Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CRL. M.C. NO.4054/2012 & CRL.M.A. NO.19281/2012
rd
Reserved on: 23 January, 2014
% Date of Decision: 4th February, 2014
M/S ROYAL PALACE IN HOTEL ..... Petitioner
Through: Mr. Sarvesh Bisaria & Mr. Prakash
Chand Sharma, Adv.
Versus
GOVT OF NCT OF DELHI & ANR. ..... Respondents
Through: Mr.Karan Singh, APP for the State.
CORAM:
HON'BLE MR. JUSTICE VED PRAKASH VAISH
JUDGMENT
1. By way of the present petition under Section 482 of the Code of
Criminal Procedure, 1973 ( for short `Cr.P.C.‟) the petitioner seeks
quashing of complaint case No.2506/1/10 titled as M/s Ali Trading
Exposition vs. M/s Royal Place in Hotel.
2. Briefly stating the facts of the case are that respondent No.2
herein filed a complaint for the offence under Section 138 of the
Negotiable Instruments Act, 1881 (for short `the Act‟) against the
petitioner on the allegations, inter alia, that in the month of November,
2008 the petitioner herein approached the respondent/complainant for
purchase of LPG heaters. The petitioner after being satisfied with the
product, quality and price placed an order of LPG heaters being 167 in
Crl.M.C. No.4054/2012 Page 1 of 10
number for a total price of Rs.11,25,000/- (Rupees eleven lakhs and
twenty five thousand). The petitioner issued two posted dated cheques
bearing No.14681031 dated 17.12.2008 for Rs.5.00 lakhs (Rupees five
lakhs) and the other bearing No.14681032 dated 27.12.2008 for
Rs.6,25,000/- (Rupees six lakhs and twenty five thousand) both drawn
on The Jammu & Kashmir Bank Limited towards the price of the
heaters. In the month of December, 2008, the petitioner approached
respondent No.2 and requested not to present the said cheques on
accounts of financial difficulties and requested to present the same
only after confirmation. However, despite repeated follow up, the
petitioner had been avoiding payment on one pretext or the other. The
respondent No.2 presented the said two cheques which were
dishonoured due to „insufficient funds‟ on 4.4.2009. Respondent No.2
sent a legal notice dated 30.4.2009 by registered A.D. post which was
replied by the petitioner by reply dated 15.5.2009. Despite service of
notice, the petitioner failed to make the payment of cheques within
stipulated period. With respect to jurisdiction of the courts at Delhi, it
was pleaded that the complainant‟s bank is at Delhi and intimation of
dishonour of cheques has been received at Delhi. Thus, the offence
has been committed at Delhi within the territorial jurisdiction of Delhi.
3. Taking cognizance of the complaint, learned Metropolitan
Magistrate, New Delhi summoned the petitioner to face trial for an
offence under Section 138 of the Act on 18.12.2009. Vide order dated
23.4.2012, the process under Section 82 Cr.P.C. was issued against the
petitioner.
4. Failing aggrieved by the said orders, the petitioner has preferred
present petition, inter alia, stating that the courts at Delhi have no
Crl.M.C. No.4054/2012 Page 2 of 10
jurisdiction to take cognizance of the complaint, there is no cause of
action against the petitioner. According to the petitioner, the entire
transaction took place at Srinagar. The drawee bank of the petitioner is
also at Srinagar and courts at Delhi have no jurisdiction to entertain
and try the complaint.
5. At the outset, it may be mentioned that the petitioner filed a
Criminal Revision petition bearing No.13/2013 against order dated
4.2.2013 whereby process under Section 82 Cr.P.C was issued, which
was dismissed by learned Additional Sessions Judge, Saket Courts,
Delhi, vide order dated 4.3.2013.
6. Short question involved in the present petition is regarding
territorial jurisdiction of the courts at Delhi to entertain and try the
complaint under Section 138 of the Negotiable Instruments Act.
7. The issue regarding territorial jurisdiction is to be considered
with reference to Section 138 of the Act and the applicable provisions
of Cr.P.C. i.e. Sections 177, 178 and 179. The Hon‟ble Supreme
Court in K. Bhaskaran vs. Shankarn Vaidhyan Balan & Anr.
(1999) 7 SCC 510 after considering Sections 178 and 179 of Cr.P.C.
has opined that an offence may be committed in different localities
and thus can be tried in any court having jurisdiction over said
localities. To put it pithily, law recognizes more than one court having
territorial jurisdiction and the issue of territorial jurisdiction would
have to be decided with reference to whether a particular offence was
committed within the territorial jurisdiction of a Court.
