Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Appellate Tribunal, New Delhi (NCLAT): The Coram of Justice Ashok Bhushan (Chairperson) and Shreesha Merla (Technical Member) held that, the territorial jurisdiction of NCLT to decide a case under Insolvency and Bankruptcy Code, 2016 cannot be taken away by the Facility Agreement between the parties.

Instant appeal was filed against the order passed by the National Company Law Tribunal, New Delhi, by which the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 had been admitted.

The Appellant’s counsel submitted that there was no jurisdiction with the Principal Bench, Delhi to entertain Section 7 Application. He referred to a Clause from the Facility Agreement, as per which Courts at Mumbai had jurisdiction in respect of any matter of the Facility Agreement.

Analysis, Law and Decision

First, the Tribunal referred to Section 60(1) of the Code provides for Adjudicating Authority for Corporate Persons. Section 60(1) is as follows:

  1. (1) The Adjudicating Authority, in relation to insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors thereof shall be the National Company Law Tribunal having territorial jurisdiction over the place where the registered office of the corporate persons located.

Coram expressed that, Adjudicating Authority in relation to Insolvency Resolution shall be the National Company Law Tribunal having territorial jurisdiction over the place where the registered office of the corporate persons is located.

Tribunal stated that, the appellant cannot rely on clause 24.12 of the Facility Agreement which provides jurisdiction to the Mumbai Courts.

Noting the above, Coram held that, for filing an Application under Section 7 of the Code, the provisions of Section 60(1) read with Section 238 of the Code shall be overriding clause 24.12 of the Facility Agreement.

Further, not denying that Corporate Debtor’s registered office was situated in New Delhi where the territorial jurisdiction to entertain such application was with NCLT, Delhi, Coram did not accept the submissions of Counsel for the appellant.

In view of the above, the appeal was dismissed. [Anil Kumar Malhotra v. Mahindra & Mahindra Financial Services Ltd., Company Appeal (AT) (insolvency) No. 415 of 2022, decided on 19-4-2022]


Advocates before the Tribunal:

For Appellant:  Mr. Yajur Bhalla, Mr. Siddharth Srivastava, Sumeir Ahuja, Advocates

Advocate Gunjan Chauvey, for R-1

For Respondent: Mr. Rajesh Kumar Mittal, Advocate for IRP, R-2.

Hot Off The PressNews

In compliance with the Supreme Court’s decision dated 16-4-2021, passed in (2021) 10 SCC 598 “In Re: Expeditious Trial of Cases under Section 138 of Negotiable Instrument Act 1881”, the Chief Justice of Bombay High Court has issued the following practice directions: –

1. The magistrates having jurisdiction to try offences under the Negotiable Instruments Act, 1881, shall record cogent and sufficient reasons before converting a complaint under Section 138 of the N.I. Act from summary trial to summons trial in the exercise of power under the second proviso of Section 143 of N.I.Act. Due care and caution shall be exercised in this regard and the conversion of summary trial to summons trial shall not be in a mechanical manner.

2. On receipt of any complaint under Section 138 of N.I. Act, wherever it is found that any accused is resident of the area beyond the territorial jurisdiction of the magistrate concerned, an inquiry shall be conducted by the magistrate to arrive at sufficient grounds to proceed against the accused as prescribed under Section 202 of Cr.P.C.

3. While conducting any such inquiry under Section 202 of Cr.P.C., the evidence of witnesses on behalf of the complainant shall be permitted to be taken on affidavit. In suitable cases, the magistrate may restrict the inquiry to the examination of documents without insisting for examination of witnesses for satisfaction as to the sufficiency of grounds for proceeding under the said provision.

4. Trial Court shall treat service of summons in one complaint under Section 138 of the N.I. Act forming part of a transaction, as deemed service in respect of all complaints filed before the same Court relating to the dishonor of cheques issued as a part of the same transaction.

5. Trial Courts have no inherent power to review or recall the issue of summons in relation to complaints filed under Section 138 of N.I. Act. However, the same shall not affect the power of the Trial Court under Section 322 of Cr.P.C to revisit the order of issue of process in case it is brought to the court’s notice that it lacks jurisdiction to try the complaint.

6. Section 258 of Cr.P.C. has no applicability to complaints under Section 138 of the N.I.Act. The words “as far as may be” in section 143 are used only in respect of applicability of Sections 262 to 265 of the Code and the summary procedure to be followed for trials under the said Code.

7. The appellate courts before which appeals against the judgments in complaint under Section 138 of the N.I. Act are pending are directed to make an effort to settle the dispute through mediation.

The above said practice directions are to come into effect from immediate effect. High Court also directed for strict compliance of the directions.


Bombay High Court

Circular No. Rule/P.1605/2022

[Circular dt. 27-1-2022]

Banking and Negotiable InstrumentsOp EdsOP. ED.

Sections 138 to 142 of the Negotiable Instruments Act, 1881[1] (for short, “the NI Act, 1881”) were inserted in the year 1988 by amending the principal Act of 1881 with the intent of encouraging the culture of use of cheques and credibility of the instrument. “Section 138[2]” became a mostly used common term in business, friends and family circles as majority of the financial transactions, despite the massive digitalisation post-demonetisation, still take place through issuance of cheques and in case of failure of the drawer (the one who owes money and issues the cheque) to honour the amount specified in cheque, the payee (the one to whom drawer owes money and whose name is written on the cheque) turns foe and invokes prosecution under that section. As economics is sine qua non of an individual from cradle to cremation and as Section 138 is thing closely related to economic activities, Section 138 cases have a lion’s share of dockets filed up in their name in India.

Section 138 punishes the person who fails to honour the amount specified in the cheque, which he has issued towards the discharge of his debt or liability towards another person, with up to two years of imprisonment or/and with fine up to double the cheque amount.

Unlike other statues, the Amendment Act of 1988[3] did not expressly specify territorial jurisdiction of the court in which Section 138 cases are to be filed by the aggrieved complainant. As the legislature has left fallow the area of territorial jurisdiction of cheque bounce cases, different Benches of the Supreme Court at different times started cultivation into that area by using their own divergent methods, which made the area so much infertile that when in 2015, the legislature entered into that area, it also got confused and failed to meet the object with which Sections 138 to 142 were inserted in the NI Act, 1881 and also failed to cope up the present demand casted by digitalisation and globalisation.

The first case on territorial jurisdiction aspect of cheque bounce cases was of a two-Judge Bench in K. Bhaskaran v. Sankaran Vaidhyan Balan,[4] wherein, after observing that offence under Section 138 can be completed only after concatenation of the following acts:

(1) drawing of cheque;

(2) presentation of cheque to the bank;

(3) returning the cheque unpaid by the drawee bank;

(4) giving notice to drawer by demanding payment; and

(5) failure of drawer to make payment within 15 days of receipt of notice,

the Court held that the complainant can file case in any of court having jurisdiction over any of those local areas within the territorial limits of which any one of aforesaid five acts was done. To arrive at this conclusion, the Court relied upon Sections 177 to 179 of the Code of Criminal Procedure, 1973[5] (for short, “CrPC”). Thus, a liberal, and in my opinion, substantially proper approach was adopted by the Supreme Court in K. Bhaskaran case[6].

But, in Harman Electronics (P) Ltd. v. National Panasonic (India)(P) Ltd.,[7]a 2-Judge Bench held that the court within whose limits, notice was issued cannot have territorial jurisdiction as it is the communication of notice which would give rise to a cause of action, and not issuance of notice. Thus, one of the acts laid in K. Bhaskaran case[8] was plucked out in Harman Electronics case[9]. It is to be noted that before Harman Electronics case[10], in Shamshad Begum v. B. Mohammed,[11] another 2-Judge Bench by following K. Bhaskaran case[12] held that the court from whose limits, notice was sent has jurisdiction. Shamshad Begum case[13] was not even discussed in Harman Electronics case[14].

Nonetheless, in Nishant Aggarwal v. Kailash Kumar Sharma,[15] Escorts Ltd. v. Rama Mukherjee,[16]and FIL Industries Ltd. v. Imtiyaz Ahmed Bhat,[17] the 2-Judge Bench followed K. Bhaskaran case[18] and held that the court within whose limits cheque has been presented by the payee through his account has jurisdiction.

