Musaraf Hossain Khan vs Bhagheeratha Engg. Ltd. & Ors

The appellant herein filed a complaint petition in the court of Chief Judicial Magistrate, Birbhum at Suri being CC No. 339 of 2004 alleging inter alia therein that several cheques of diverse sums issued by the respondent herein had been dishonoured, and, thus, they committed an offence punishable under Section 138 of the Negotiable Instrument Act, 1881 (hereinafter referred to as 'the Act').

The appellant herein entered into a contract with the Respondent No. 1 herein (Company) for supply of stone chips. The company used to hand over post-dated cheques to the appellant towards the price of stone chips as also transport, handling, postage and other charges. The Company had issued six cheques of the following description in favour of the appellant:

Despite receipt of the summons instead of appearing before the Court of the Chief Judicial Magistrate, Birbhum at Suri, the respondents filed a writ petition in the High Court of Kerala at Ernakulam which was registered as W.P. (C) No. 2666 of 2005 praying, inter alia, for the following reliefs :

In Navinchandra N. Majithia (supra) a contract was entered into by and between a company, Indian Farmers Pvt. Ltd. (IFPL) and Chinar Exort Ltd. (CEL). The appellant therein was the Managing Director of the IFPL company. CEL entered into an agreement with IFPL for purchase of the entire shares of IFPL for which it paid earnest money. It, however, failed to fulfil its commitment to pay the balance purchase price within the specified time. The IFPL terminated the agreement. A suit was filed by CEL in the High Court of Bombay for specific performance of the said agreement. Two shareholders of CEL took over management and control of the company as Directors and they formed another company named JBHL at Shilong in the State of Meghalaya. Later the said suit was withdrawn upon the appellant's returning the amount paid by CEL which was earlier forfeited by the appellant. Pursuant to the said agreement JBHL made payments for the purchase of shares of IFPL. But the appellant therein contended that as JBHL committed default in making the balance payment and thereby committed breach of the agreement, the said agreement stood terminated and the earnest money stood forfeited as stipulated in the agreement. In the aforementioned situation a complaint was filed by the JBHL against the appellant at Shillong. The maintainability of the said complaint came to be questioned by Majithia by filing a writ petition before the Bombay High Court which was dismissed. Writ jurisdiction under Article 226 of the Constitution was invoked on the ground that the entire transaction on which the complaint was based had taken place at Mumbai and not at any other place outside the said town, much less at Shillong. It was further contended that the jurisdiction to investigate into the contents of the complaint was only with the police/courts in Mumbai. The prayers made in the said writ petition were:

We have referred to the scope of jurisdiction under Articles 226 and 227 of the Constitution only to highlight that the High Courts should not ordinarily interfere with an order taking cognizance passed by a competent court of law except in a proper case. Furthermore only such High Court within whose jurisdiction the order of subordinate court has been passed, would have the jurisdiction to entertain an application under Article 227 of the Constitution of India unless it is established that the earlier cause of action arose within the jurisdiction thereof.

For the reasons aforementioned, we are of the opinion that the Kerala High Court had no jurisdiction to entertain the writ petition as no part of cause of action arose within its jurisdiction.

For the foregoing reasons this appeal is allowed. The impugned Judgment and order is set aside. Interim orders passed by the High Court shall stand vacated. The respondent shall now appear before the court concerned.

In the facts and circumstances of the case, appellants are entitled to costs which is assessed at Rs. 10,000/-.