138 NI Act

IN THE SUPREME COURT OF INDIA

Criminal appellate jurisdiction
CRIMINAL APPEAL No. 808 OF 2013

Nishant Aggarwal Appellant(s)

Versus

Kailash Kumar Sharma Respondent(s)

Territorial jurisdiction

The question which has to be decided in this appeal is whether the Court, where a cheque is
deposited for collection, would have territorial jurisdiction to try the accused for an offence
punishable under Section 138 of the Negotiable Instruments Act, 1881 (in short the N.I.Act)
or would it be only the Court exercising territorial jurisdiction over the drawee bank or the bank
on which the cheque is drawn?

The Supreme Court held that courts at places where a cheque is deposited for encashment can
hear cheque-bounce complaints.



2013 STPL(Web) 928 SC
SUPREME COURT OF INDIA
(Sudhansu Jyoti Mukhopadhaya and V. Gopala Gowda, jj.)

Devendra kishanlal dagalia Aappellant
Versus
Dwarkesh Diamonds Pvt. Ltd. and Ors. Respondents


Jurisdiction of the Court in 138 matters.

Entire transaction took place at New Delhi and only the legal notice was issued from Mumbai
and hence the learned Magistrate has no jurisdiction to try and entertain the complaint.

Components of the said offence:

1. Drawing of the cheque,
2. Presentation of the cheque to the bank,
3. Returning the cheque unpaid by the drawee bank,
4. Giving notice in writing to the drawer of the cheque demanding payment of the cheque
amount,
5. Failure of the drawer to make payment within 15 days of the receipt of the notice.

The complainant can choose any one of those courts having jurisdiction over any one of the
local area within the territorial limits of which any one of the five acts was done.


IN THE SUPREME COURT OF INDIA
Criminal appellate jurisdiction
CRIMINAL APPEAL NOS.261-264 OF 2002

MSR Leathers Appellant
Versus
S. Palaniappan & Anr Respondents


Whether the payee or holder of cheque can initiate proceedings of prosecution for the second
time if he has not initiated any action on earlier cause of action?

Overruled the decision in Sadanandan Bhadrans case and hold that prosecution based upon second
or successive dishonour of the cheque is also permissible so long as the same satisfies the requirements
stipulated in the proviso to Section 138 of the Negotiable Instruments Act


IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
WRIT PETITION (CIVIL) NO.18 OF 2013

Indian Bank Association and others Petitioners
Versus
Union of India and others Respondents
J U D G M E N T
K.S. Radhakrishnan, J.


This Writ Petition, under Article 32 of the Constitution of India, has been preferred by the Indian Banks
Association (IBA) along with Punjab National Bank and another, seeking the following reliefs :-

Apex court directions to Trail court on section 138 proceedings.

(1) Metropolitan Magistrate/Judicial Magistrate (MM/JM), on the day when the complaint under Section
138 of the Act is presented, shall scrutinize the complaint and, if the complaint is accompanied by the
affidavit, and the affidavit and the documents, if any, are found to be in order, take cognizance and
direct issuance of summons.

(2) MM/JM should adopt a pragmatic and realistic approach while issuing summons. Summons must be
properly addressed and sent by post as well as by e-mail address got from the complainant. Court, in
appropriate cases, may take the assistance of the police or the nearby Court to serve notice to the
accused. For notice of appearance, a short date be fixed. If the summons is received back un-served,
immediate follow up action be taken.

(3) Court may indicate in the summon that if the accused makes an application for compounding of
offences at the first hearing of the case and, if such an application is made, Court may pass appropriate
orders at the earliest.

(4) Court should direct the accused, when he appears to furnish a bail bond, to ensure his appearance
during trial and ask him to take notice under Section 251Cr.P.C. to enable him to enter his plea of
defense and fix the case for defense evidence, unless an application is made by the accused under
Section 145(2) for re- calling a witness for cross-examination.

(5) The Court concerned must ensure that examination-in-chief, cross- examination and re-examination
of the complainant must be conducted within three months of assigning the case. The Court has option
of accepting affidavits of the witnesses, instead of examining them in Court. Witnesses to the complaint
and accused must be available for cross-examination as and when there is direction to this effect by the
Court.





