| Case Name | Musafar Hossain Khan v. Bhagheeratha Engg Ltd. & Others |
| Citation | 2006 (2) KLT 525 (SC) |
| Date of Judgement | 24th February 2006 |
| Court | Supreme Court |
| Case No. | Appeal (civil) 1269 of 2006 |
| Petitioner | Musafar Hossain Khan |
| Respondent | Bhagheeratha Engg Ltd. & Others |
| Bench | Mr. Justice S.B.Sinha and Mr. Justice P.K.Balasubramanyam |
FACTS OF THE CASE:-
- Mr. Musafar Hossain Khan (petitioner) had entered into a contract with Bhagheeratha Engg Ltd. (respondent company) to supply stone chips. The company was liable to pay for the stone chips and also for transport, handling, postage & other charges.
- The total amount that the respondent needed to pay was Rs.35, 48,640. The company had issued six cheques which were deposited in “Mayurakhi Gramin Bank” Suri branch. Those cheques were returned by the bank stating that they were insufficient. Those cheques were outdated.
- On September 2004 the appellant send a demand notice to the respondent demanding the payment of the above mentioned amount.
- On 15th September 2004, the respondent paid Rs. 5, 33,795 out of Rs. 35, 48,640. Now the amount left to be paid was Rs.30, 14,845. The respondent assured that the payment will be done soon but they never did.
- The appellant filed a case in the court of Chief Judicial Magistrate at Suri. The court stated that the accused person is liable under section 138 of Negotiable Instrument Act. So summon was issued against the respondents to appear in the court but instead of appearing in the court the respondents filed a writ petition in Kerala High Court.
- Registered office of the company (respondent) in Kerala.
ISSUE:-
Did Kerala High Court have the jurisdiction of the matter?
Were the cheques given by the respondent valid?
CONTENTION OF PETITIONER:-
- The petitioner stated that having the office or sending the cheques from a certain place doesn’t form an integral part of cause of action. Hence the complaint was filed under section 138 of Negotiable Instrument Act and was taken to Chief Judicial Magistrate of Suri.
- The question of jurisdiction was interpreted through a case of Om Hemrajani v. State of UP & Anr. (2005), it states about section 188 CrPC it is for the offences committed outside India. So, if a person who is a victim comes to India and approach the Indian court for justice for a crime which was committed in abroad by an Indian then the convenience is relevant. But if a person who is hiding or running away from justice approach any court then the convenience won’t be relevant.
- So, in this case the agreement took place in the jurisdiction of Calcutta High Court. Even the supply and transportation took place in the state of West Bengal.
CONTENTION OF RESPONENT:-
- The company agreed to get into a contract with the petitioner. They stated that they have already paid Rs. 3 crores and the remaining amount was Rs. 35 Lakhs.
- The company also stated that they were not running away from making payments but they needed some time to augment its resources related to mention before.
- The company gave the reason for bouncing of the cheques that the company was not informed by the petitioner before depositing those in the bank.
- On the question of Jurisdiction the respondent stated that all the cheques have been issued from the registered office of the company so that is the place of action been rose.
JUDGEMENT:-
After going through the issues of the case it was clear that the Kerala High Court had no jurisdiction because ‘cause of action’ took place in West Bengal. The agreement and the supply of chirp stones took place within the jurisdiction of West Bengal. Even if the statement give by the respondent in the writ petition is entirely correct still Kerala won’t have the jurisdiction.
Then the objective of section 138 of the Negotiable Instrument Act is to make sure proper and smooth transactions take place in business. But due to lack of honesty and indignity many business outside India suffered and had setbacks. So it was decided that the interim order passed by the Kerala High Court invalid and the respondents need to appear before the said court.
CONCLUSION:-
Now after the judgement it was clear that this case focused on the cause of action to decide the jurisdiction of courts. On the matter of the outdated cheques it was the responsibility of the company to make sure smooth and proper transaction takes place between the parties because of the agreement was made on honesty and integrity. The petitioner was successful in proving all the necessary facts this helped the court to make the right decision.
written by Amrita Priyadarshini intern under legal vidhiya
