Dashrath Rupsingh Rathod vs State of Maharashtra - Case Analysis

Introduction of Dashrath Rupsingh Rathod vs State of Maharashtra

The case of Dashrath Rupsingh Rathod vs State of Maharashtra (2014) arose from eight Special Leave Petitions filed in the Supreme Court addressing the issue of dishonour of cheques issued across different jurisdictions. The appeal showed the discrepancy between where the cheques were issued and where the dishonour complaints were filed. The present case raised important questions about jurisdiction under Section 138 of the Negotiable Instruments Act, 1881.

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The present judgement arises from 8 Special Leave Petitions filed before the Supreme Court regarding dishonoured cheques issued to complainants in different jurisdictions. The primary issue in this case was the authority of courts to handle these complaints.

The appeals indicated that cheques were issued in one location while the dishonour complaints were filed in another jurisdiction. The facts are almost similar to these appeals primarily focusing on jurisdiction rather than the merits of the dishonoured cheques.

In the present appeal, the Supreme Court upheld the finding of the Bombay High Court that a complaint should not be rejected for being filed outside the jurisdiction where the cheque was presented but it should be moved to the appropriate Court. The Court in Crl. Appeal No. 1593 of 2014 allowed the appeal and directed the complainant to proceed according to the law after a Respondent-Accused issued dishonoured cheques for purchased electronic items.

The present case addresses an important question of law regarding jurisdiction that could affect future litigants and was referred to the Chief Justice of India for analysis.

The judgement referred to K. Bhaskaran vs Sankaran Vaidhyan Balan which stated the essential ingredients to establish the offence under Section 138 of the Negotiable Instruments Act which includes the drawing of the cheque, its presentation to the bank of the drawee, return of the unpaid cheque, issuance of notice to the drawer and failure of the drawer to pay within 15 days. The case of K. Bhaskaran vs Sankaran Vaidhyan Balan allowed complaints to be filed in jurisdictions other than where the bank of the drawee is located and broadened the scope to access to justice.

Issue addressed in Dashrath Rupsingh Rathod vs State of Maharashtra

The main question which was addressed in this case was regarding the question of jurisdiction of courts for an offence falling under the purview of Section 138 of the Negotiable Instruments Act?

Legal Provisions involved in Dashrath Rupsingh Rathod vs State of Maharashtra

Section 138 of the Negotiable Instruments Act, 1881

Section 138 of the Act states that where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless-

1. the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier
2. the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice; in writing, to the drawer of the cheque within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid
3. the drawer of such a cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Judgment and Impact of Dashrath Rupsingh Rathod vs State of Maharashtra

The Supreme Court in this case upheld the findings of a co-ordinate bench regarding the jurisdictional issues in dishonoured cheque cases. The Court highlighted that the conditions set out in Section 138 of the Negotiable Instruments Act which was also explained in the Bhaskaran case do not need to occur in the same location. These conditions can happen in different places and at different times but they are still essential to establish the offence.

The Court also referenced Section 178(d) of the Code of Civil Procedure, 1908 and also stated that each act constituting a single offence could occur in multiple locations allowing local courts to exercise jurisdiction. The Court also clarified that for a drawer to be held criminally liable the presentation of the cheque must occur within six months.

The Court lastly concluded that the principles established in the case of Bhaskaran were not applicable to the present situation especially when the cheque was presented in another jurisdiction. It clarified the six-month limitation period for the drawer to pay after receiving notice and stated that if this period expires without payment a new cause of action arises. Thus, the Court determined that complaints should be filed only in the jurisdiction of the bank of the drawee.

Conclusion

The Supreme Court upheld the findings of the Bombay High Court regarding jurisdictional matters in dishonoured cheque cases. The Court clarified that the necessary conditions for establishing an offence under Section 138 can occur in different locations and at different times. Thus, the Court ruled that complaints should be filed only in the jurisdiction of the bank of the drawee and reinforced the importance of proper jurisdiction in ensuring access to justice.