Legislation UpdatesStatutes/Bills/Ordinances

The Government on May 3 published an Ordinance in the Gazette of India which made major changes to the Commercial Court structure in India. These courts were set up below the District Judge level, keeping in mind the increasing number of commercial disputes with a growing economy, and to bring about a speedy resolution of conflict, to showcase India as a lucrative destination for foreign investment. This ordinance sought to amend the Commercial Courts, Commercial Division and the Commercial Appellate Division in High Courts Act of 2015 (the Act).

The amendment made the following important changes to the Act:

1. Addition of the phrase “Commercial Appellate Courts” to the long title of the Act, and prescribing “Commercial Courts Act, 2015” as the short title.

2. In S. 2(i) of the Act, ‘specified value’ was lowered from amounts exceeding One crore rupees to amounts exceeding Three lakh rupees, substantially increasing the ambit of the courts’ jurisdiction.

3. In the High Courts of Bombay, Delhi, Calcutta, Madras and Himachal Pradesh, which exercise ordinary original civil jurisdiction in respect of territories of the cities of Mumbai, Delhi, Kolkata, Chennai and the State of Himachal Pradesh, the State government, in consultation with the respective High Court, shall constitute Commercial Courts at District Judge Level, and also specify the pecuniary value for these courts, which shall be greater than 3 lakhs but less than the pecuniary value of the jurisdiction of the District Court.

4. Where the High Courts do not exercise ordinary original civil jurisdiction, the State government may, in consultation with the respective High Court, establish Commercial Appellate Courts at the District Judge level, to hear appeals against judgments passed by the Commercial Courts below the District Judge level.

5. Insertion of Chapter IIIA to the Act which mandates, in suits not contemplating any urgent interim relief, pre-institution mediation, the manner and procedure of which is to be prescribed by the Central Government. Such a suit shall not be instituted till the remedy of mediation has been exhausted.

Ministry of Law and Justice

Case BriefsHigh Courts

Allahabad High Court: A Single Judge Bench comprising of Amit Sthalekar, J. ordered the petitioner (wife of a retired government servant) to vacate the government quarter occupied by her unathorisedly even after retirement of her husband who was a government servant.

The petitioner was unauthorisedly occupying the government quarter in question which was allotted to her husband when he was in government service. The husband of the petitioner had retired from government service twelve years ago but still the petitioner continued to occupy the quarters. Learned counsel for the petitioner submitted that the respondents be restrained from compelling the petitioner from vacating the said quarters in view of the order of the State Women Commission.

The High Court was of the opinion that the submission of the counsel for the petitioner was misconceived. The Court held that the State Women Commission had absolutely no jurisdiction to interfere in the service matters of an employee which are governed by statutory rules. Petitioner’s husband had retired from service twelve years ago; the petitioner continued to occupy the said quarters in wholly illegal and unauthorized manner. Accordingly, the petitioner was ordered to vacate the government quarter within fifteen days. [Asha Rai v. Purvanchal Vidyut Vitran BLW, 2018 SCC OnLine All 435, dated 20-04-2018]

 

Case BriefsSupreme Court

Supreme Court: Deciding the question as to whether the order passed by the City Civil Court in exercise of power under Section 9 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, as an Appellate Officer, is in the capacity of a Civil Court or persona designate, the 3-judge bench of Dipak Misra, CJ and Amitava Roy and AM Khanwilkar, JJ held:

“the Appellate Officer while exercising power under Section 9 of the 1971 Act, does not act as a persona designata but in his capacity as a pre-existing judicial authority in the district (being a District Judge or judicial officer possessing essential qualification designated by the District Judge).”

It was said that being part of the district judiciary, the judge acts as a Court and the order passed by him will be an order of the Subordinate Court against which remedy under Article 227 of the Constitution of India can be availed on the matters delineated for exercise of such jurisdiction.

Explaining the provision under Section 9 f the Act, the Court said:

“when the Appellate Officer is either the District Judge of the district or any another judicial officer in that district possessing necessary qualification, who could be designated by the District Judge, the question of such investiture of power of an appellate authority in the District Judge or Designated Judge would, by no standards, acquire the colour or for that matter trappings of persona designate.