8. Section 138 of the Negotiable Instruments Act, 1881 reads as
under:
“138. Dishonour of cheque for insufficiency, etc.,
of funds in the account. Where any cheque drawn
Crl.M.C. No.4054/2012 Page 3 of 10
by a person on an account maintained by him with
a banker for payment of any amount of money to
another person from out of that account for the
discharge, in whole or in part, of any debt or other
liability, is returned by the bank unpaid. either
because of the amount of money standing to the
credit of that account is insufficient to honour the
cheque or that it exceeds the amount arranged to
be paid from that account by an agreement made
with that bank, such person shall be deemed to
have committed an offence and shall, without
prejudice. to any other provision of this Act, be
punished with imprisonment for [a term which
may be extended to two years] , or with fine
which may extend to twice the amount of the
cheque, or with both:
Provided that nothing contained in this section
shall apply unless-
(a) the cheque has been, presented to the bank
within a period of six months from the date on
which it is drawn or within the period of its
validity, whichever is earlier;
(b) the payee or the holder in due course of the
cheque as the case may be, makes a demand for
the payment of the said amount of money by
giving a notice, in writing, to the drawer of the
cheque, [within thirty days] of the receipt of
information by him from the bank regarding the
return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the
payment of the said amount of money to the payee
or, as the case may be, to the holder in due course
of the cheque, within fifteen days of the receipt of
the said notice.
Explanation.- For the purposes of this section,"
debt or other liability" means a legally
enforceable debt or other liability.”
Crl.M.C. No.4054/2012 Page 4 of 10
9. In Bhaskaran ‟s case (supra) the Supreme Court had occasion to
deal with the issue of territorial jurisdiction in relation to Section 138
of the Act and of necessity, the discretion required the Supreme Court
to identify the various acts of omission and commission which
constitute the offence punishable under Section 138 of the Act. In
para 14 of the judgment, Hon‟ble Supreme Court of India highlighted
the following components of the offence under Section 138 of the N.I.
Act:
(i) drawing of the cheque;
(ii) presentation of the cheque to the bank;
(iii) returning of the cheque unpaid by the drawee bank;
(iv) giving notice in writing to the drawer of the cheque
demanding payment of the cheque amount;
(v) Failure of the drawer to make the payment within 15 days of
the receipt of the notice.
10. In para 15 & 16 of the K. Bhaskaran ‟s case (supra) it was
observed as under:
“15. It is not necessary that all the above five acts should
have been perpetrated at the same locality. It is possible
that each of those five acts could be done at 5 different
localities. But a concatenation of all the above five is a
sine qua non for the completion of the offence under
Section 138 of the Code. In this context a reference to
Section 178(d) of the Code is useful. It is extracted
below:
“178. (a)-(c) *
(d) Where the offence consists of several acts done in
different local areas,
Crl.M.C. No.4054/2012 Page 5 of 10
it may be enquired into or tried by a court having
jurisdiction over any of such local areas.
16. Thus it is clear, if the five different acts were done in
five different localities any one of the courts exercising
jurisdiction in one of the five local areas can become the
place of trial for the offence under Section 138 of the
Act. In other words, the complainant can choose any one
of those courts having jurisdiction over any one of the
local areas within the territorial limits of which any one
of those five acts was done. As the amplitude stands so
widened and so expansive it is an idle exercise to raise
jurisdictional question regarding the offence under
Section 138 of the Act.”
11. Further, in Shri Ishar Alloy Steels Ltd. vs. Jayaswals NECO
Ltd. (2001) 3 SCC 609 it was held that the bank referred to in Proviso
(a) to Section 138 of the Act would mean the drawee bank on which
the cheque was drawn and not all the banks where the cheque is
presented for collection including the bank of the payee, in whose
favour the cheque is issued.
12. In Harman Electronics Pvt. Ltd.&Anr. vs. National
Panasonic India Private Limited (2009) 1 SCC 720 , it was held that
the court where the cheque is deposited for collection, has jurisdiction
to try the case under Section 138 of the Act in terms of principles laid
down in K. Bhaskaran ‟ case (supra). It was further observed that a
notice of dishonour under Section 138 of the Act alone would not
confer the jurisdiction to try the accused at the place of issuance of the
notice.
13. The law regarding territorial jurisdiction of the Court in a case
under Section 138 of the Act is no longer res integra in view of law
laid down by the Apex Court in Nishant Aggarwal vs. Kailash
Kumar Sharma (2013) 10 SCC 72 wherein after considering the
Crl.M.C. No.4054/2012 Page 6 of 10
judgment in Shri Ishar Alloy Steels Ltd. (supra), K. Bhasran
(supra) and Harman Electronics Pvt. Ltd. (supra), it was observed
that issue of territorial jurisdiction of the courts did not even arise for
consideration in Shri Ishar Alloy Steels Ltd. (supra), therefore, it
does not affect the ratio in the case of K. Bhasakran’s (supra).
14. In Shri Ishar Alloy Steels Ltd. (supra), the Supreme Court
defined the term “the Bank” appearing in proviso (a) to Section 138 of
the Act would mean the drawee bank on which the cheque is drawn. It
was defined in the context of statutory period of six months as
mentioned in proviso (a), hence, it was held that the date of
presentation of the cheque for calculating statutory period of six
months will be the date of presentation of the cheque to the drawer
bank i.e. payee bank and not drawee‟s bank i.e. collecting bank.