Hence, as the ratio decided in K. Bhaskaran case[19] was shifting like pendulum from one corner to another over territorial jurisdiction of courts to deal with cheque bounce cases, a 3-Judge Bench was called upon to solve this conundrum. Therein came the judgment of a 3-Judge Bench in Dashrath Rupsingh Rathod v. State of Maharashtra,[20] which made matters worse by holding that only that court will have jurisdiction wherein the drawer maintains the bank account i.e. the drawee bank.

To overrule the ratio laid in K. Bhaskaran case[21], Dashrath Rupsingh[22] observed that the moment when cheque is dishonoured by the drawee bank (bank of the drawer), offence under Section 138 gets attracted, hence as the offence is committed at the place of drawee bank, the court situated therein will have jurisdiction. For arriving at this conclusion, it gained much of the strength from a previous judgment of a 3-Judge Bench in Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd.,[23] which held that  the word “bank” in Section 138 means only a drawee bank and the cheque has to be presented by the payee within the  limitation period of six months at such drawee bank. Although Ishar Alloy case[24] was not on the point of territorial jurisdiction, which was observed even in Dashrath Rupsingh case[25], but still it relied upon Ishar Alloy case[26] by stating that “when a court interprets any statutory provision, its opinion must apply to and be determinate in all factual and legal permutations and situations”[27]and “that Ishar Alloy[28] is only case … which was decided by a three-Judge and therefore was binding on all smaller Benches”[29] and it is “logically correct”.[30] In my opinion, reliance on Ishar Alloy case[31] was wholly untenable as firstly, Ishar Alloy[32]never discussed the point of territorial jurisdiction nor it was called to do so and it is well-settled rule that only that case can be relied by a subsequent Bench, which was decided on similar facts or atleast similar legal proposition, hence Ishar Alloy[33] interpretation of the word “bank” was purely for limitation period purposes, for which I gain strength from the 2015 Amendment which allowed jurisdiction in court where the payee maintains an account. Secondly, even assuming reasons given by Dashrath Rupsingh[34] for reliance on Ishar Alloy[35] to be correct, it should be noted that  K.T. Thomas, J.  who wrote for the 2-Judge Bench in K. Bhaskaran case[36] also part of 3-Judge Bench in Ishar Alloy case[37], the judgment of which was authored by  R.P. Sethi, J. Hence, if  K.T. Thomas, J. wanted to reverse his own opinion expressed in K. Bhaskaran case[38] or if he wanted to dissent from  R.P. Sethi, J.’s opinion, then he would have authored his own judgment, which could not be found. It is for the reason that the 3-Judge Bench in Ishar Alloy case[39] knew that it was deciding the aspect of limitation and not territorial jurisdiction. Thirdly, now for practical purposes the ratio of Ishar Alloy[40] became infructuous because in that case of 20th century, cheque was presented by the payee in his account but it did not reach the drawer’s account within six months, which now, in the 21st century, is not the case due to digitalisation of entire banking system wherein cheque reaches the drawee bank, through electronic mode, within 2 to 4 days of presenting.

Although Dashrath Rupsingh [41]is partly correct in saying that an offence is committed the moment cheque is dishonoured at the drawee bank, but it is to be noted that as per Section 142(1)(b) of the NI Act, 1881[42], prosecution can be initiated only after accrual of “cause of action” under clause (c) of the proviso to Section 138 i.e. when drawer fails to make payment within fifteen days of receipt of the notice. The whole purpose of mandatory issuance of “statutory notice” by the payee is to inform the drawer that the cheque which he gave got dishonoured and if he pays back the cheque amount, then the payee will not initiate any case against him and cause of action does not survive. This can be found from the fact that the payee can present the cheque any number of times despite dishonour within six/three months from date of issuance. But Dashrath Rupsingh[43] would take none of these and held that civil law concepts like “cause of action” cannot be applied into criminal law. In my opinion, this interpretation was wholly wrong as Section 138 of the NI Act, 1881 is a hybrid version of civil and criminal law. It is exactly for this reason, the legislature in its wisdom has used the civil law term of “cause of action” for the offence under Section 138 of the NI Act, 1881, which cannot be found in other penal statues. My views gain strength from the observations of the Supreme Court in R. Vijayan v. Baby,[44] wherein it was observed that:

  1. 16. … cases arising under Section 138 of the Act are really civil cases masquerading as criminal cases.… Chapter XVII of the Act is a unique exercise which blurs the dividing line between civil and criminal jurisdictions. It provides a single forum and single proceeding, for enforcement of criminal liability (for dishonouring the cheque) and for enforcement of the civil liability (for realisation of the cheque amount)….[45]

Also, in Harman Electronics case[46] the Court gave a go-by only to one of the principles of K. Bhaskaran case[47] i.e. place from where notice was issued does not give rise to cause of action, which was correct because under no branch of law, place from where notice is issued gives rise to cause of action,and Harman Electronics case[48] did not overrule the rest of the four principles of K. Bhaskaran case[49], which held the field till Dashrath Rupsingh[50] was decided.

Even the legislature has not accepted the Dashrath Rupsingh[51]view, that immediately within a year of the judgment, it came up with an amendment in the year 2015 stating that only that court will have jurisdiction where the payee maintains his account if he presents through his account (generally happens with cross-cheques) or where it is not presented through the payee’s account, then the court where the drawer maintains his account has jurisdiction.

Now the problem with the 2015 Amendment is that it has not been drafted as per the present practical needs. Till a decade ago, for all of the bank transactions, an individual had to physically visit the bank, therefore for his/her convenience whenever the account-holder shifted his/her residence or place of business he/she used to transfer his/her bank account from one branch to another or open a new account in the bank nearer to their locality, but, now after digitalisation, most of the banking transactions are taking place digitally and online through service providers like, PhonePe, Paytm, Google Pay, etc. Hence, people are not showing much interest in transferring or opening new bank account. For example, if A maintains an account in a bank having a branch in Chennai but due to job/business purposes he has shifted to Delhi, he can easily do banking transactions online and also, present even the cross-cheque at par in all branches of that bank without compulsorily going to his branch in Chennai. But, if the cross-cheque is dishonoured, as per the 2015 Amendment, he has to initiate Section 138 complaint only in the court where his bank branch is located in Chennai, which means he has to bear the legal expenses for the lawyers in Chennai, spend his time and money in travelling from Delhi to Chennai each time he is summoned to attend the court, which one cannot say how many times he has to attend.

Now, as the statute has conferred the territorial jurisdiction and as it is well settled that once the statute confers jurisdiction, courts cannot dilute it but are bound to follow it, hence, it is urged that Parliament comes up with an amendment to the NI Act, 1881 and confers the territorial jurisdiction on the courts trying cheque bounce cases by following the principles set out in K. Bhaskaran case[52], with only the court from where notice is issued being the exception as declared in Harman Electronics case[53]. Also, if the creditor initiates complaint against the same drawer from multiple courts just to harass him, such accused always has the remedy of transfer application  as enunciated in Chapter 31 from Sections 406 to 412 CrPC[54].


 *Advocate, Telangana High Court and co-author of Consumer Protection Act: A Commentary, (Eastern Book Company).  Author can be reached at akashbaglekar@gmail.com.

[1]http://www.scconline.com/DocumentLink/wgV2j1VM.

[2]http://www.scconline.com/DocumentLink/1g6m30k5.

[3]Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988.

[4](1999) 7 SCC 510.

[5]http://www.scconline.com/DocumentLink/onWy2d4F.

[6](1999) 7 SCC 510.

[7](2009) 1 SCC 720.

[8](1999) 7 SCC 510.

[9](2009) 1 SCC 720.

[10](2009) 1 SCC 720.

[11](2008) 13 SCC 77.

[12](1999) 7 SCC 510.

[13](2008) 13 SCC 77.

[14](2009) 1 SCC 720.

[15](2013) 10 SCC 72.

[16](2014) 2 SCC 255.

[17](2014) 2 SCC 266.

[18](1999) 7 SCC 510.

[19](1999) 7 SCC 510.

[20](2014) 9 SCC 129.

[21](1999) 7 SCC 510.

[22](2014) 9 SCC 129.

