Delivery Of Cheque Takes Place Once It Is Issued & Presented Through Account Of Holder In Due Course: Kerala High Court

The Kerala High Court ruled that as per Section 143(2) of the NI Act, the trial of a case under this Section shall, so far as practicable, consistently with the interests of justice, be continued from day to day until its conclusion, unless the Court finds the adjournment of the trial beyond the following day to be necessary for reasons to be recorded in writing.

A Single Judge Bench of Justice A. Badharudeen observed that “As per Section 143(3) of the NI Act, every trial under this section shall be conducted as expeditiously as possible and an endeavour shall be made to conclude the trial within six months from the date of filing of the complaint. Despite the statutory mandate, trial of the cases being stalled for years and the same, no doubt, would defeat the legislative intention”.

Advocate Atul Sohan appeared for the Petitioners whereas Advocate Pramod M. represented the Respondent.

The brief facts of the case were that a case was registered by the respondents on the file of the Judicial First-Class magistrate regarding the dispute raised on an agreement for the Specific Performance of Construction of a Commercial Building in immovable property. Here, the complainant alleged an accused for the commission of an offense punishable under Section 138 of the Negotiable Instruments Act (the NI Act). The cheque was delivered for collection through an account maintained by the drawer of the cheque at Kannur, the complainant at present residing within the jurisdiction of Chengannur Court. As per the petitioner, the complainant could not register before the Judicial First-Class Magistrate Court-1, Chengannur, merely on the ground that the cheque was presented for collection through State Bank of India, Chennithala branch, within the jurisdiction of Judicial First-Class Magistrate Court-1, Chengannur. The petitioner therefore approached the High Court to quash all proceedings with a view that the Complaint under Sec. 138 of the Negotiable Instruments Act, 1881 is a Special Jurisdiction conferred by Sec. 142 of the NI Act, notwithstanding anything contained in the Criminal Procedure Code, must be strictly construed and only the Court Specified in Sec. 142(2) alone shall have the jurisdiction to entertain the complaint.

After considering the submission, the Bench noted that the question of jurisdiction never be a subject matter of challenge in a writ petition.

The Bench stated that 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.

Further, “Section 142(2)(a) along with Section 142, makes clear that, when a cheque is delivered or issued to a person with liberty to present the cheque for collection at any branch of the bank where the payee or holder in due course, then, the cheque shall be deemed to have been delivered or issued to the branch of the bank, in which, the payee or holder in due course, as the case may be, maintains the account, and within the jurisdiction of the court, where such cheque was presented for collection, will have jurisdiction to entertain complaint alleging commission of an offense punishable under Section 138 of the NI Act”, added the Bench.

The Bench went on to elucidate that the word ‘delivered’ used in Section 142(2)(a) of the NI Act has no significance and significance must be given to the text ‘for collection through an account’.

Accordingly, the Bench clarified that delivery of the cheque takes place where the cheque was issued and presentation of the cheque will be through the account of the payee or holder in due course, and the said place is decisive to determine the question of jurisdiction.

The High Court therefore stated that reliefs cannot be granted, since the penal consequence on dishonor of the cheque should have to be suffered by the person who issued the cheque and the same cannot be delegated to another person, in any manner.

Hence, the High Court dismissed the petition finding it to be meritless and directed the trial court to expedite the trial and dispose of the case within a period of three months. 

Cause Title: Alfa One Global Builders Pvt. Ltd and Anr. v. Nirmala Padmanabhan and Ors. [Neutral Citation: 2023/KER/49774]

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