Jurisdiction for action under section 138 of the negotiable instruments act, 1881
Dr. MPS RAMANI Ph.D.[Tech.]
(Querist) 01 June 2012
This query is : Resolved
We are suppliers of process equipment in Mumbai. We supplied equipment to a party in Chennai. In the price to be paid to us an amount of Rs.3.0 lakhs is outstanding for more than one year. After sending so many reminders and telephonic talk, they sent the amount by 2 cheques. But when the cheques were presented at our bank, they were returned unpaid as the party had given “stop payment” instructions. We have now sent notice under Section 138(b) of the Negotiable Instruments Act, 1881, to the party asking them to pay up the amount within 15 days, failing which we shall proceed against them as provided under the same Section of the same Act.
Now if we have to file case against the party, can we file it in Mumbai, or have we to file it in Chennai only? In their purchase order, they have mentioned that for arbitration of “any dispute” the jurisdiction will be Chennai. But there is no dispute in this case. By sending the cheque, they agree that the amount is payable to us.
Suhail A.Siddiqui
(Expert) 01 June 2012
U can file complain u/s 138 N I Act at the place, where u presented cheque.
ajay sethi
(Expert) 01 June 2012
cheque has been issued from chennai . payable at bank in chennai . contract provides in repsect of disputes jursidcition at chennai only .
file case in chennai . domnt file it in mumbai
C. P. CHUGH
(Expert) 01 June 2012
I Agree with Mr Sethi, since the liability to pay arose at Chennai, Cheque was issued at Chennai and also dishounoured by Bank at Chennai, it would be appropriate to file complaint at Chennai, though many HC and even SC has taken dissenting views about the territorial jurisdiction in case of 138 of NI Act. The very precise issue is pending before the larger bench of Apex Court presently and let us hope the issue would be settled once for all after the Larger Bench has taken its view in the matter.
kuldeep kumar
(Expert) 02 June 2012
nicely replied chennai court have jurisd..nothing2 dissent
R Trivedi
(Expert) 02 June 2012
Apart from few other places, the jurisdiction as of now, can be:
1. Place of your Bank Branch.
2. Place of drawer Bank Branch.
So you can file the case in Mumbai. I presume that:
1. You billed the material (the attached liability) from your Mumbai address.
2. Your Bank Branch is in Mumbai.
Dr. MPS RAMANI Ph.D.[Tech.]
(Querist) 02 June 2012
One more point I wish to say. Both the banks are State Bank of India branches in Chennai and Mumbai.
With internet banking, the Mumbai branch did not send the cheque to Chennai and got it returned unpaid. They just browsed the computer screen saw the "stop payment" instruction and returned the cheque instantly across the counter endorsing "stopped payment" on the cheque with the Bank's date stamp.
Shonee Kapoor
(Expert) 02 June 2012
As the cheque was delievered to you in Mumbai, Mumbai would also acquire jurisdiction.
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
ajay sethi
(Expert) 02 June 2012
i would not advise you to file complaint in mumbai . if you file complaint in mumbai an objection will be raised by accused Advocate that mumbai does not have any jurisdiction as contract specifically mentioned that in event of disputes courts at chennai alone will have jurisdiction .
you will waste valuable time and money on legal fees if you file in mumbai .
R Trivedi
(Expert) 02 June 2012
With due respect to Mr Sethi, I would say, you are perfectly in your right to file the case in Mumbai. It shall not be fatal to your case.
Arbitration is the civil matter, the process of cheque bounce starts with the dishonor of the cheque, that is intimation to you from your Bank Mumbai Branch, where you hold the account and where you deposited the cheque.
As of now honorable Supreme Court has thoughtlessly included many places for jurisdiction, it will change in due course by higher bench, but till then complainant has the upper hand.
M V Gupta
(Expert) 02 June 2012
The case will be a criminal case. If the complaint is filed in Mumbai you will face many problems in service of summons/warrants etc on the Accused persons who are at Chennai. Hence from logistics point of view filing the complaint at Chennai would be more advisable.If the accused persons are to be arrested and produced before the court, it will be easy if the complaint is filed in the Metropolitan magistrate court at Chennai.