[23](2001) 3 SCC 609.

[24](2001) 3 SCC 609.

[25](2014) 9 SCC 129.

[26](2001) 3 SCC 609.

[27]Dashrath Rupsingh case, (2014) 9 SCC 129, 146, para 10.

[28](2001) 3 SCC 609.

[29](2014) 9 SCC 129, 146, para 10.

[30](2014) 9 SCC 129, 160-161, para 31.

[31](2001) 3 SCC 609.

[32](2001) 3 SCC 609.

[33](2001) 3 SCC 609.

[34](2014) 9 SCC 129.

[35](2001) 3 SCC 609.

[36](1999) 7 SCC 510.

[37](2001) 3 SCC 609.

[38](1999) 7 SCC 510.

[39](2001) 3 SCC 609.

[40](2001) 3 SCC 609.

[41](2014) 9 SCC 129.

[42]http://www.scconline.com/DocumentLink/W705Y641.

[43](2014) 9 SCC 129.

[44](2012) 1 SCC 260.

[45](2012) 1 SCC 260, 266.

[46](2009) 1 SCC 720.

[47](1999) 7 SCC 510.

[48](2009) 1 SCC 720.

[49](1999) 7 SCC 510.

[50](2014) 9 SCC 129.

[51](2014) 9 SCC 129.

[52](1999) 7 SCC 510.

[53](2009) 1 SCC 720.

[54]http://www.scconline.com/DocumentLink/72Mk5H3P.

Case BriefsHigh Courts

Bombay High Court:  Division Bench of V.K. Jadhav and Shrikant D. Kulkarni, JJ., addressed a case of ‘Honour Killing’ by a brother of his own real sister and upheld the sentence of the death penalty.

Appellant Accused’s sister who was married had a love affair with another person prior to her marriage.

In 2017, she had left her matrimonial home without informing anyone and later her husband lodged a missing report. Since the accused-appellant was aware of the love affair he had a suspicion about the whereabouts of his sister.

Pooja could not forget her love. Consequently, she had not only left her matrimonial home without informing anyone, however, she had called deceased Govind on his mobile. Against the advice of the brother-in-law PW 5 Shankar Gade, deceased Govind had given his address to deceased Pooja.

Deceased Pooja went to village Kharbala at the house of PW 5 Shankar Gade and joined the company of the deceased Govind. Meanwhile, appellant-accused Digambar was searching for deceased Pooja and Govind. He was suspecting that both of them are together.

Appellant-accused reached the village Kharbala at the house of PW-5 and made a statement before all of them including deceased Pooja and deceased Govind that he will perform their marriage, though PW5 had told appellant-accused Digambar that marriage was not possible because Pooja was already married. Digambar, however, told PW 5 that deceased Govind was his childhood friend and even deceased Pooja made a statement that she had faith in her brother accused that he would perform her marriage with the deceased.

In view of the above said, appellant-accused Digambar, appellant-accused Mohan, deceased Pooja and deceased Govind left that place on one motorcycle being driven by appellant-accused Mohan.

Analysis, Law and Decision

Territorial Jurisdiction Issue

High Court agreed with the observations recorded by the trial court that the inspection notes, the defence evidence and the spot panchanama, if considered, then the spot where the dead body of deceased Pooja was lying comes under the jurisdiction of Telangana State. However, the spot where the actual incident of murder was committed was situated in the river towards southern side of Mahagaon-Palaj river confluence (sangam) which comes under the jurisdiction of Maharashtra State.

Circumstantial Evidence

Bench opined that the entire case rested upon circumstantial evidence and there was no direct evidence in this case.

The prosecution established a link as to how even after marriage, deceased Pooja could not forget her love with deceased Govind and in consequence thereof, within one month and twelve days of her marriage with Jethiba Varshewar, she left her matrimonial home and went to the house of PW 5 to meet deceased Govind. Deceased Pooja left her matrimonial home with a determination to join the company of the deceased Govind.

Prosecution witness 5 and 6 revealed that the appellants accused had been to village Kharbala in exercise of the conspiracy hatched by them to eliminate Pooja and Govind.

Court noted that the manner in which the throats of both the deceased persons were slit, also indicated and gave a message that if the honour of the family is lowered down, the guilty thereof, are liable to be punished.

Hence, prosecution established the motive.

With regard to blood on weapon sickle, prosecution proved another link of circumstantial evidence that the blood on the clothes of appellant-accused Digambar and on the weapon was blood group “A”. There was no explanation from the appellant-accused about the same.

In the absence of proof of other circumstances, the only circumstance of last seen together and absence of satisfactory explanation cannot be made the basis of conviction.

In the present matter, Bench stated that the last seen theory was acceptable as the time gap between the point of time when the appellants-accused and both the deceased were last seen alive and both the deceased found dead is so small that the possibility of any other person than the accused being the author of the crime becomes impossible.

It was noted that both the appellants accused took deceased Pooja with them by giving her false assurance of her marriage with the deceased Govind and also took deceased Govind with them. Both the appellants-accused along with deceased Pooja and Govind left the house of PW 5 Shankar situated at village Kharbala, taluka Mudhol on one motorcycle being driven by appellant-accused no.2 Mohan leaving no chance for both the deceased persons to find out any other way of escape in case emergency so arises.

High Court added that, there was positive evidence about homicidal death, motive, so also the connecting evidence in the form of blood group of deceased appearing on the weapon and also on the cloths of the appellant-accused Digambar and thus, the circumstance of last seen together and the absence of satisfactory explanation on the part of the appellant-accused completed the chain of circumstantial evidence. 

There was no possibility of any other person meeting or approaching the deceased at the place of incident or before commission of crime in the intervening period.

 FIR given by accused

It is well settled that where the accused himself gives the first information report, the fact of his giving the information is admissible against him as evidence of his conduct under Section 8 of the Evidence Act.

Trial Court rightly observed that the said circumstance of confessional FIR was considered to the extent of the conduct of the appellant-accused Digambar under Section 8 of the Evidence Act.

High Court opined that there was sufficient positive evidence of homicidal death. The prosecution had established the chain of circumstantial evidence along with the motive on part of the appellant to commit murder.

Both the appellants failed to give a satisfactory explanation about the death of both the deceased persons when they were seen alive lastly in their company while leaving village Kharbala. Therefore, the death sentence of the accused person was confirmed for offence punishable under Sections 302, 201 read with 34 of Penal Code 1860 and Section 120-B IPC.

Capital Punishment and Mitigating Circumstances

Bench noted the fact that the incident in the present matter did not occur on the spur of the moment or a crime of passion, but craftily planned and meticulously executed.

The present crime is so grave as to shock the conscience of the society and would amount to the rarest of the rare.

 In the Supreme Court decision of Vasanta Sampat Dupare v. State of Maharashtra, (2015) 1 SCC 253, it was held that,

‘it is rarest of rare case and fit for imposition of death sentence. There are no mitigating circumstances. It is an act of taking advantage of absolute innocence. It is not only betrayal of individual trust but also betrayal of social trust. The act is an anathema to social balance. The act of the appellant shocks judicial conscience, conscience of the society and has a menacing effect on the society. His conduct and criminal antecedents reveal that he is and will be a menace to the society and cannot be reformed. Thus, there are no mitigating circumstances’.

In Bhagwan Dass v. State (NCT) of Delhi, (2011) 6 SCC 396, Supreme Court considered as to whether the death punishment can be awarded when the prosecution case rests on circumstantial evidence and particularly dealt with the issue of honour killing.

Court declined to accept the submission that the offence had been committed under the influence of extreme mental and emotional disturbance.

“We are shocked to see the manner in which deceased Pooja and deceased Govind were subjected to death.”

Elaborating its observation further, Bench stated that,

It was done not only with the sole intention to protect the honour of the family, and it was done by hatching conspiracy to punish both of them. The manner in which the throats were slit indicate the same. It was done with an intention to punish them so also to make it as a lesson for those who could dare to disobey the family.

The trial Judge had observed that the face of the accused was expressionless when the Court declared him guilty and there was no repentance at all.

Therefore, in view of the above, Court declined to consider the young age of the appellant-accused 1 and the possibility of his reformation.