Explaining further, the Court said that the District Judge or Principal Judge exercises judicial power of the State and is an authority having its own hierarchy of superior and inferior Courts, the law of procedure according to which it would dispose of matters coming before it depending on its nature and jurisdiction exercised by it, acting in judicial manner. Hence, the District Judge/Principal Judge of the City Civil Court and other judicial officers of these Courts possessing necessary qualifications constitute a class and cannot be considered as persona designata. The Appellate Officer, therefore, has to function as a Court and his decision is final in terms of Section 10 of 1971 Act. The Bench said:

“The legislative intent behind providing an appeal under Section 9 before the Appellate Officer to be the District Judge of the concerned District  Court in which the public premises are situated or such other judicial officer in that district possessing necessary qualification to be designated by the District Judge for that purpose, is indicative of the fact that the power to be exercised by the Appellate Officer is not in his capacity as persona designata but as a judicial officer of the pre-existing Court.”

[Life Insurance Corporation of India v. Nandini J. Shah, 2018 SCC OnLine SC 142, decided on 20.02.2018]

Case BriefsSupreme Court

Supreme Court: The bench of J. Chelameswar and SK Kaul, JJ held that the enforcement of an award through its execution can be filed anywhere in the country where such decree can be executed and there is no requirement for obtaining a transfer of the decree from the Court, which would have jurisdiction over the arbitral proceedings.

Different High Courts had given different opinion on the question as to whether an award under the Arbitration & Conciliation Act, 1996 is required to be first filed in the court having jurisdiction over the arbitration proceedings for execution and then to obtain transfer of the decree or whether the award can be straightway filed and executed in the Court where the assets are located is required to be settled in the present appeal.

Delhi High Court, Kerala High Court, Madras High Court, Rajasthan High Court, Allahabad High Court, Punjab & Haryana High Court and Karnataka High Court were of the opinion:

“An award is to be enforced in accordance with the provisions of the said Code in the same manner as if it were a decree of the Court as per Section 36 of the said Act does not imply that the award is a decree of a particular court and it is only a fiction. Thus, the award can be filed for execution before the court where the assets of the judgment debtor are located.”

However, the Madhya Pradesh and Himachal Pradesh High Courts held:

“The transfer of decree should first be obtained before filing the execution petition before the Court where the assets are located.”

After discussing various provisions of the Act and the various orders of the High Courts at length, the Bench said:

“An award under Section 36 of the said Act, is equated to a decree of the Court for the purposes of execution and only for that purpose. Thus, it was rightly observed that while an award passed by the arbitral tribunal is deemed to be a decree under Section 36 of the said Act, there was no deeming fiction anywhere to hold that the Court within whose jurisdiction the arbitral award was passed should be taken to be the Court, which passed the decree. The said Act actually transcends all territorial barriers.”

It was, hence, held that the view taken by the Madhya Pradesh High Court and the Himachal Pradesh High Court is held to be not good in law while the views of Delhi High Court, Kerala High Court, Madras High Court, Rajasthan High Court, Allahabad High Court, Punjab & Haryana High Court and Karnataka High Court reflect the correct legal position. [Sundaram Finance Limited v. Abdul Samad, 2018 SCC OnLine SC 121, decided on 15.02.2018]

Case BriefsHigh Courts

Calcutta High Court: A civil petition was decided by a Single Judge Bench comprising of Sanjib Banerjee, J., wherein the orders of the lower appellate court and the trial court insofar as they refused to grant injunction in respect of Schedule C properties to the plaint, were set aside.

The petitioner-plaintiffs filed a suit regarding a property matter wherein injunction was granted in respect of properties covered under Schedule A and B, but was refused in respect of Schedule C properties on the only ground that such property was situated beyond the territorial limits of the trial court. Aggrieved thereby, the plaintiffs filed the instant petition.

