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Rajasthan HC: Inquiry is Mandatory u/s 202 CrPC for Ruling Cognizance When Offender Resides Beyond Territorial Jurisdiction of Court

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Rajasthan high court Law Insider

Aastha Thakur

Published on: 06 September 2022 at 16:44 IST

Rajasthan HC held that where the accused resides outside the territorial jurisdiction of the Court, cognizance is seen to have unlawful mandates of law regarding the enquiry under Section 202 CrPC.

The sitting Judge Birendra Kumar was listening to the plea filed challenging the complaint petition as well as the order of cognizance passed in the aforesaid complaint case and the subsequent orders of summons and issuance of a warrant of arrest.

The petitioner and the respondent Company drew up a loan agreement for a credit facility in the nature of a working capital loan for a sum of Rs. 20 crores at Mumbai. At the time of execution, the petitioner provided certain documents, including post-dated cheques, with the stipulated certain dates in the agreement that those cheques may be realised by the lender of the due amount.

When the petitioner failed to pay back the amount of the loan, the respondent served the demand notice in response. After that, one of the post-dated cheques was deposited, which bounced because of insufficient funds.

The respondent sent the legal notice to the petitioner, and the petitioner, in his reply, denied the allegation. Against this, Respondent No. 2 took the matter to the Metropolitan Magistrate.

The petitioner contended that the amount of payment was due since the presentation of the first cheque and the complaint case for the same was registered in Mumbai. The representation of a second cheque for the realisation of the same amount was pointless and without legal authority.

In response, the respondents contend that since there was misunderstanding regarding the use of cheques served during the execution of the loan agreement, Cheques were to be used by the lender to obtain the due amount, and there is no statutory objection to their multiple use.

The issue for consideration here before the Court was:

Whether the petition filed by the petitioner challenging the complaint petition as well as the order of cognizance could be accepted or not?

The High Court determined that this petition is eligible to be granted on the grounds that the order of cognizance was improper in law because it failed to follow the requirements of Section 202 of the Criminal Procedure Code when the accused lived outside the court’s geographical jurisdiction.

The bench determined that the first check was for the whole amount owed, which had been realised. Under Section 138 of the Negotiable Instrument Act, the petitioner was already the subject of a criminal investigation for the dishonour of the aforementioned check. Given the situation, it was ill-advised to offer a second check for the realisation of the same sum and file a second complaint under Section 138 of the NI Act.

High Court opined that “the second presentation of a cheque for the realization of the same amount during the pendency of a criminal case under Section 138 of the NI Act for the bouncing of the first cheque issued for the realization of the same due amount is not permissible.”

“Likewise, the second complaint against the same drawer of the cheque was maintainable before the same court where the earlier complaint under Section 138 of NI Act was pending, therefore, the complaint before the Jaipur Court was without jurisdiction.”

“The learned Magistrate did not conduct the inquiry under Section 202 CrPC which was mandatory one in the facts and circumstances of the case as discussed above which vitiates the order of cognizance and issuance of summons as well.”

In view of the above, the bench allowed the petition.