High Court while reaching the conclusion expressed that the appellant accused could have cut off the social relations with Pooja and Govind, instead they opted to commit cold-blooded murder in a pre-planned and calculated manner.

In view of the above stated, Bench was not inclined to convert the death punishment of appellant-accused into life imprisonment. [State of Maharashtra v. Digambar, 2021 SCC OnLine Bom 5485, decided on 13-12-2021]

Case BriefsHigh Courts

Delhi High Court: Subramonium Prasad, J., reiterated the law relating to the territorial jurisdiction of the court to entertain a petition under Section 125 CrPC.

Instant petition was directed against the decision of Family Court wherein it dismissed the application filed by the petitioner husband under Section 126 CrPC stating that based on the documents submitted by the respondent wife, she is presumably staying in Delhi, and therefore, the jurisdiction for purposes of maintenance under Section 125 CrPC would be Delhi. The petitioner stated that the matrimonial home was in fact in Faridabad.

Analysis, Law and Decision

Section 125 of the Code of Criminal Procedure pertains to the Maintenance that is to be given by a man to their wife, parents and children in order for them to sustain themselves.

It is a tool for social justice enacted to ensure that women and children are protected from a life of potential vagrancy and destitution.

The Supreme Court has consistently upheld that the conceptualisation of Section 125 was meant to ameliorate the financial suffering of a woman who had left her matrimonial home; it is a means to secure the woman’s sustenance, along with that of the children, if any.

The statutory provision entails that if the husband has sufficient means, he is obligated to maintain his wife and children, and not shirk away from his moral and familial responsibilities.

In the Supreme Court decision of Bhuwan Mohan Singh v. Meena, (2015) 6 SCC 353, Supreme Court examined the underlying purpose as well as the social context of Section 125 of the Code.

Further, while deciding the matter of maintenance, it is important for the Court to bear in mind that technicalities such as jurisdiction should not impede the object that is sought to be achieved by a provision such as Section 125 CrPC which is essentially social welfare legislation.

The Bench stated that the Principal Judge carefully analysed the material on record before coming to the conclusion that territorial jurisdiction of the Court can be conferred in the case which has been instituted by the respondent/wife.

Adding to the above, Court noted that as per Section 126 CrPC, proceedings under Section 125 CrPC may be instituted against any person in any district where he is, or where he or his wife resides, or where he last resided with his wife, or as the case may be, with the mother of the illegitimate child.

Lastly, while concluding the matter, High Court expressed that as per the impugned Order herein, the fact that the parents of the Respondent/wife have two houses, i.e. one in Faridabad and the other in Vasant Kunj, Delhi, can only mean that territorial jurisdiction can be conferred in both Faridabad as well as Delhi.

Hence, the Court opined that the decision of Principal Judge was well-reasoned and there was no legal infirmity in the same. [Shikhar Goel v. Robina Kaushik, 2021 SCC OnLine Del 4989, decided on 16-11-2021]


Advocates before the Court:

For the Petitioner: Roma Bhagat, Advocate along with petitioner-in person

For the Respondent: None

Case BriefsHigh Courts

Delhi High Court: Asha Menon, J., emphasized the law on territorial jurisdiction while addressing the present matter.

Present petition was filed impugning the order of Additional District Judge.

Petitioner was the defendant before the Trial Court. Respondent had filed a suit against the petitioner/defendant for the recovery of a sum of Rs 28, 43, 209.68/.

The claim of the respondent was that it was a well-known manufacturer providing a portfolio of solutions for packaged power, diversified generation, electrical control and safety and energy optimization.

Petitioner/defendant was the regional stockists and distributors, who were appointed to procure/buy goods being traded by the respondent/plaintiff and supply them to wholesalers and retailers of the respondent/plaintiff in the market, who, in turn, would sell the same to the consumers.

Further the respondent/plaintiff claimed that a running current account was maintained with the petitioner/defendant against which a statement of account/ledger was regularly maintained by it in the normal course of business.

A sum of Rs 28,43, 209.68 was due and payable by the petitioner/defendant. Hence the present suit was filed.

Petitioner/Defendant’s counsel, Deepika Mishra submitted that Trial Court had fallen into error in determining its jurisdiction as it relied on English case law that the ‘debtor must seek the creditor’, whereas it was bound to follow Section 20 of the Civil Procedure Code, 1908.

Section 20 clearly provides that a Court within whose local limits the cause of action, “wholly or in part”, arises, would have territorial jurisdiction to try the suit.

The registered office of the petitioner/defendant was in West Bengal.

Petitioner/Defendant’s counsel submitted that the invoice itself recorded a Kolkata address. The warehouse was also stated to be located in West Bengal and therefore, the goods were neither dispatched from Delhi nor the invoices were raised at Delhi. counsel for the respondent/plaintiff pointed to the “subject to jurisdiction of court of Delhi only” clause in the invoices. There does not appear to have been any demurrer by the petitioner/defendant against this clause.

Hence, in light of Section 20 of CPC, the Court found some strength in the contention of respondent/plaintiff that on the basis of the ‘place of work’ of the petitioner/defendant, as well as the part cause of action of supply of goods, both reflected jurisdiction of the West Bengal courts.

However, the respondent/plaintiff has also claimed that payments were to be received in Delhi and therefore, part cause of action has arisen in Delhi and as such, the clause in the invoices referred to hereinabove did not confer jurisdiction at a place which had no jurisdiction.

In Court’s opinion, the suit could be filed at Delhi and Trial Court had not committed any error in answering the preliminary issue.

Bench stated that, when the part cause of action had arisen on account of the payments made by the petitioner/defendant directly into the bank account of respondent/plaintiff, even if these were not on regular basis, and there is nothing to show that the place of payment had been fixed, even without following the principle that the ‘debtor must seek out the creditor’, it was clear that the Delhi Courts have jurisdiction to try the suit and the invoice does not vest jurisdiction in a court which had no jurisdiction at all.

In view of the foregoing discussion, the High Court found no merit in the petition. [Auto Movers v. Luminous Power Technologies (P) Ltd.,  2021 SCC OnLine Del 4387, 16-09-2021]


Advocates before the Court:

For the petitioner: Deepika Mishra, Advocate

For the respondent: Pallav Saxena, Deepak Chawla, Aruj Dhingra and Neeraj Malik, Advocates

Case BriefsHigh Courts

Delhi High Court: Sanjeev Narula, J., while addressing the present matter held that prima facie view on territorial jurisdiction has to be on the basis of averments made in the plaint, and the documents relied upon by the plaintiff and in case the same brings out the ingredients for establishing the jurisdiction of the court, that would be sufficient for the court to assume jurisdiction.

Instant suit was filed to seek a permanent injunction restraining infringement of trademark and passing off; infringement of copyright, trade dress, breach of confidentiality; misappropriation of trade secrets, etc.

Further, it was noted that defendant 1 was based in Ahmedabad, defendant 2 in Chandigarh and defendants 3 and 4 in Punjab, whereas the plaintiff was based in Chandigarh.

Defendant 1 sought the return of the plaint on the following grounds:

  • Defendant 1 has its registered office in Ahmedabad and has been operating its business from the said jurisdiction. The plaintiffs have also admitted that they have been operating in Ahmedabad and other cities of Gujarat.
  • Claims of the Plaintiffs regarding the alleged violation of the impugned rights as well as alleged confusion caused in the market relate to Ahmedabad and other cities of Gujarat and therefore if at all there was any cause of action in favour of the plaintiffs, the same would have accrued in Ahmedabad, Gujarat and certainly not in Delhi. Plaintiffs deliberately chose to file the present proceedings before the Court to cause hardship and inconvenience to defendant 1, even though proper jurisdiction to file the present suit would have been Ahmedabad, Gujarat.
  • Address reflected on the trademark applications/registrations on which the plaintiffs have based their claims and grounds are also of Chandigarh.
  • Further, it was stated that it is settled that jurisdiction can only be invoked on the basis of online presence if the allegedly infringing article can be purchased online within the said jurisdiction.

Plaintiff submitted that since the defendants have been contacting the parties at Delhi for establishing their franchisees, including plaintiffs’ Master Franchisee in Delhi for converting them to the Defendants Master Franchiseee. Therefore, the cause of action arose in Delhi. Further, he added that in case the defendants do not intend to expand their operation in Delhi, they should make a statement to that effect.

