing a reasoned order. Thereafter, second application was filed by the petitioner herein on the same ground and the second application was entertained by the learned Magistrate and by order dated 25th June, 2009, the said application was allowed and the complaint was returned to the complainant for presentation to the proper Court. Section 362 of the Cri.P.C. imposes a bar on the criminal courts to review its own orders. Section 362 reads as under :-

Section 362.- Court not to alter judgment. - Save as otherwise provided by this Code or by any other law for the time being in force, no Court, when it has signed its judgment or final order disposing of a case, shall alter or review the same except to correct a clerical or arithmetical error.

8. Perusal of the aforesaid provision, therefore, clearly reveals that the learned Magistrate did not have the jurisdiction to review its own order and therefore, the learned Magistrate could not have entertained the second application which was filed under section 201(a) of the Cri.P.C. In my view, therefore, the learned Sessions Judge was justified in allowing the revision application filed by respondent No. 1 herein. Secondly, so far as question of jurisdiction is concerned, respondent No. 1 company has its registered office in Mumbai and is carrying on business at Mumbai. Pursuant to the goods which were delivered to the petitioner, he had issued a cheque for clearing the amount due and to discharge their liability towards the purchase of the goods and in order to make part payment of the said goods, a cheque dated 22nd April, 2006 for an amount of Rs. 44,52,238/- was issued in favour of respondent No. 1. This cheque was deposited for encashment by respondent No. 1 in its bank at HDFC Bank Limited, Fort Branch, Mumbai, on 22nd April, 2006 which was returned unpaid by the bankers for the said company. Thereafter, a notice was given by respondent No. 1 dated 11th May, 2006 through his Advocate from Bombay. Since the cheque was deposited by the respondent No. 1 in its bank in Mumbai and notice was issued in Mumbai, in view of the ratio of the judgment in K. Bhaskaran case (supra), the Court in Mumbai had the jurisdiction to try and decide the said complaint. The Division Bench of this Court in the case of M/s. Preethe S. Babu (supra) has held that in such circumstances, the Mumbai Court would have the jurisdiction to entertain the complaint. The Division Bench of this Court has taken into consideration the judgment in the case of M/s. Harman Electronics (P) Ltd. (supra) and also the case of (Ahuja Nandkishore Dongre Vs. State of Maharashtra & Anr.)5, reported in 2007(1) Bom.C.R. (Cri.) 1031(N.B.) : 2007 DGLS(Cri.) soft 203 : 2007 Criminal Law Journal 115 and Deepti kumar Mohanty (supra) and after having taken into consideration the said judgments, the Division Bench came to the conclusion that in cases where the registered office is situated in Mumbai and statutory notice was issued from Mumbai and the cheque was deposited in Mumbai and it was dishonoured in Mumbai, the cause of action had arisen in Mumbai and therefore, the Magistrate before whom the complaint is filed has jurisdiction to try and decide the case. The Division Bench also took into consideration the judgment of the Apex Court in the case of K. Bhaskaran (supra) and another judgment of the Supreme Court in the case of (Shamshad Begum (Smt.) Vs. B. Mohammed)6, 2008(2) Bom.C.R.(Cri.) 887(S.C.) : 2008 DGLS (soft) 1214 : 2008 DGLS(Cri.) soft 1496 : 2008(13) S.C.C. 77 and (Mosaraf Hossain Khan Vs. Bhagheeratha Engg.Ltd.)7, 2006(3) Bom.C.R. 98(S.C.) : 2006 DGLS (soft) 117 : 2006 DGLS(Cri.) soft 1502 : 2006(3) S.C.C. page 658.

9. In my view, the ratio of the said judgment, therefore, will clearly apply to the facts of the present case. Therefore, there is no merit in the submission made by the learned Counsel for the petitioner.

10. The petition, therefore, is dismissed. The Sessions Court shall decide the criminal case, expeditiously and in any case, within a period of three month.

11. Writ petition is disposed of.

Petition dismissed.

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Sharad Jhunjhunwala v. Compuage Infocom Limited Another

Structured Summary of the Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Petitioner's Arguments

Respondent No. 1's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Sharad Jhunjhunwala v. Compuage Infocom Limited Another

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