Bombay HC strikes down Kolkata magistrate’s order

The Nagpur bench of Bombay high court (HC) last week struck down an order of a judicial magistrate at Kolkata issuing process against two agriculturists from Gadchiroli district, observing that HC of one state would have jurisdiction over authority situated in another state if part of cause of action has arisen within the territorial limits of the HC.

The Nagpur bench of Bombay high court (HC) last week struck down an order of a judicial magistrate at Kolkata issuing process against two agriculturists from Gadchiroli district, observing that HC of one state would have jurisdiction over authority situated in another state if part of cause of action has arisen within the territorial limits of the HC.

Bombay high court. (HT FILE)

The division bench of justice Sunil Shukre and justice Avinash Gharote was hearing a petition filed by Bhajan Malkam and Patiram Hichami seeking to quash March 23, 2018 order of a metropolitan magistrate court, Kolkata issuing process against them for criminal breach of trust and cheating.

The order was passed on the basis of a complaint lodged by L&T Finance. The agriculturists had availed a vehicle loan from the firm, but did not repay it.

The finance company had questioned maintainability of the petition on the grounds that the metropolitan magistrate court was beyond the high court’s jurisdiction.

HC rejected the objection. The bench said part of the cause of action had arisen in Gadchiroli as the vehicle loan was disbursed to the petitioners in Gadchiroli and the vehicle was registered and used in Gadchiroli.

It also noted that the finance company had initiated arbitration proceedings for recovery of the vehicle loan before the arbitrator at Mumbai and an arbitration award was passed at Mumbai. All these facts and circumstances, the bench said, showed that major portion of the cause of action had taken place at Gadchiroli.

The bench struck down the order for prosecuting the petitioners on the grounds that prima facie the complaint against them did not disclose any offence.

Besides, the bench said, in the present case, arbitration award determining the liability of the petitioners as regards to repayment of loan and to seize and sell the hypothecated vehicle for recovery of the loan was passed much before filing of the complaint.

“Once civil dispute was determined by passing of the arbitration award, no criminal court on the basis of the same cause of action would have any jurisdiction to take cognisance of the so-called offences claimed to have been committed by the borrower,” HC concluded and struck down the magisterial order.