“‘Court Lacking Inherent Jurisdiction Cannot Be Vested With It By Consent’: J&K High Court Quashes Proceedings in Negotiable Instruments Act Complaint”
Isabella Mariam
The High Court of Jammu & Kashmir and Ladakh at Jammu, Single Bench of Justice Sanjay Dhar set aside a trial court's cognizance order due to lack of territorial jurisdiction in a case arising under Section 138 of the Negotiable Instruments Act.
The Court directed that the complaint filed against the petitioner and his proprietary concern be returned to the complainant for presentation before a Magistrate having proper jurisdiction. This followed a detailed judicial inquiry into whether the Jammu court could validly try a complaint relating to a dishonoured cheque presented for collection in Noida, Uttar Pradesh.
The petitioner challenged a complaint filed by the respondent, which alleged the commission of offences under Section 138 of the Negotiable Instruments Act and Section 420 of the Ranbir Penal Code (RPC). According to the complaint, a cheque in the amount of Rs. 60 lakhs issued by the petitioner was returned unpaid with the endorsement "title of account required." This cheque had been presented through ICICI Bank Limited, where the respondent-maintained Account No. 003101041811.
The complainant also alleged that after dishonour of the cheque, a legal notice dated October 8, 2020, was duly served upon the petitioner. Despite receiving the notice, the petitioner failed to remit the amount, prompting initiation of the complaint.
The Judicial Magistrate 1st Class (Special Mobile Magistrate), Jammu, after considering the preliminary evidence, including a sworn affidavit and supporting documents, issued process against the petitioner and co-accused by order dated July 24, 2021.
The petitioner assailed the order primarily on two grounds:
- The Trial Magistrate lacked territorial jurisdiction since the cheque was presented at a Noida branch of ICICI Bank.
- The Magistrate erred in accepting an affidavit instead of recording the complainant’s statement on oath, as mandated by Section 200 of the Code of Criminal Procedure.
In response, the respondent argued that the proceedings had been ongoing for over two years, during which the petitioner had actively participated and even initiated settlement negotiations. The respondent further contended that the petitioner had paid a significant portion of the cheque amount during the trial.
The respondent, through his Senior Counsel, also submitted that under Section 145 of the Negotiable Instruments Act, it was permissible for a Magistrate to record evidence by affidavit.
The Court examinedwhether the Jammu court had jurisdiction under Section 142(2) of the Negotiable Instruments Act, which stipulates:
"The offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction, (a) if the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course maintains the account is situated."
The judgment recorded:
"It is pleaded therein that the complainant had presented the cheque in question for encashment through ICICI Bank Limited in account No. 003101041811. … it is clearly indicated that the respondent/complainant was maintaining his aforesaid account with ICICI Bank Limited, Sector 128, Gautam Budh Nagar, Noida, Uttar Pradesh."
Relying on the Supreme Court judgments in Bridgestone India Pvt. Ltd. v. Inderpal Singh (2016) 2 SCC 75 and Sendhuragro and Oil Industries v. Kotak Mahindra Bank Limited, 2025 LiveLaw SC 292, the Court reiterated:
"The court of the place where such cheque was presented for collection, will have the jurisdiction to entertain the complaint… The expression 'for collection through an account' is of significance."
Thus, the Court concluded:
"It is clear that the learned Trial Magistrate did not have territorial jurisdiction to entertain the complaint which is subject matter of the present petition."
On the question of whether participation in the proceedings amounted to acquiescence, the Court stated:
"A Court which lacks inherent jurisdiction to entertain a case cannot be vested with jurisdiction by consent of the parties."
The Court distinguished the authorities cited by the respondent, noting:
"In all these cases, the jurisdiction of the authorities was challenged after the authorities had already decided the matter against the party challenging the jurisdiction. In the present case, the proceedings before the learned Trial Magistrate are still at its inception."
Accordingly, the Court ordered:
"The petition is allowed and the impugned order passed by the learned Trial Magistrate on 24.07.2021 is set aside on the ground of lack of territorial jurisdiction."
Further, it directed:
"The learned Trial Magistrate shall return the complaint to the respondent/complainant along with original documents for its presentation before the competent Magistrate having jurisdiction."
It also clarified:
"It shall be open to the respondent/complainant to seek condonation of delay in filing the complaint before the Magistrate having jurisdiction."
Advocates Representing the Parties
For the Petitioner: Mr. Vishal Kapoor, Advocate
For the Respondent: Mr. Sunil Sethi, Senior Advocate with Mr. Navyug Sethi, Advocate
Case Title: Aditya Malhotra Prop. M/s ANN Infrastructure v. Dharminder Singh
Case Number: CRM(M) No. 967/2022
Bench: Justice Sanjay Dhar
[Read/Download order]