15. In Nishant Aggarwal ‟s case (supra) the Apex Court reaffirmed
the jurisdiction of the Court where the cheque is presented for
collection. In this case it was observed as under:
“…The question which has to be decided in this
appeal is whether the Court, where a cheque is
deposited for collection, would have territorial
jurisdiction to try the accused for an offence
punishable under Section 138 of the Negotiable
Instruments Act, 1881 (in short “the N.I.Act”) or
would it be only the Court exercising territorial
jurisdiction over the drawee bank or the bank on
which the cheque is drawn?
xxxx xxxx xxxx xxxx xxxx xxxx xxxx
22. This Court in Harman Electronics case
considered Section 138 of the NI Act and also
referred to K. Bhaskaran case and quoted the five
components of offence under Section 138 which
have been noted in paragraph supra. This Court
Crl.M.C. No.4054/2012 Page 7 of 10
reiterated that the five different acts which are the
components of offence under Section 138 of the NI
Act were done in five different localities, any one
of the courts exercising jurisdiction in one of the
five local areas can become the place of trial for
the offence under Section 138 of the NI Act and
the complainant would be at liberty to file a
complaint at any of those places. Ultimately, this
Court held that the Chandigarh court had
jurisdiction to entertain the complaint because the
parties were carrying on business at Chandigarh,
branch office of the complainant was also in
Chandigarh, the transactions were carried on only
from Chandigarh and the cheque was issued and
presented at Chandigarh. This Court pointed out
that the complaint did not show that the cheque
was presented at Delhi, because it was absolutely
silent in that regard and, therefore, there was no
option but to presume that the cheque was
presented at Chandigarh. It is not in dispute that
the dishonour of the cheque also took place at
Chandigarh and, therefore, the only question which
arose before this Court for consideration was
whether the sending of notice from Delhi itself
would give rise to a cause of action in taking
cognizance under the NI Act. In such
circumstances, we are of the view that Harman
Electronics is only an authority on the question
where a court will have jurisdiction because only
notice is issued from the place which falls within
its jurisdiction and it does not deviate from the
other principles laid down in K. Bhaskaran . This
Court has accepted that the place where the cheque
was presented and dishonoured has jurisdiction to
try the complaint. In this way, this Court
concluded that issuance of notice would not by
itself give rise to a cause of action but
communication of the notice would. In other
words, the Court clarified that only on the service
of such notice and failure on the part of the
accused to pay the demanded amount within a
Crl.M.C. No.4054/2012 Page 8 of 10
period of 15 days thereafter, the commission of an
offence completes.
23. We are of the view that this Court in Harman
Electronics affirmed what it had said in K.
Bhaskaran that court within whose jurisdiction the
cheque is presented and in whose jurisdiction there
is failure to make payment within 15 days of the
receipt of notice can have jurisdiction to try the
offence under Section 138 of the NI Act. It is also
relevant to point out that while holding that the
Chandigarh court has jurisdiction, this Court in
Harman Electronics observed that in the case
before it, the complaint was silent as to whether
the said cheque was presented at Delhi. In the case
on hand, it is categorically stated that the cheque
was presented at Bhiwani whereas in Harman
Electronics the dishonour had taken place at
Chandigarh and this fact was taken into account
while holding that Chandigarh court has
jurisdiction. In the complaint in question, it is
specifically stated that the dishonour took place at
Bhiwani. We are also satisfied that nothing said in
Harman Electronics had adverse impact on the
complainant's case in the present case.
24. As observed earlier, we must note that in K.
Bhaskaran this Court has held that Section 178 of
the Code has widened the scope of jurisdiction of a
criminal court and Section 179 of the Code has
stretched it to still a wider horizon. Further, for the
sake of repetition, we reiterate that the judgment in
Ishar Alloy does not affect the ratio in K.
Bhaskaran which provides jurisdiction at the place
of residence of the payer and the payee. We are
satisfied that in the facts and circumstances and
even on merits, the High Court rightly refused to
exercise its extraordinary jurisdiction under
Section 482 of the Code and dismissed the petition
filed by the appellant-accused.”
Crl.M.C. No.4054/2012 Page 9 of 10
16. In the instant case the respondent/complainant has its office at
Greater Kailash, Part-I, New Delhi and the cheque in question was
deposited by the respondent No.2 in their bank account at Lajpat
Nagar, New Delhi. Applying the law laid down in the case of Nishant
Aggarwal (supra), therefore, the learned Metropolitan Magistrate at
Delhi has the jurisdiction to entertain and try the complaint under
Section 138 of the Act.
17. In view of the aforesaid discussion, the present petition deserves
to be dismissed and the same is hereby dismissed.
Trial court record be sent back forthwith
Crl.M.A.No.19281/2012
The application is dismissed as infructuous.
(VED PRAKASH VAISH)
JUDGE
FEBRUARY 4th, 2014
aj
Crl.M.C. No.4054/2012 Page 10 of 10