Supreme Court Comes To Rescue Of Party Who Filed Cheque Bounce Case In Wrong Court After Noting He Got Incorrect Legal Advice

In a notable case, the Supreme Court recently gave relief to a party whose complaint for cheque dishonour was dismissed by the Magistrate at the final hearing stage on the ground of lack of territorial jurisdiction.

The Supreme Court invoked its special powers under Article 142 of the Constitution to transfer the case to the appropriate Court, after noting that the party did not receive proper legal assistance.

In its order, the Supreme Court emphasised the primary procedural nature of the Code(CrPC) and highlighted that technical defects and irregularities should never stand in the way of the pursuit of substantial justice.

The case, initially filed before the Judicial Magistrate First Class(JMFC) in 2016 by Bijoy Shankar Mishra(appellant), pertained to dishonoured cheques totalling 45 lakhs. After 4 long years, when the trial reached the final argument stage, things took an unexpected turn when the court concluded that it lacked territorial jurisdiction and discharged the respondent(Sourav Ghosh) against whom the complaint was made under Section 138 of the Negotiable Instruments Act, 1881.

Interestingly, no opportunity was afforded to the appellant to address this jurisdictional issue before the High Court. Recognizing the glaring procedural oversight and the injustice faced by the appellant, the Supreme Court stepped in. In an extraordinary exercise of its Constitutional powers, the Court invoked Article 142 of the Constitution of India, combined with Section 406 of the Code.

It observed “We feel that the JMFC has passed the order without realizing the legal consequences as well as the fact that the trial had remained pending for more than four years and had proceeded without any objection to territorial jurisdiction, till the stage of final arguments. There was a lapse and proper legal guidance, which was not provided to the appellant. We feel that the appellant should not suffer on account of a lack of proper legal assistance. Procedural defect/lapse had a remedy, and was not substantial as to constitute lack of subject-matter jurisdiction.”

Drawing support from a recent judgment dated February 21, 2023, in Yogesh Upadhyay and Another v. Atlanta Limited, where the Court utilized its power to transfer cases and appeals under Section 406 of the Code, this judgment reaffirmed the principle that the Code is fundamentally procedural and should not hinder the pursuit of justice.

The Court set aside earlier orders, directing that the trial in the criminal complaint continue in the court of the JMFC, at Jamshedpur, Jharkhand.

The bench comprising Justices Sanjiv Khanna and Justice S.V.N Bhatti was hearing an appeal against a judgment of the Jharkhand High Court which had upheld the order of JMFC to dismiss a cheque bounce case.

The appellant had filed a criminal complaint on February 20, 2016, under Section 138 of the Negotiable Instruments Act, concerning dishonored cheques amounting to Rs. 45,20,000/- in the court of Chief Judicial Magistrate at Jamshedpur, Jharkhand. The court initially took cognizance of the matter and issued summons to the respondent on March 22, 2016. Subsequently, the prosecution evidence was recorded, and the statement of the respondent was recorded on January 15, 2018, under Section 313 of the Code of Criminal Procedure, 1973. Defense evidence was also presented in due course.

However, when the case reached the final arguments stage, the JMFC examining the records, concluded that the court did not have territorial jurisdiction as per Section 142(2)(a) of the Act. No opportunity was afforded to the appellant under Section 407 of the Code before the High Court. The court hastily passed an order on February 18, 2020, asserting that the cheques in question were presented in the account of the appellant at Adityapur, district Saraikela-Kharsawan. Consequently, only the courts in Saraikela-Kharsawan possessed territorial jurisdiction to adjudicate the case. The respondent was discharged, despite the case being a summons case.

Thereafter, the appellant filed a petition under Section 482 of the Code before the High Court, registered as Cr. M.P. No. 1266/2020. The petitioner relied upon Sections 460, 462, and 465 of the Code. However, the High Court, through its judgment and order dated December 7, 2021, dismissed the petition and upheld the decision of the JMFC, dated February 18, 2020.

Aggrieved by the decision, the appellant approached the Supreme Court. 

Advocate Rahul Shyam Bhandari appeared for the appellant.

Case title: Bijoy Shankar Mishra v. State of Jharkhand

Citation: 2023 LiveLaw (SC) 798

Click Here To Read/Download Order