The High Court perused the record and discussed law on the subject. The Court was of the view that it was inconceivable that only because a property was not situated within the jurisdiction of a particular court, the court refused to grant an injunction in respect thereof. With help of an example, the Court discussed Section 17 CPC which envisages a suit being instituted in one of the several courts within whose jurisdiction the properties may be situated. It is possible that “A” and “B” have disputes pertaining to six properties and all the six properties are not situated within the jurisdiction of any one particular court. If the cause of action is such that several suits need not be instituted, by virtue of Section 17 the plaintiff may invoke the jurisdiction of any one court within whose jurisdiction any of the properties may be situated; but that would not preclude that court from issuing an injunction in respect of properties situated beyond its jurisdiction.

Since the order of refusal to grant injunction was made only on the above mentioned ground without going into merits; the Court held that the orders of the lower appellate court and the trial court, insofar as they refused to grant injunction in respect of Schedule C properties to the plaint, were liable to be set aside which was ordered accordingly. [Reba Rani Bal V. Malay Krishna Bal, 2018 SCC OnLine Cal 143, order dated 05-02-2008]

 

Case BriefsHigh Courts

Delhi High Court: A Single Judge Bench of the Delhi High Court returned a plaint on grounds of want of jurisdiction and vagueness of cause of action raised in an IA before it. The original suit was filed by the plaintiff, seeking a decree of permanent injunction restraining passing off and to claim damages against all defendants.

The plaintiff is a media house which operates a Hindi news channel by the name of ‘News Nation’ which is circulated across the country by way of cable streaming, DTH and online streaming. Plaintiff claimed considerable goodwill associated with the trade name. However, the trade name was pending before the Registrar of Trademarks, Delhi and hence, was not trademarked. The plaintiff claimed that Defendants 2 and 3 established a media house and started publishing a newspaper titled ‘News Nation Gujarat’ and that they also run a website with the domain name www.newsnationgujarat.com along with an interactive Facebook page titled “news nation Gujarat”. The plaintiff claimed that since the newspaper is also circulated through the internet and is hence, available to users in Delhi, the Court has jurisdiction to try the suit. Another grounds the plaintiff took was that it had received queries relating to the defendant media house from M/s Prime Time Communications, based in Delhi, expressing it’s intention to advertise in the said newspaper.

The Court held that merely hosting a web page on Facebook is not sufficient to confer jurisdiction on a court where the defendant does not carry out business. The Court also found that in a passing off action, the plaintiff has to plead and establish there has been a commercial transaction within the jurisdiction of the Court, which the plaintiff has failed to do. Resultantly, the Court, after being satisfied that it does not have jurisdiction to entertain the suit, returned it. [News Nation Networks Private Limited v. News Nation Gujarat, 2017 SCC OnLine Del 12698, decided on 22.12.2017]

Case BriefsHigh Courts

High Court of Madhya Pradesh, Jabalpur: Recently, a petition under Article 227 of the Constitution was filed before the High Court against the order of the court below to reject an application filed by petitioners under S. 45 of the Evidence Act. On going through the facts of the case, the proceedings till now and contentions of counsel from both the sides, the Court concluded that the sole question in the present case is that despite delay whether S. 45 application can be entertained or not.

The Court referred to L.S.Trading Co. v. Manish Mishra2010 SCC OnLine MP 213 : (2010) 4 MP LJ 228 in which it has been observed that the application under S. 45, Evidence Act cannot be rejected only on the ground of delay. The Court further on relating the reference to the facts of the present case observed that the delay alone is not the ground in this case for reject the application of the petitioner and conduct of the petitioner had also played a significant role for the same as the petitioners had themselves rejected a similar application earlier filed by the opposite party.

Further, the Court highlighted the point of law relating to its jurisdiction as to that the interference under Article 227 of the Constitution can be made if order is passed by the court without authority of law or it suffers from any manifest procedural impropriety or palpable perversity. It further held that interference cannot be made mere on a drop of hat and reiterated the stance of the Apex Court in various judgments that mere error of fact or law alone is not sufficient for interference. The Bench of Sujoy Paul, J. finally dismissed the petition stating that it would not act as a bull in a China shop. [Narendra Singh v. Gurmel Kaur,  2017 SCC OnLine MP 1358, decided on 07.11.2017]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission: The grievance of the petitioner in a recent case before the Commission was that appellants/complainants had entered into agreements with the respondents for purchase of residential flats, which the respondents were to construct and despite paying the substantial amount to the respondents, the construction of the flats had not been completed. The State Commission dismissed the complaints and ruled in favor of respondents against which the appellants approached the National Commission.