Analysis, Law and Decision

Bench held that the question of territorial jurisdiction in matters relating to infringement of trademarks is well-settled.

Stating that Section 134(2) of the Trade Marks Act, 1999 and also Section 62(2) of the Copyrights Act, 1957 are in addition to Section 20 of the CPC, Court opined that, the plaintiff was entitled to file the suit for infringement of trademark where the cause of action arose under Section 20(c) of CPC.

High Court found that the averments made in the plaint disclose a cause of action in Delhi.

Further, it was stated that the plaintiffs contended that the defendant were openly and publicly expressing their intention to expand all across the country and were entertaining franchisee queries within the territory of Delhi.

Bench found the contention of defendants that mere alleged apprehension in the pleadings, unsubstantiated by documentary evidence, can never be a basis to seek jurisdiction – incorrect.

Considering the nature of business, the prior relationship of the parties, and the business format of establishing franchisees, it cannot be assumed that the Plaintiffs’ allegations are mis-founded or could be construed as false, in absence of any documentary proof.

In view of the above, the occurrence of the cause of action, jurisdiction, which was the determinative factor under Section 20 of the CPC, clearly vests in this Court and defendant would have to prove their contentions during the trial.

Matter to be listed for arguments on remaining applications on 21-9-2021. [Copenhagen Hospitality and Retail v. A.R. Impex,    2021 SCC OnLine Del 3899, decided on 29-7-2021]


Advocates before the Court:

For the Plaintiffs:

Mr. Chander M. Lall, Senior Advocate with Mrs. Bindra Rana, Mr. Vikrant Rana, Mr. Priya Adlakha, Ms. Tanvi Bhatnagar, Ms. Rima Majumdar, Ms. Nancy Roy and Ms. Ananya Chug, Advocates.

For the Defendants:

Mr. Neeraj Grover, Advocate with, Mr. K.C. Patel, Mr. Naqeeb Nawab, Mr. Himanshu Deora, Mr. Shashwat Rakshit & Mr. Raghav Vig, Advocates for D-1.

Mr. Gautam Singh, Advocate for D-2.

Case BriefsHigh Courts

Delhi High Court: Jayant Nath, J., held that,

Exception 3 to Section 28 of the Contract Act deals with curtailment of the period for the creditor to approach the court/tribunal to enforce his rights. It does not in any manner deal with the claim period within which the beneficiary is entitled to lodge his claim with the bank/guarantor.

In the present petition, the dispute centred around the interpretation of Section 28 of the Indian Contract Act, 1872.

Petitioner submitted that based on an erroneous interpretation of Section 28 of the Indian Contract Act, 1872 respondent bank forced a mandatory and unalterable claim period of a minimum of 12 months for the bank guarantee.

Further, it was stated that the claim period is a time period contractually agreed upon between the creditor and principal debtor, which provided a grace period beyond the validity period of the guarantee to make a demand on the bank for a default, which occurred during the validity period. Adding to the said, it was stated that the said claim period may or may not even exist in a bank guarantee.

As per respondent PNB, a claim period in a bank guarantee which was less than 12 months would render the claim period void and would effectively increase the claim period under the bank guarantee to 3 years under the Limitation Act, 1963.

Respondent 2 stated that it would be open for the banks to stipulate as a condition precedent that if the claim was not lodged before a stipulated time, the bank guarantee shall be revoked or terminated but the stipulated date cannot be less than one year in any event.

Petitioner 1’s case was that it had a number of contracts with Government Bodies and Public Sector Undertakings. Petitioner used to normally issue ‘Performance Bank Guarantee’ or ‘Advance Bank Guarantee’ in the course of performance of the contract.

It was pleaded that on a complete misinterpretation of Section 28 of the Contract Act, respondent 1 bank insisted that the claim period should be 12 months. Adverse fallout for the petitioner of such interpretation was that the petitioner was unnecessarily made liable to pay commission charges for such extended bank guarantee when as per the contract between the principal debtor and the creditor, the claim period would be much shorter.

The extended claim period affected the petitioners’ capability to do business by entering into new contracts and affected the fundamental rights of the petitioners under Article 19(1)(g) of the Constitution of India. 

Analysis, Law and Decision

Bench stated that under Article 226 (2) of the Constitution of India, order or writ can be issued by a High Court in relation to territories within which the cause of action wholly or in part arises.

Whether a high court has territorial jurisdiction to entertain a writ petition? 

Court stated that while entertaining a writ petition, the doctrine of forum convenience and nature of the cause of action are also required to be scrutinized by the High Court.

Since the part of the cause of action arose within the territory of this Court, it would have territorial jurisdiction to adjudicate the instant petition.

High Court held that limiting the time within which the rights are to be enforced is void provided the rights to be enforced under the Contract continue to exist even beyond the shorter agreed period for enforcing the rights.

Further, the Court added that, if beyond the shorter period agreed between the parties, the rights under the contract are not kept alive, no limiting of the time to enforce the rights under the contract arises and such an agreement putting a time limit to sue will not be hit by Section 28 of the Act.

Section 28 prior to the amendment

Bench noted that Section 28 of the Contract Act prior to the amendment provided that a clause limiting the time within which the rights are to be enforced, is void, if the right to be enforced under the Contract continued to exist even beyond the shorter period agreed for enforcing the rights.

If beyond the shorter period agreed between the parties for enforcing the rights, the rights under the contract are not kept alive, then such an agreement putting a time limit to sue was not hit by Section 28 of the Contract Act. 

Why was the newly added Section 28 of the Contract Act enacted?

The said was enacted to do away with the earlier distinction between remedy and rights i.e., a clause barring the remedy only was void but a clause extinguishing a right was valid.

Adding to the above, Bench stated that the said clause now provides that the beneficiary of the bank guarantee i.e. creditor would have time to approach the appropriate court for enforcement of his rights under the bank guarantee in terms of the provision of the Limitation Act i.e. 3 years for private parties and 30 years for government parties.

Later, the T.R. Andhyarujina Committee recommended that the said period be reduced to one year for enforcing the rights under the bank guarantee. Thereafter, Exception 3 to Section 28 of the Contract was added in 2013.

Hence,

Exception 3 to section 28 of the Contact Act deals with the rights of a creditor to enforce his rights under the bank guarantee after happening of a specified event. 

Respondent in its counter-affidavit admitted that, Exception 3 to section 28 of the Contract Act deals with a clause in a bank guarantee to the effect that in case no claim is filed before the court of law within a period which is not less than 12 months from the date of occurring or non- occurring of the specified event, the liability of the bank shall get extinguished. Such a term is not contrary to law.

While concluding the matter, the Court stated that respondent 1 erred in taking the view that they were in law mandated to stipulate a claim period of 12 months in the bank guarantee failing which the clause shall be void under Section 28 of the Contract Act.

Section 28 deals with right of the creditor to enforce his rights under the bank guarantee in case of refusal by the guarantor to pay before an appropriate court or tribunal.

Therefore, all the communications issued by respondent 1 reproduced erroneous interpretation of Exception 3 to Section 28 of the Contract Act and were clearly vitiated.

Issue of prescribing the bank charges and the period for retention of security

Court held that the above-stated issue were matters of contract and this Court cannot interfere in such contractual matters.

In view of the above discussion, petition was disposed of. [Larsen & Toubro Limited v. Punjab and National Bank, 2021 SCC OnLine Del 3827, decided on 28-07-2021]


Advocates before the Court:

For the Petitioners: Mr Neeraj Kishan Kaul, Sr. Adv. with Mr Rishi Agrawala, Mr Karan Luthra, Ms Megha Bengani, Mr Deepak Joshi and Mr Aakash Lamba, Advs.

For the Respondents: Mr Dhruv Mehta, Sr. Adv. with Mr Rajesh Gautam, Mr Anant Gautam and Mr Nipun Sharma, Advs. for R-1/PNB.

Dr Lalit Bhasin, Ms Nina Gupta, Ms Ananya Marwah, Ms Ruchika Joshi and Mr Ajay Pratap Singh, Advs. for R- 2/IBA.

