The Delhi High court has said individuals who live outside the Capital and default on loans issued by investment firms in Delhi will have to face a trial in city courts.
Identifying a large-scale fraud, the court said defaulters cannot evade prosecution by citing territorial jurisdiction and make investment firms chase them in their respective cities.
Initiating criminal proceeding against three Chennai-based persons who had availed personal loans from Religare Finevest Limited, Justice S.N. Aggarwal said, "The transaction between the parties took place in Delhi. Jurisdiction of Delhi courts to entertain such complaints cannot be disputed."
Vijay Aggarwal, counsel for Religare, said, "It is a big racket designed to cheat banks and investment firms. They want the investment firms and banks to file cases in their local area according to their convenience." The court observed that all the documentation regarding loan was done in Delhi, and even cheques were handed over by the accused in Delhi. The court noted that the accused could not enjoy the liberty of facing a trial in their home-town.
Aggarwal filed a petition in high court seeking quashing of the magistrate's order on September 19, 2009, which refused to issue summons against the three, citing want of territorial jurisdiction. The court observed that both the payee bank and drawer bank are located in Delhi; therefore, the accused from any part of the country will have to face a trial in Delhi.
Sambath Kumar A, Ashwin R and Namitha Damani residents from different parts of Chennai had availed loan in 2008. The cheques of the accused were dishonoured. Religare served a legal notice to them on January 1, 2009. The high court ordered the trial court to issue summons against the three accused and ordered them to appear before the court.