451 CrPC cases



LAWS(SC)-2002-10-118
AIR(SC)-2003-0-638
SUPREME COURT OF INDIA

Coram :- M.B.Shah , D.M.Dharmadhikari J.
Decided on October 01, 2002
Special Leave Petition (Criminal)

Sunderbhai Ambalal Desai Appellant
VERSUS
State of Gujarat Respondents






If material on record indicates that such articles belong to the complainant at whose house
theft, robbery or dacoity has taken place, then seized articles be handed over to the
complainant after:
1. preparing detailed proper panchnama of such articles;
2. taking photographs of such articles and a bond that such articles would be produced if
required at the time of trial; and
3. after taking proper security.



LAWS(SC)-2010-4-28
AIR(SCW)-2010-0-2967
SUPREME COURT OF INDIA
Coram :- P.Sathasivam , Deepak Verma J.
Decided on April 19, 2010
WRIT PETITION (C) NO. 14 OF 2008
General Insurance CouncilAppellant
VERSUS
State of Andhra PradeshRespondents


Criminal - Practice & Procedure - InsuranceCode of Criminal Procedure, 1973, ss. 451 and 457 -
Insurance Act, 1938 - Motor Vehicles Act, 1988, s. 158(6) - Disposal of seized property by police
officer pending trial - Procedure by police upon seizure of property - Petitioner No.1, General
Insurance Council filed petition u/art. 32 of the Constitution - It was submitted that despite the
directions passed by SC in Sunderbhai Ambalal Desai, 2002 INDLAW SC 1453 and General
Insurance Council and Others v. State of Andhra Pradesh and Others 2007 INDLAW SC 726 with
regard to the seized vehicles involved in commission of various offences or abandoned vehicles
or vehicles which are recovered during investigation of complaint of thefts, the police,
investigating agency and the prosecuting agency are not taking appropriate and adequate steps
for compliance of directions issued - Held, State Governments/ Union Territories/Director
Generals of Police directed to ensure macro implementation of the statutory provisions and
directions issued - Further directions also issued that (A) Insurer may be permitted to file a
separate application for release of the recovered vehicle and necessary photographs may be
taken and detailed panchnama may be prepared before such release (B) Photographs so taken
may be used as secondary evidence during trial (C) Insurer would submit an
undertaking/guarantee to remit the proceeds from the sale/auction of the vehicle conducted
by the Insurance Company in the event that the Magistrate finally adjudicates that the rightful
ownership of the vehicle does not vest with the insurer - Further, information with regard to all
insured vehicles in the country available with the Insurance Information Bureau is required to
be utilised and followed scrupulously and has to be given positively as and when asked for by
the Insurer - Writ petition disposed of.



Madras High Court

Selvam vs State By Inspector Of Police on 3 February, 2012

Honourable mr.justice c.t.selvam

The powers under Section 451 CrPC should be exercised expeditiously and judiciously. It
would serve various purposes, namely:

owner of the article would not suffer because of its remaining unused or by its
misappropriation;
court or the police would not be required to keep the article in safe custody;
If the proper panchnama before handing over possession of the article is prepared, that
can be used in evidence instead of its production before the court during the trial. If
necessary, evidence could also be recorded describing the nature of the property in
detail; and
This jurisdiction of the court to record evidence should be exercised promptly so that
there may not be further chance of tampering with the articles.


Madras High Court
Lenovo India (P) Ltd Vs The State
DATED: 20.11.2013

Permission for selling the case property.

Criminal Original Petition filed under Section 482 of the Code of Criminal Procedure, to set aside the
order dated 4.10.2013 passed by the learned Judicial Magistrate, Thiruvottiyur in Crl.M.P.No.6638 of
2013 and modify the same granting permission to the first petitioner to sell the case property.

For instance, in a case huge quantity of gold items may be case-property. If a jeweller or a
complainant/owner of the property, when urgently in need of money, for business purposes,
educational and other purposes of their sons and daughters, they may have to dispose of those items to
raise money. Thus, the situation may so warrant giving them permission to sell the case properties to
raise the money for their pressing needs.


Madras High Court
Sundaram Finance Ltd vs The State of Tamil Nadu on 9 July, 2010


Petition is filed under Section 482 of the Code of Criminal Procedure, praying to call for the records in in
lower court and set aside the conditions imposed in the order and to modify the same by granting
permission to the petitioner to sell the vehicle by public auction or on private treaty.

Court allowed Criminal Original Petition. Lower Court shall, upon production of the certified copy of
order (judgment high court) , fix a date for production of the vehicle before it. Upon production, the
lower court shall cause photographs of the vehicle to be taken and record Panchnama thereof. The
petitioner shall then be at liberty to effect sale of the vehicle. The photographs and Panchnama
prepared shall be read as evidence in lieu of marking of the vehicles.