To decide on the issue, the Commission examined and explained the relevance of Section 3 of the Consumer Protection Act which provides that the provisions of the Act shall be in addition and not in derogation of the provisions of any other law for the time being in force. Therefore, the remedy under the Act is an additional remedy available to the consumer. The Commission presided by V.K. Jain, J. observed that in the instant case, respondents had entered into agreements with the complainants/appellants, agreeing to construct flats for them and give possession of the said flats and therefore they have a relationship of consumer and service provider and this relationship would not come to an end with just one party canceling the agreement.

The Commission further said that if there is deficiency on the part of the respondents in rendering services to consumers and the same is proved, the complainants/appellants would be entitled to appropriate relief in terms of the provisions of the Consumer Protection Act. In this case, remedy was initiated before the civil court by respondents and not the complainants and therefore, the jurisdiction of civil court is not at all ousted.  [Yashwant Rama Jadhav v. Shaukat Hussain Shaikh, First Appeal No. 1229 of 2017, decided on 18.11.2017]

Case BriefsHigh Courts

High Court of Himachal Pradesh: A Single Judge Bench of Tarlok Singh Chauhan, J. dismissed a Regular Second Appeal holding that in the instant case, jurisdiction of the Civil Courts was ousted by Section 171 of the Himachal Pradesh Land Revenue Act, 1954; and there was no substantial question of law that arose to be considered by the High Court.
The appellants questioned the partition proceedings right up till the Court of the Financial Commissioner; and thereafter filed a suit for declaration, permanent prohibitory and mandatory injunction before the trial court. One of the issues framed by the learned trial court was with regard to the jurisdiction of the civil court to entertain such kind of a suit, particularly in view of the bar as imposed by Section 171 of the aforementioned Act. The learned trial court held that it had no jurisdiction, particularly when the appellants had failed to prove the violation of any provisions of the Act or even violation of the principles of natural justice. Appellants filed an appeal before the learned first appellate court, which too, came to be dismissed. The appellants then filed the instant appeal, again questioning therein the impugned orders.
The High Court perused Section 171 of the Act and decisions of the Supreme Court and observed that the statute ousting the jurisdiction of the civil court is required to be strictly construed. It was also noticed that the appellants had not sought declaration of the title rather they had filed the suit with the allegation that the partition was not properly effected as they were not allotted any land by the road side. This obviously was a matter which lay entirely within the purview of the revenue authorities under the Act. The findings recorded by the learned courts below were based on the correct appreciation of the pleadings and evidence and were pure findings of fact which were immune from challenge in a second appeal. No question of law much less substantial question of law arose for consideration in the instant appeal. Accordingly, the appeal was dismissed. [Ajudhia Devi v. Dhian Singh, 2017 SCC OnLine HP 1522, order dated 4.10.2017]

Case BriefsSupreme Court

Supreme Court: In the case where it was argued that for offences allegedly committed under Section 26(2) of the Securities and Exchange Board of India Act, 1992 before 29.10.2002 (whether or not, taken up for trial before 29.10.2002) the trial was to be conducted by the concerned Metropolitan Magistrate (or, a Judicial Magistrate of the first class), and none other in light of the 2002  amendment, the bench of JS Khehar, CJ and Arun Mishra, J held that Section 26, as amended through ‘the 2002 Amendment Act’, leaves no room for any doubt, that the erstwhile ‘forum’ would cease to be the adjudicatory authority and the newly created ‘forum’ – the Court of Session, would deal with all pending matters as well.

