2020 (12) TMI 1074 - HC - Indian Laws

Dishonor of cheque - Section 138 of Negotiable Instruments Act - case of petitioner is that the respondent and his brother cheated the petitioner to the tune of Rs. 7 lakhs and also misused the cheque issued by the petitioner herein and filed false case as against him with concocted stories - HELD THAT - The proceedings under his complaint is felt to be abuse of process of law and have to be quashed. In the case on hand when there is a specific bar for doing money lending business that too with his own client the act of the respondent is amount to professional misconduct. Therefore the entire proceedings initiated as against the petitioner is nothing but clear abuse of process of law and the complaint itself is liable to be quashed. In the judgment of the Hon ble Supreme Court of India in M/S BRIDGESTONE INDIA PVT. LTD. VERSUS INDERPAL SINGH 2015 (12) TMI 777 - SUPREME COURT held that the place where the cheque is delivered for collection i.e. the branch of the payee or holder in due course where the drawee maintains an account would be determinative of the place of territorial jurisdiction. Accordingly the respondent ought to have filed the complaint within the jurisdiction of Indian Bank High Court branch. Therefore on this ground also the complaint cannot be sustained as against the petitioner. Petition allowed.

Summary

Issues Involved:
1. Lack of Jurisdiction
2. Defective Statutory Notice
3. Professional Misconduct by Advocate
4. Fiduciary Relationship and Business Transactions
5. Territorial Jurisdiction for Filing Complaint

Detailed Analysis:

1. Lack of Jurisdiction:
The petitioner argued that the complaint was filed without jurisdiction, as the cheque was presented for collection at the Indian Bank, Madras High Court Branch, but the complaint was lodged before the Judicial Magistrate I, Chengalpattu. The court found merit in this argument, referencing the judgment in Bridgestone India Private Limited Vs. Inderpal Singh, which emphasizes that the place where the cheque is delivered for collection determines the territorial jurisdiction.

2. Defective Statutory Notice:
The petitioner contended that the statutory notice issued by the respondent did not comply with the procedures under Section 138 of the Negotiable Instruments Act. Specifically, the notice demanded repayment within seven days instead of the 15 days mandated by the Act. The court agreed, noting that the statutory notice did not fulfill the requirements of Section 138(c) of the Negotiable Instruments Act, which necessitates a 15-day period for repayment.

3. Professional Misconduct by Advocate:
The petitioner claimed that the respondent, being his advocate, misused their fiduciary relationship and engaged in professional misconduct by filing the complaint. The court referenced the Supreme Court judgment in B.Sunitha Vs. State of Telengana, which held that such actions by an advocate are against public policy and constitute professional misconduct. The court concluded that the respondent's actions amounted to an abuse of the process of law.

4. Fiduciary Relationship and Business Transactions:
The petitioner highlighted that the respondent, as his advocate, was barred from engaging in business or loan transactions with him under Rule 49(1) C of the Advocates Act. The court acknowledged this, citing the fiduciary nature of the lawyer-client relationship and the professional misconduct involved in such transactions. The court emphasized that the advocate's actions were contrary to the ethics of the legal profession.

5. Territorial Jurisdiction for Filing Complaint:
The court examined the territorial jurisdiction for filing the complaint, referencing the amended Section 142(2) of the Negotiable Instruments Act, which specifies that the place where the cheque is delivered for collection determines jurisdiction. The court concluded that the complaint should have been filed within the jurisdiction of the Indian Bank, High Court branch, thus invalidating the complaint filed in Chengalpattu.

Conclusion:
The court allowed the Criminal Original Petition, quashing the proceedings in C.C.No.670 of 2019 on the file of the learned Judicial Magistrate No.I, Chengalpattu. The connected miscellaneous petitions were also closed. The judgment emphasized the importance of adhering to statutory requirements and maintaining professional ethics in the legal profession.