In the High Court of Kerala at Ernakulam
present:
The honourable Mr.Justice S.Siri jagan
&
The honourable Mr. Justice K.Ramakrishnan
Monday, the 29th day of july 2013/7th sravana, 1935
wp(c).no. 18267 of 2013 (g)


the Magistrate Court shall take note of the fact that the gold ornaments are pledged with the
petitioner and the Magistrate shall see that ultimate orders passed in the matter shall not in any way
prejudice the right of the petitioner to hold the gold ornaments as security for repayment of the loan
amount.



IN THE HIGH COURT OF JUDICATURE AT BOMBAY.
CRIMINAL APPELLATE JURISDICTION
Manappuram Finanace Ltd.
Vs.
The State of Maharashtra



Petitioner entitled to claim refund or return of the said property. As far as identity of the articles is
concerned, the said aspect can be taken care of by directing the police to prepare panchnama in which
the description of each article will be mentioned and along with the description of each article, a
photograph of each of the article may also be taken and article number may be mentioned on the
photograph or the number may be pasted on the photograph. Once, the identity of the articles is taken
care of, it is not necessary to retain these gold ornaments with the police. The petitioner may execute a
Bond stating therein that in the event of any claim being made by any third party in respect of any of the
articles, they would refund the said article or an equivalent amount in respect of value of the said
article. A fresh valuation may also be done by the Investigating Officer through an independent
Goldsmith.
Once it is verified that the production of the articles may not be necessary if proper panchnama is made
and photographs of the said articles are taken, the petitioner may hand over articles to the customers
after the aforesaid procedure is carried out. If the gold ornaments are returned by the petitioner to their
customers, they may intimate this fact to the court.



Trade license
Supreme Court of India
A.P. Bankers & Pawn Brokers ... vs Municipal Corporation Of ... on 2 March, 2001
Bench: A Misra, S Variava
CASE NO.:
Appeal (civil) 1691 of 2001

The Appellants are an Association of money lenders and pawn brokers. The Respondent-
Corporation had in the year 1972 by a Notification dated 14th/15th April, 1972, notified the
business of money lenders and pawn brokers as one which required a licence under Section 521
of the Hyderabad Municipal Corporation Act.Having so notified a licence fee of Rs.50/- was
charged from all money lenders and pawn brokers. At that time no challenge was made to the
Notification. However, by another Notification dated 11th April, 1987, the licence fees was
enhanced from Rs.50/- to Rs.500/- in case of money lending and pawn broking business and
Rs.200/- in case of money exchange operations.
The single Judge, inter alia, held that the business of money lending and pawn broking were
dangerous to property in the sense that they involved a risk to property of the persons who
hypothecate the same with the money lenders and that having regard to the manner in which
and the circumstances under which such business is carried on they are likely to create
nuisance.
The Honble Supreme Court categorically held that Merely because a pawn broker or a money
lender is likely to set up a shop in the thick of a residential locality or in a crowded place would
be no ground for the Commissioner to come to a conclusion that the entire trade or occupation
of money lending and pawn broking is dangerous or likely to create nuisance. The Writ Petition of
the Appellants is allowed


Andhra Pradesh Shops & Establishments Act, 1988


Grand Kakatiya Sheraton Hotel & T.E. & W.Un. Vs. Srinivasa Resorts Ltd. & Ors. [2009] INSC 436
(27 February 2009
This appeal is directed against the judgment and order passed by the High Court, whereby, Sections
47(3) and 47(4) of the Andhra Pradesh Shops & Establishments Act, 1988 (hereinafter referred to as `the
Shops Act') are declared unconstitutional, discriminatory and violative of the Articles 14 and 19(1)(g) of
the Constitution of India.
Supreme Court upheld the decision of the High Court.




Arbitration

Arbitration and Section 138 NI Act

Bombay High Court
Atlaz Degi-Tel Pvt. Ltd. And Ors. vs Atlaz Technology Pvt. Ltd. And ... on 29 November, 2001
Equivalent citations: 2002 (3) BomCR 70.

There was an agreement whereby the petitioner was to purchase respondent's business unit, pursuant
to which the petitioner issued post dated cheques. A dispute arose between the parties and the
petitioner applied u/s 11 for appointment of arbitrator. In the meanwhile, the respondent filed a suit u/s
138 of the Negotiable Instruments Act. The Petitioner contended that the dispute was essentially of civil
nature and initiation of criminal proceedings by way of short cuts of other remedies was unacceptable.