The Court said that the ‘forum’ for trial earlier vested in the Court of Metropolitan Magistrate (-or, Judicial Magistrate of the first class) was retrospectively amended, inasmuch as, the ‘forum’ of trial after ‘the 2002 Amendment Act’ was retrospectively changed to the Court and hence, the trials even in respect of offences allegedly committed before 29.10.2002, whether in respect whereof trial had or had not been initiated, would stand jurisdictionally vested in a Court of Session. It was held that the court having jurisdiction earlier, being a court inferior to a Court of Session ceased to have the jurisdiction to adjudicate matters punishable under ‘the SEBI Act’, after the amendment under ‘the 2002 Amendment Act’ came into force.

Rejecting the contention that the action of transfer of pending matters from the Court of Metropolitan Magistrate (or, Judicial Magistrate of the first class), to the Court of Session (consequent upon ‘the 2002 Amendment Act’) and thereafter, to the Special Court (consequent upon ‘the 2014 Amendment Act’), was liable to be treated as prospective, failing which the accused will be deprived of the important right of revision vested in him, the Court said that when the remedy of revision is considered as not a right of an accused, at all, the absence of the remedy of revision cannot be considered as deprivation of a right. [SEBI v. Classic Credit Ltd., 2017 SCC OnLine SC 961, decided on 21.08.2017]

Experts CornerROYZZ & CO.

Supreme Court: The Court has ruled that administrative circulars issued by the Securities and Exchange Board of India (SEBI) cannot be challenged before the Securities and Appellate Tribunal (SAT).

The Supreme Court passed this judgment when it was hearing an appeal filed by SEBI against a SAT order in a case relating to National Securities Depository Ltd. (NSDL).

Background

NDSL and SEBI were at odds over an administrative circular captioned ‘review of dematerialization charges’ issued in 2005, debarring the depository from levying fees/charges on rendering service to the investors who hold Demat accounts with the depository.  The grievance of the appellant (NDSL) was that it is a company and the law permits it to make profits and distribute the dividend to its shareholders. SEBI, without any justification, interfered with its functioning, NSDL had argued.

SAT in September 2006 had ruled that the term “order” in SEBI Act is extremely wide, and can be applied in all three types of orders— administrative orders, legislative orders, and quasi-judicial orders. Thus, it ruled in favour of NSDL.

Verdict

SEBI challenged SAT’s verdict in the Supreme Court and secured a reversal. The Supreme Court, in the order passed on March 7, said that only “quasi-judicial” orders and decisions are a “subject of SAT”.

“Administrative orders such as circulars issued under the SEBI Act are obviously outside the appellate jurisdiction of the tribunal,” said the SC order.

Conclusion

The clarification and restriction to the scope of SAT will clearly bring down the number of cases before the Tribunal. One cannot approach SAT cause the same will now have jurisdiction only over orders passed by SEBI in a quasi-judicial capacity. [National Securities Depository Ltd. v. SEBI, 2017 SCC OnLine SC 256, decided on 07.03.2017]

Case BriefsSupreme Court

Supreme Court: Deciding the question as to the scope of power of Armed Forces Tribunal to hear the appeals arising out of court martial verdicts qua GREF personnel, the Court held that denial of jurisdiction to the said tribunal would be contrary to the Army Act, 1950 and the provisions engrafted under the Armed Forces Tribunals Act, 2007. It was held that the right to approach the AFT by the personnel of GREF who are tried by a court martial held under the very same Act has to be recognized. It was, however, clarified, that at the same time if the punishment is imposed on GREF personnel by way of departmental proceedings held under the CCS(CCA) Rules, 1965 the same cannot be agitated before the AFT and AFT shall have no jurisdiction to hear and decide grievances of GREF personnel relating to their terms and conditions of service or alternatively put ‘service matters’.

The bench of Dipak Misra and U.U. Lalit, JJ explained that the 2007 Act has been made applicable to persons subject to the Army Act, 1950, the Navy Act, 1957 and the Air Force Act, 1950, the retired personnel subject to these Acts including their dependants, heirs and successors insofar as it relates to their service matters. The tribunal constituted in terms of Sections 4 and 5 thereof, is vested with twin jurisdiction viz., jurisdiction, powers and authority in service matters as provided in Section 14 and the jurisdiction in matter of appeal against courts martial under Section 15 of the Act.