Mr Ramesh Babu, Ms Nisha Sharma and Ms Tanya Chowdhary, Advocates for RBI/R-3

Case BriefsHigh Courts

Jammu and Kashmir High Court: Javed Iqbal Wani, J., while allowing the instant bail application, made significant observations pertaining with conditions to bail.

Brief Facts

The applicant as submitted in his application affirms that, he was falsely implicated in the said FIR and arrested in the month of June, 2019. Subsequently, he moved a bail application before the trial court that remained pending due to the outbreak of pandemic and no hearing was called. Later, he moved a second bail application which was dismissed on 02-06-2020 without affording him an opportunity of hearing through virtual mode. It is further stated that the trial court declined the bail application without considering the material produced before it and in the process passed a perverse order, committing grave illegality. Furthermore, it is an undisputed fact that the applicant has been under detention for over 14 months without even a fair occasion of hearing.

Contentions

It was the argument for the counsel of applicant that, (1) he has been falsely implicated without cogent reasons, (2) no fair hearing has been given until the present date, (3) plea of parity be considered as a co-accused in the same matter has been bailed out by this Court, (4) entitlement to bail under the guidelines issued by a High Power Committee constituted pursuant to the directions by the Supreme Court.

The Prosecution insisted on rejection of the bail application citing, (1) commission of serious, grave and reprehensible nature of offences, (2) voluntary and intentional hatching of criminal conspiracy.

Observation

The Court made the following observation in light of the facts and circumstances of the present case; “While considering an application for bail, it is well settled by the catena of judgments of the Apex Court that court must not go deep into merits of the matter while considering an application for bail. All that needs to be established from the record is the existence of prima facie case against the accused. Since charge sheet has been filed in the trial court, the presence of the applicant would be required only during the trial which in view of the present situations may consume a long time and as such the applicant cannot be held in custody for so long.” Since the application is also made citing parity as a co-accused is the same matter was granted bail by this Court, it was remarked, Parity cannot be the sole ground for granting bail yet if on examination of a given case it transpires that the case of applicant before the Court is identically similar to the accused on facts and circumstances who has been bailed out, then the desirability of consistency will require that such an accused should also be released on bail.”

Decision

While allowing the bail application, the Court enlisted five conditions illustratively, (1) To furnish a personal bond to the tune of Rs 1 lac, (2) To surrender and deposit passport, (3) Not to leave the territorial jurisdiction of the present Court without permission, (4) Not to influence the prosecution witness, directly or indirectly, (5) To face the trial without any fail.[Bharat Bhushan v. UT of J&K,  2020 SCC OnLine J&K 496, decided on 11-09-2020]

Case BriefsSupreme Court

Supreme Court: The single judge bench of V. Ramasubramanian, J has held that

  • the issue of jurisdiction of a court to try an “offence” or “offender” as well as the issue of territorial jurisdiction, depend upon facts established through evidence;
  • if the issue is one of territorial jurisdiction, the same has to be decided with respect to the various rules enunciated in sections 177 to 184 of the Code; and
  • these questions may have to be raised before the court trying the offence and such court is bound to consider the same.

DETERMINATION OF JURISDICTION OF CIVIL COURTS VIS-À-VIS CRIMINAL COURTS

While jurisdiction of a civil court is determined by (i) territorial and (ii) pecuniary limits, the jurisdiction of a criminal court is determined by (i) the offence and/or (ii) the offender. But the main difference between the question of jurisdiction raised in civil cases and the question of jurisdiction arising in criminal cases, is two-fold i.e.

CIVIL COURT

CRIMINAL COURT

The stage at which an objection as to jurisdiction, territorial or pecuniary, can be raised, is regulated in civil proceedings by Section 21 of the Code of Civil Procedure, 1908. There is no provision in the Criminal Procedure Code akin to Section 21 of the Code of Civil Procedure.
In civil proceedings, a plaint can be returned, under Order VII, Rule 10, CPC, to be presented to the proper court, at any stage  of  the  proceedings But in criminal proceedings, a limited power is available to a Magistrate under section 201 of the Code, to return a complaint.  The power is limited in the sense that:

 

  1. it is available before taking cognizance, as section 201 uses the words “Magistrate who is not competent to take cognizance”
  2. the power is limited only to complaints, as the word “complaint”, as defined by section 2(d), does not include a “police report”.

“TRIES AN OFFENCE” VERSUS “TRIES AN OFFENDER” UNDER SECTION 461(l) CrPC, WHICH IS MORE APPROPRIATE?

The rules relating to territorial jurisdiction are given in Chapter XIII in detail. However, it is in that Chapter XXXV that one has to search for an answer to the question as to what happens when a court which has no territorial jurisdiction, inquires or tries an offence.

A cursory reading of Section 461(l) and Section 462 gives an impression that there is some incongruity. Under Clause (l) of Section 461 if a Magistrate not being empowered by law to try an offender, wrongly tries him, his proceedings shall be void.

“A proceeding which is void under Section 461 cannot be saved by Section 462.”

The focus of clause (l) of Section 461 18 is on the “offender” and not on the “offence”. If clause (l) had used the words “tries an offence” rather than the words “tries an offender”, the consequence might have been different.

Section 460, which lists out nine irregularities that would not vitiate the proceedings, uses the word “offence” in three places namely clauses (b), (d) and (e).  Section 460 does not use the word “offender” even once. On the contrary Section 461 uses the word ‘offence’ only once, namely in clause (a), but uses the word “offender” twice namely in clauses (l) and (m).

“Therefore, it is clear that if an offender is tried by a Magistrate not empowered by law in that behalf, his proceedings shall be void under Section 461. Section 462 does not make the principle contained therein to have force notwithstanding anything contained in Section 461.”

Hence, the jurisdiction of a criminal Court is normally relatable to the offence and in some cases, to the offender, such as cases where the offender is a juvenile (section 27) or where the victim is a women [the proviso to clause (a) of section 26]. But Section 461(l) focuses on the offender and not on the offence. The saving clause contained in Section 462 of the Code of 1973 is in pari materia with Section 531 of the Code of 1898.

Considering the aforementioned scheme of CrPC, the Court held that the words “tries an offence” are more appropriate than the words “tries an offender” in section 461 (l). This is because, lack of jurisdiction to try an offence cannot be cured by section 462 and hence section 461, logically, could have included the trial of an offence by a Magistrate, not empowered by law to do so, as one of the several items which make the proceedings void.

“In contrast, the trial of an offender by a court which does not have territorial jurisdiction, can be saved because of section 462, provided there is no other bar for the court to try the said offender (such as in section 27). But Section 461 (l) makes the proceedings of a Magistrate void, if he tried an offender, when not empowered by law to do.”

[Kaushik Chatterjee v. State of Haryana, 2020 SCC OnLine SC 793, decided on 30.09.2020]

Case BriefsHigh Courts

Sikkim High Court: Bhaskar Raj Pradhan, J., while exercising inherent powers under Section 482 CrPC quashed the criminal complaint filed against the petitioners for the offences punishable under Sections 405, 420 and 441 read with Section 120-B IPC. Warrants issued against the petitioners by the Magistrate in the same case were also quashed.

The parties were involved in a landlord-tenant dispute, pursuant to which the said complaint was filed by the landlord. Magistrate took cognizance and issued process against the petitioners. Aggrieved, they filed the instant petition. It was an admitted fact that the petitioners resided beyond the territorial jurisdiction of the Magistrate concerned.

Dismissing Chapter 15 of CrPC which deals with complaints to Magistrates, the High Court relied on Birla Corpn. Ltd. v. Adventz Investments & Holdings Ltd., 2019 SCC OnLine SC 682, wherein the Supreme Court held that under the amended sub-section (1) to Section 202 CrPC, it is obligatory upon the Magistrate that before summoning the accused residing beyond its jurisdiction. he shall inquire into the case himself or direct the investigation to be made by a police officer or by such other person as he thinks fir for finding out whether or not there is sufficient ground for proceeding against the accused. The Supreme Court also held that the order of the Magistrate must reflect that he has applied his mind to the facts of the case and the law applicable thereto. It was also held that the application of mind has to be indicated by disclosure of mind on the satisfaction and considering the duties of the magistrates for issuance of summons to accused in a complaint case, there must be sufficient indication of it. The Supreme Court after referring to a catena of its previous judgments held that summons may be issued if the allegations in the complaint, the complainant statement and other materials would show that there are sufficient grounds for proceeding against the accused.