It was held that merely because an act has a civil profile is not sufficient to denude it of its criminal
outfit. The provisions incorporated in the agreement for referring the dispute to arbitration is not an
effective substitute for a criminal prosecution when the disputed act is an offence. Arbitration is a
remedy for affording reliefs to the party affected by the breach of agreement but the arbitrator cannot
conduct a trial of any act which amounts to an offence, albeit the same act may be connected with the
discharge of any function under the agreement.

Although the transaction is question is a commercial transaction arising out of an agreement, offence
u/s 138 NI Act appears to have been committed in the course of such transaction and as such the
process issued u/s 138 should not be quashed.




Arbitration and Criminal cases

Supreme Court
CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 1792 OF 2008

( Arising out of SLP(Crl.) NO. 6878/2007)

M/s Sri Krishna Agencies .. Appellant(s)

Versus

State of A.P. & Anr. .. Respondent(s)


This appeal is directed against the judgment and order dated 24
th
September, 2007, passed by the
Andhra Pradesh High Court in Criminal Petition No.4508 of 2007 quashing the proceedings, being C.C.
No. 982 of 2005, on the file of the IInd Additional Chief Metropolitan Magistrate, Hyderabad, under
Section 138 of the Negotiable Instruments Act, 1981 (for short the Act) in exercise of powers under
Section 482 of the Code of Criminal Procedure.

Before the High Court, it was sought to be contended on behalf of respondent No. 2 that since the
appellant herein had already taken recourse to arbitration proceedings, the dispute was obviously of a
civil nature and the criminal complaint could not be proceeded with. Accepting the statements made on
behalf of respondent No. 2, the High Court quashed the complaint as indicated hereinabove.

The Supreme Court allowed the appeal and set aside the order passed by the High Court and restored
the complaint before the Chief Metropolitan Magistrate, Hyderabad and directed to be proceeded with
in accordance with law.

Arbitration and civil case

Madras High Court
India cements capital finance ltd.
V.
Kwality spinning mills ltd.
[2000] cla-bl supp. (snr.) 135 (mad.)

Section 8 - Reference to arbitration when there is an arbitration agreement - Where there is an
arbitration provision in a hire purchase agreement, no suit involving any dispute covered by the
agreement will be maintainable. The suit matter will have to be referred to arbitration and a challenger
of the genuineness of the agreement will not be a ground for avoiding such reference.





CONSUMER CASES

National Consumer Disputes Redressal Commission, New Delhi
REVISION PETITION NO. 182 OF 2004/A
(From the order dated 28.10.03 FA No. 403/03 of the State Commission, Jharkhand)
Kamakashya Prasad .. Petitioner
Vs
Lalji Sah Krishi Kendra & Ors. ... Respondents
A consumer dispute cannot be decided by a District Forum, when no part of cause of action arises within
its territorial jurisdiction.

Consumer Disputes Redressal Commission
Consumer Disputes Redressal Commission
Instalment Supply Ltd. vs Kangra Ex-Serviceman Transport ... on 5 October, 2006
Equivalent citations: I (2007) CPJ 34 NC

The issue involved in this case is whether a complaint can be decided by the Consumer Fora after an
arbitration award is already passed. The simple answer to this question is No. In view of the decision of
the Arbitrator which is binding on parties, the Fora below should not have passed an order by
overlooking the award. Hence

Madhya Pradesh High Court
Madhya Pradesh High Court
Basant Kumar vs The United India Insurance Co. ... on 9 October, 2002
Equivalent citations: AIR 2003 MP 203, 2003 (3)

On a dispute having arisen, the petitioner availed of the remedy under the Consumer Act and obtained an order in his
favour granting compensation, inspite of a remedy being available under the Arbitration Act. Thereafter, the petitioner
being dissatisfied with the amount granted by the Consumer Court, filed a suit for appointment of an arbitrator.
It was held that once the claim has been adjudicated on merit, it is not open to challenge that order by having
recourse before the arbitrator. An arbitrator cannot be allowed to sit over the order of the District Forum or State
Commission, particularly when the matter has been adjudicated on merits. The petitioner cannot now avail benefit of
arbitration though initially it was open for him to choose the remedy. The order passed under the Consumer Act is
final.