It was further stated that the 1950 Act and the Army Rules, 1954 have been applied to civilian personnel of the GREF only for the purpose of discipline. The reasons are obvious. The GREF is a force raised and maintained under the authority of the Central Government, its units are set up on the lines of the Indian Army, it works with and under close coordination with regular army in border areas, facilitates the Indian Army to carry out its operational role, etc. Hence, it has been felt appropriate that the 1950 Act should be made applicable to a force raised and maintained by the Central Government as considered necessary in the interest of discipline. The issue can be perceived from a different perspective. The GREF personnel are subjected by legislative scheme to dual disciplinary control, and such an arrangement is permissible

Hence, if an offence is committed in relation to an enemy, offences on active service, mutiny, desertion, disobedience, etc., considering the nature and gravity of the offence, it may warrant severe action against the delinquent by way of trial by a court martial. In other disciplinary cases, the competent authority may decide to proceed under CCS(CCA) Rules, 1965 in which the maximum permissible punishment is only ‘dismissal from service’. [Mohammed Ansari v. Union of India, 2017 SCC OnLine SC 83, decided on 02.02.2017]

 

Case BriefsSupreme Court

Supreme Court: Dealing with the question as to whether the Civil Court would cease to have jurisdiction to try the suit of eviction if the suit property came under notified area during pendency of the suit, the Court held that as on the date of the institution of the suit legal right in favour of the landlord had already accrued and it stood crystallised under the law applicable to the building at that time, if during the pendency of the suit, Rent Act becomes applicable to the premises in question, that would be of no consequence and it would not take away the jurisdiction of civil court to dispose of a suit validly instituted.

Referring to various rulings of this Court, the Bench of Dr. A.K. Sikri and N.V. Ramana, JJ said that in order to oust the jurisdiction of civil court, there must be a specific provision in the Act taking away the jurisdiction of the civil court in respect of those cases also which were validly instituted before the date when protection of Rent Act became available in respect of the said area/premises/tenancy. Further In case aforesaid position is not accepted and the protection of the Rent Act is extended even in respect of suit validly instituted prior in point of time when there was no such protection under the Act, it will have the consequence of making the decree, that is obtained prior to the Rent Act becoming applicable to the said area/premises, inexecutable after the application of these Rent Act in respect of such premises. This would not be in consonance with the legislative intent.

In the present case the premises in-question was initially outside the ambit of rent legislation, however, during the pendency of the suit and before it could be finally decided, the area in question was brought within the sweep of rent legislations by requisite notifications. The effect of such coverage was to give protective umbrella to the tenants. As a fortiorari, the landlord can now evict the tenant only by taking recourse to the rent legislation that too, by filing the petition for eviction under the Rent Act before the Rent Controller/Tribunal constituted under the said Acts. [Rajender Bansal v. Bhuru, 2016 SCC OnLine SC 1151, decided on 18.10.2016]

Case BriefsSupreme Court

Supreme Court: In the matter where the accused persons has sought for recall of the witnesses under Section 311 read with Section 231(2) CrPC on the ground of illness of the counsel, the Bench of Dipak Misra and U.U. Lalit, JJ held that recalling of witnesses as envisaged under the said statutory provision on the grounds that accused persons are in custody, the prosecution was allowed to recall some of its witnesses earlier, the counsel was ill and magnanimity commands fairness should be shown, are not acceptable in the obtaining factual matrix. considering the fact that a number of counsels were engaged by the defence, the Court held that in such a situation recalling of witnesses indubitably cannot form the foundation. If it is accepted as a ground, there would be possibility of a retrial. There may be an occasion when such a ground may weigh with the court, but definitely the instant case does not arouse the judicial conscience within the established norms of Section 311 CrPC for exercise of such jurisdiction.

Referring to a series of decisions where it was held that a liberal approach needs to be followed while allowing the recall of witnessed, the Court said that the decisions which have used the words that the court should be magnanimous, needless to give special emphasis, did not mean to convey individual generosity or magnanimity which is founded on any kind of fanciful notion. It has to be applied on the basis of judicially established and accepted principles. The approach may be liberal but that does not necessarily mean “the liberal approach” shall be the rule and all other parameters shall become exceptions. Recall of some witnesses by the prosecution at one point of time, can never be ground to entertain a petition by the defence though no acceptable ground is made out. It is not an arithmetical distribution. This kind of reasoning can be dangerous.