The records of the instant matter, however, did not reveal that the Magistrate had complied with the provisions of Section 202 CrPC and applied her mind to the facts of the case and the law applicable thereto. The order of taking cognizance stated that “cognizance of the matter is taken against accused no. 1, 2, 3 and 4”. Section 190 CrPC deals with cognizance of offence by Magistrate, which provides that the Magistrate “may take cognizance of any offence.” It is settled law that cognizance is taken of the offence and not the offender. The Magistrate did not even mention which of the offences she had taken cognizance of.

It was, thus, held that the Magistrate failed to exercise her discretion to issue summons against the petitioners residing beyond her territorial jurisdiction in the manner required. Even otherwise, considering the allegations, it was found that there was no material before the Court to proceed under criminal jurisdiction. [Mohd. Yusufuddin Ahmed v. Ruth Karthak Lepchani, 2019 SCC OnLine Sikk 198, decided on 07-12-2019]

Case BriefsHigh Courts

Jammu & Kashmir High Court: Dhiraj Singh Thakur, J. allowed a petition to direct the CBI to take charge of the present case.

The petitioner filed a Habeas Corpus Petition seeking appropriate direction to respondents to produce her son, who went missing in the custody of respondents. Petitioner also prayed for referring the investigation into the matter by the constitution of a Special Investigation Team (SIT) or in the alternative to refer the matter to the Central Bureau of Investigation (CBI).

The petitioner’s son, Shakeel Ahmed, went missing on his way to Zairat at Kaliar Sharief in Roorkie, Uttrakhand under the custody of the respondents. The matter was investigated initially by the appropriate Police Station, as an FIR under Section 364 RPC was filed. The investigating officer recorded the statement of witnesses under Section 161 of CrPC and called the accused persons to the Police Station and interrogated them. However, no fruitful result was obtained pursuant to which, the investigating officer closed the case. The matter was again reopened by the Zonal Police Head Quarter and a Special Investigation Team (SIT) was formed by the Senior Superintendent of Police. However, the SIT also failed to arrive at any conclusion and was clueless about the disappearance of the son of the petitioner.

The respondents contended that the matter if referred to Crime Branch, should also involve the territorial jurisdiction between the two States i.e. the State of Jammu and Kashmir and the State of Uttrakhand.

The High Court allowed the appeal and was of the view that since the investigation would involve the areas beyond the territorial jurisdiction of the State of J&K where the Crime Branch cannot have any jurisdiction, it would be appropriate to refer the matter for investigation to the CBI under Section 364 of RPC. The Court also held that “it cannot be a silent spectator to the disappearance of the son of the petitioner who needs to be recovered and the matter investigated at the earliest.”[Sabza Begum v. State of J&K, 2019 SCC OnLine J&K 666, decided on 08-07-2019]

Case BriefsHigh Courts

Delhi High Court: The Bench of Sanjeev Sachdeva, J. dismissed a revision petition filed by the husband against the judgment of the trial court whereby his application under Order 7 Rule 11 CPC impugning the proceedings filed by the wife on the ground of territorial jurisdiction was rejected.

Sanjay S. Chhabra with Satish Chaudhary, Advocates for the petitioner argued that the present application by the wife under Section 125 CrPC was not maintainable at Delhi because in all proceedings except the present one she had mentioned her residential address at Aligarh, U.P. Per contra, it was submitted on behalf of the wife by Saurabh Soni with Mannat Singh, Advocates that she was residing in Delhi with her brother since 2008.

The High Court perused Section 126(1) CrPC which deals with the place of the institution of proceedings under Section 125. It was observed, “Section 126(1) does not contemplate permanent place of residence. Even a place where the wife is for the time being residing would confer jurisdiction on such a court, where she is residing. However, residence temporarily acquired solely for conferring jurisdiction would not satisfy the requirements of Section 126(1).”In view of the law that wife can maintain a petition under Section 125 at any place where she is residing and the fact that she placed on record proof that reflected her address at Delhi, it was held that the trial court did not commit any error in rejecting husband’s application. The petition was dismissed for being without merit.[Sachin Gupta v. Rachna Gupta, 2019 SCC OnLine Del 6632, dated 21-01-2019]

Case BriefsHigh Courts

Kerala High Court: A Single Judge Bench comprising of Dama Seshadri Naidu, J. while hearing an original petition in a debt recovery matter ruled that where a Tribunal exercises its jurisdiction over more than one State, then the High Court in the State where the first court is located has supervisory jurisdiction over the said Tribunal.

In a recovery proceeding filed by the respondent bank, petitioner purchased a secured asset brought for sale by the bank. Defaulting borrowers filed an application before Debts Recovery Tribunal (DRT), Ernakulam which set aside the sale in favour of petitioner. Aggrieved thereby, bank filed an appeal before Debts Recovery Appellate Tribunal (DRAT), Chennai wherein the petitioner pleaded that he had parted with his money and purchased the property on bank officials’ assurance. But since the property was now entangled in legal proceedings, he did not wish to contest the proceedings and wanted his money back with interest and damages. In this backdrop, the present petition was filed seeking a direction to DRAT, Chennai for early disposal of the appeal.

The respondent bank raised an objection as to maintainability of the petition in view of territorial jurisdiction. Thus, the question for Court’s consideration was as to whether it could assume supervisory jurisdiction over DRAT, Chennai.

Relying on the dictum of Apex Court in Ambica Industries v. CCE, (2007) 6 SCC 769 it was held that when the High Court exercises its jurisdiction over a Tribunal extending its jurisdiction over more than one State, then the High Court in the State where the first court is located would be the proper forum. In the instant case, the primary forum was DRT, Ernakulam and as such the High Court could eminently exercise its supervisory jurisdiction over DRAT, Chennai.

The petition was allowed directing DRAT to dispose of the appeal within three months.[Thomas Chacko v. Bank of India,2018 SCC OnLine Ker 4915, decided on 01-11-2018]

Case BriefsSupreme Court

Supreme Court: A Bench comprising of A.K. Sikri and Ashok Bhushan, JJ. dismissed an appeal filed against the judgment of the Division Bench of the Madras High Court whereby it held it had no jurisdiction to adjudicate the dispute in question.

In short, the real essence of the dispute was that the plaintiffs, resident nationals of Dubai, had filed a derivative action on behalf of a company incorporated in Dubai. They held 34% shareholding in the said company, whereas the defendants held 66% of the shares. The defendants also held around 6.16% shares in Star Health and Allied Insurance Co. Ltd., a company incorporated in Chennai, India. According to the plaintiffs, these shares actually belonged to the company registered in Dubai mentioned above. Since Star Health was incorporated in Chennai, the plaintiffs instituted a suit in Madras High Court to protect an declare the beneficial interest of the Dubai company in the said 6.16% shares. A Single Judge of the High Court admitted the suit; however, on appeal by the defendants, the Division Bench held that it had no territorial jurisdiction to adjudicate in the matter. Aggrieved thus, the plaintiffs filed the instant appeal.

On perusal of the facts, the Supreme Court noted that the plaintiffs made certain averments to the said Dubai Company being the real owners of the shares held by the defendants in the Indian Company, which was denied by the defendants. In reality, it was a dispute between the plaintiffs and defendants, all of who were residents of Dubai. Even the company whose beneficial interest was claimed was incorporated in Dubai. The Court held inter alia, that merely because the dispute is about shares issued by an Indian Company would not lead to the conclusion that cause of action has arisen in India. As a consequence, the Madras High Court has no territorial jurisdiction to adjudicate the matter. Accordingly, the judgment impugned was upheld and the appeal was dismissed. [Ahmed Abdulla Ahmed Al Ghurair v. Star Health and Allied Insurance Company Ltd.,2018 SCC OnLine SC 2554, decided on 26-11-2018]

Case BriefsHigh Courts

Kerala High Court: A Single Judge Bench of Annie John, J., allowed an appeal filed against the order of the trial court whereby accused was found guilty for the offence punishable under Section 58 of the Kerala Akbari Act.

The main issue that arose before the Court was whether the order of the trial court was good in law.

The Court observed that there was several loopholes in the investigation conducted by the police. Firstly, the sample of the contraband articles was sent to the Court after a delay for 4 days and such delay was unexplained by the prosecution. Secondly, the chemical analysis report was unclear and lastly, the forwarding note did not contain a sample seal. The appellant relied upon the case of Ramankutty v. Excise Inspector, Chelannur Range, 2013 (3) KHC 308, wherein it was held that an accused becomes entitled to the benefit of doubt if there is an unexplained delay on the part of the prosecution. The Court found this case applicable to the facts and circumstances of the instant case and it also observed that it was the duty of the prosecution to prove that the contraband articles were produced before the Court without any sort of tampering. The investigation under the Kerala Akbari Act could be conducted by the Akbari Officer appointed by the state government and every Akbari Officer had a territorial jurisdiction, however, in the instant case, the investigating officer was not authorized to investigate the matter since it was outside his territorial jurisdiction.

The Court after considering all the lacunae in the investigation held that the order of the trial court was liable to be set aside since it was based on such faulty investigation. Resultantly, the appeal was allowed and the order of the trial court was set aside.[Ravi v. State,2018 SCC OnLine Ker 4640, order dated 30-10-2018]

Case BriefsHigh Courts

Punjab & Haryana High Court: A Single Judge Bench of Amol Rattan Singh, J., dismissed a petition filed against the order of the lower court whereby the application of the petitioner under Order VII, Rule 11 of CPC was dismissed.

The main issue that arose before the Court was whether the lower court had the territorial jurisdiction to hear the petition under Section 25 of the Guardian and Wards Act, 1990 read with Section 10 of the Hindu Minority and Guardianship Act, 1956 and Section 26 of the Hindu Marriage Act, 1955.

The Court observed that the application in respect of the guardianship of the minor is to be made to the District Court having jurisdiction in the place where minor ordinarily resides. The Court referred to the case of Sunita Jain v. Mittar Sain Jain2002 SCC OnLine P&H 869, wherein it was held that the place of residence of a minor child below 5 years of age would be the place of residence of the mother. The custody of a child below 5 years of age (especially a female child), would naturally lie with the mother, and therefore the deemed custody would be with the mother even if actual custody was with the father.

The Court held that in the instant case the age of the child was 11 months and hence applying the rule laid down in Sunita Jain’s case, the natural custody of such child would lie with the mother. Hence, the petition for the guardianship of the child was rightly instituted before the District Court of Khadur Sahib. Resultantly, the petition of the petitioner was dismissed and the order of lower court was upheld. [Tejbir Singh v. Baljit Kaur, 2018 SCC OnLine P&H 1682, order dated 02-11-2018]

Case BriefsHigh Courts

Kerala High Court: A Division bench comprising of P.R. Ramachandra Menon and Devan Ramachandran, J. while hearing an appeal against the order of a Single judge held that denial of pension benefits to a person residing in a particular State, vests him with the locus standi to file the writ petition challenging such denial in that State.

The appellant, who worked in the Assam Rifles in Shillong, was discharged from service on medical grounds which entitled him to disability pension. However, when he was not sanctioned full pension, he made a representation to competent officials but the same was rejected. The appellant submitted that after he was discharged from service, he had no financial resources to continue to live in Meghalaya and therefore he was constrained to come to Kerala.

The only issue involved in the matter was as to whether this Court had territorial jurisdiction to entertain the appellant’s writ petition.

Relying on the dictum of  Apex Court in Nawal Kishore Sharma v. Union of India, (2014) 9 SCC 329, the  High Court observed that when a party residing within the jurisdiction of a court was denied the benefit of pension by an authority, a part of cause action could be said to have arisen within the jurisdiction of that Court. It is settled law that under Article 226 of the Constitution of India, writ jurisdiction can be exercised by any High Court, if any part of the cause of action, wholly or in part, arises within its territorial limits.

The Court noted that the request for disability pension was made from Kerala and its rejection was communicated to the petitioner in Kerala. Thus, the appeal was allowed holding that this Court was vested with territorial jurisdiction to entertain the present matter. [K.T. Sudharshanan v. Union of India,2018 SCC OnLine Ker 4003, decided on 28-09-2018]

Case BriefsForeign Courts

Supreme Court of Pakistan: A Division bench comprising of Mushir Alam and Sajjad Ali Shah, JJ. while hearing a civil petition for leave to appeal, held that objections as to territorial jurisdiction must be raised at the earliest possible opportunity.

Respondent company, which was in the possession of mining lease for certain areas by way of assignments and agreements had filed a suit in trial court seeking an injunction against petitioner to not carry out mining activity in those areas. The trial court decreed in favour of the respondent/ plaintiff, and against this order, the petitioner/ defendant filed an appeal in High Court raising objections as to territorial jurisdiction. The High Court held that since the matter in issue pertained to an area of mining lease and rights thereon, it did not directly relate to right and interest in the immovable property, and thus the suit could be filed at the place where the cause of action had arisen in whole or in part. It was further held that since the petitioner had not raised the said objection timely, it amounted to waiver on his part. Aggrieved by the said order of High Court, the present petition was filed by petitioner.

At the outset, the Supreme Court relied on Australian Apex Court’s case of Sojitz Coal Resources Pty. Ltd. v Commissioner of State Revenue, (2015) QSC 9 to hold that mining lease means rights and interest in mines/minerals in and on the surface of the land. Therefore, a mining lease does not constitute an estate or interest in land but is instead regarded as movable property.

Further, the  Court held that as per Section 21 of the Code of Civil Procedure, 1908 objections as to territorial jurisdiction must be raised before the Court of first instance at the earliest possible opportunity. Such objections can be considered by the appellate or revisional court only if the three conditions set down in Section 21 CPC are met viz.: (i) objection as to territorial jurisdiction was raised in the Court of the first instance, (ii) such objection is raised at the earliest opportunity, and (iii) there has been consequent failure of justice. It relied on the judgment of Indian Supreme Court in Pathumma v Kuntalan Kutty, (1981) 3 SCC 589 to hold that the aforesaid three conditions must co-exist in order that an appellate or revisional court consider a territorial jurisdiction objection.

The Court noted that in the instant case, the petitioner instead of raising objections as to territorial jurisdiction in the trial court at the earliest opportunity had engaged in a long drawn battle in High Court and Supreme Court. Thus, the present petition was dismissed for lack of merits. [Malik Khan Muhammad Tareen v. Nasir & Brother Coal Company,2018 SCC OnLine Pak SC 1, decided on 03-10-2018]

Case BriefsHigh Courts

Uttaranchal High Court: An application for appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, was dismissed by a Single Judge Bench comprising of Sudhanshu Dhulia, J., holding that the property in question was in Delhi and thus the present application was barred by want of territorial jurisdiction.

A contract was executed between the applicant and the respondent at Delhi for lending out hydraulic compressors installed at various sites in Delhi. The agreement had an arbitration clause and as a dispute arose between the parties, the applicant gave an arbitration notice to the respondent. Since the respondent failed to comply with the notice, the applicant filed the instant application. The respondent objected as to the maintainability of the application on grounds of jurisdiction as the contract was executed in Delhi, parties resided in Delhi, and also the said hydraulic compressors were installed in Delhi.

The Court observed that cause of action is a bundle of facts. The Court perused provisions of the Transfer of Property Act as well as the General Clauses Act to hold that the hydraulic compressors were permanently fastened to earth and therefore, they were an immovable property. The applicant relied on Section 20 of CPC to contend that as the office of the applicant was registered at Haridwar, the courts in Uttarakhand have jurisdiction in the matter. However, the High Court dismissed the contention holding that Section 20 is subject to the provisions of Sections 15-19 of CPC. Only if the case does not fall within the purview of Sections 15-19, then Section 20 comes into play. The Court finally held that as the property was situated in Delhi, therefore, in light of Section 16 of CPC, the courts having jurisdiction to decide the matter were the courts at Delhi. Consequently, the arbitration application was dismissed. [Sri Hanuman Trust v. Indian Compressor Ltd., 2018 SCC OnLine Utt 211, dated 26-03-2018]