The Court further said that a criminal trial does not singularly centres around the accused. In it there is involvement of the prosecution, the victim and the victim represents the collective. The cry of the collective may not be uttered in decibels which is physically audible in the court premises, but the Court has to remain sensitive to such silent cries and the agonies, for the society seeks justice. Therefore, a balance has to be struck.

In the case at hand, the prosecution had examined all the witnesses. The statements of all the accused persons, i.e. 148 in number, had been recorded under Section 313 CrPC and the defence had examined 15 witnesses. Taking note of these facts, the Court said that the foundation for recall, as is evincible from the applications filed, does not even remotely make out a case that such recalling is necessary for just decision of the case or to arrive at the truth. [State of Haryana v. Ram Mehar2016 SCC OnLine SC 857, decided on 24.08.2016]

Supreme Court

Supreme Court: Calling in question the decision of 2-judge bench in K. Bhaskaran v. Sankaran Vaidhyan Balan,  (1999) 7 SCC 510, famously known as the Bhaskaran Case on the issue of Territorial Jurisdiction of trial for the Complaint made for dishonor of cheque, the 3-judge bench of T.S. Thakur, Vikramjit Sen and C. Nagappan, JJ held that the liberal approach preferred in Bhaskaran case calls for a stricter interpretation of Section 138 of the Negotiable Instruments Act, 1881 (NIA) precisely because of its misemployment so far as choice of place of suing is concerned. The Court, Bhaskaran Case, had held that the jurisdiction to try an offence under Section 138 NIA could not be determined only by reference to the place where the cheque was dishonoured as the dishonour of the cheque was not by itself an offence under Section 138 NIA and that the offence was completed only when the drawer failed to pay the cheque amount within the period of fifteen days stipulated under clause (c) of the proviso to Section 138 of the Act and held that any court within whose jurisdiction any of the above acts were committed had jurisdiction.

Accepting the judgment of 2-judge bench in Harman Electronics Pvt. Ltd. v. National Panasonic India Pvt. Ltd. (2009) 1 SCC 720(Harman), where it was held that what would constitute an offence is stated in the main provision of Section 138 NIA and the proviso appended thereto, imposes certain further conditions which are required to be fulfilled before cognizance of the offence can be taken, the Court held that in criminal jurisprudence there is a discernibly demarcated difference between the commission of an offence and its cognizance leading to prosecution. It was held that the Harman approach is significant and sounds a discordant note to the Bhaskaran ratio.

In the present case in which Anagha Desai and CS Ashri represented the appellant and respondents, respectively, considering the various judgments of the Supreme Court, the Court overruled the Bhaskaran Ratio and, considering that Section 177 CrPC applies to Section 138 NIA, held that prosecution can be launched only before the Court within whose jurisdiction the dishonour takes place except in situations where such offence is committed along with other offences in a single transaction within the meaning of Section 220(1); read with Section 184 CrPC or is covered by the provisions of Section 182(1); read with Sections 184 and 220 CrPC thereof. Dashrath Rupsingh Rathod v. State of Maharashtra, Criminal Appeal No. 2287 of 2009, decided on 01.08.2014

To read the full judgment, refer to SCCOnLine

Case BriefsHigh Courts

Andhra Pradesh High Court- Deciding a case disputing the jurisdiction of the A.P. State Wakf Tribunal (Tribunal) in relation to the unregistered Wakfs, the Court held that Section 2 of the A.P. Wakf Act, 1995 applies to all the Wakfs in India irrespective of their registration. Stating that a Masjid or Mosque is a place of worship of God and it is not capable of human ownership or possession, the Court held that a Masjid or Mosque is a Wakf whether it is or not registered as defined in the Wakf Act, 1955 and the Tribunal has jurisdiction to try cases related to unregistered Wakfs also. S. Manikya Reddy v. A.P. State Wakf Board, Writ Petition No. 29937 of 2013, decided on 28-04-2014

To read the full judgment, click here