Divine Mission Society v. State

1. The petitioners issued two cheque nos. 912010 and 902011 dated 7^' August, 2010 and 5"' September, 2010 respectively for Cr[. M.C. IMos. 285/2012 and 286/2012 Page[1] of[9] 2013:DHC:6847 Rs.50 lacs each drawn on Allahabad Bank, Yamuna Nagar to respondent no.2 which were dishonoured upon being deposited by respondent no.2 at Axis Banlc, Lajpat Nagar, New Delhi whereupon respondent no.2 issued two notices of dishonour both dated 1®' October, 2010 and thereafter, instituted two complaints under Section 138 of the Negotiable Instruments Act before the Addl. Chief Metropolitan Magistrate, Saket, New Delhi. The learned Metropolitan Magistrate issued summons to the petitioners vide orders dated November 2010 and 14^^ December, 2010 respectively.

2. The petitioners have challenged the territorial jurisdiction of Delhi Court to entertain and try the complaints on the ground that the. deposit of cheques by respondent no.2 at Delhi would not confer the jurisdiction on Delhi Courts because the cheques were drawn at Yamuna Nagar, relying upon the judgments of the Supreme Court in Ishar Alloy Steel Ltd. v. Jayaswals NECO Ltd., (2001)

II AD SC 334 and Harman Electronics Pvt. Ltd. v. National Panasonic India Pvt. Ltd., (2009) 1 SCC 720.

3. The law with respect to the territorial jurisdiction of the Court under Section 138 of the Negotiable Instruments Act has been set at rest by the Supreme Court in Nishant Aggarwal v. Kailaslt Kumar Sharma, 2013 (7) SCALE 753 in which the Supreme Court, after considering Shri Ishar Alloy Steels Ltd. (supra) and Harman Electronics Private Limited (supra), held that the Court where the cheque is deposited for collection, has CrI. M.C. Nos. 285/2012 and 286/2012 a jurisdiction to try the accused under Section 138 of Negotiable Instruments Act in terms of the principles laid down in K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510. The Supreme Court held that the issue of territorial jurisdiction ofthe Courts did not even arise for consideration in Shri Ishar Alloy Steels Ltd. v.Jayaswals Neco Ltd. (2001) 3 SCC 609, and therefore it does not affect the ratio in K. Bhaskaran (supra). The Supreme Court further observed that in Harman Electronics Private Limited

V. National Panasonic India Private Limited, (2009) 1 SCC 720, the Court held that a notice of dishonor under Section 138 of Negotiable Instruments Act alone would not confer thejurisdiction to try the accused at the place of issuance of the notice..However, the Supreme Court did not deviate from the other principles laid down in K. Bhaskaran (supra). In Nishant Aggarwal (supra), the Supreme Court re-affirmed thejurisdiction of the Court where the cheque is presented for collection interms ofK. Bhaskaran(supra). Therelevant portion of the saidjudgment is reproduced hereunder; "2. 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?

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10. Mr. Ahmadi, learned senior counsel for the Appellant in support of his clairn that the Court at Bhiwani has no CrI. M.C. Nos. 285/2012and 286/2012 Page 3 of[9] yo jurisdiction heavily relied on the decision of this Court inShri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd. (2001) 3 see 609. We were taken through the entire judgment. Though the case is also related to N.I. Act, the issue of territorial jurisdiction was not the subject-matter thereof. InIshar Alloy Steels (supra), a three-Judge Bench of this Court defined the term "the bank" appearing in clause (a) of Section 138 of the N.I. Act as the drawer's bank. It was defined in the context of the statutory period of six months as mentioned in clause (a), hence, this Court held that the date ofpresentation of the cheque for calculating thestatutory time period of six months will be the date of presentation of the cheque to the drawer's bank i.e. Payee bank and not the drawee's bank i.e. Collecting bank. This Court has correctly applied the principle of strict interpretation appreciating that Section 138 of the N.I. Act creates an offence as the drawer of the cheque cannot be expected or saddled with the liability to hold the cheque amount in his account beyond six months. The reading of the entire decision in Isher Alloy Steel (supra) shows that jurisdiction of the Court to take cognizance arises only where cheque is presented to the bank of drawer either by drawee's bank or the drawee/payee personally within six months. In other words, the analysis ofthe said decision, the ratio of Isher Alloy Steel (supra) deals with such a situation where the cheque has been presented within six months to the drawer's bank by the payee in any manner. Inasmuch as the interpretation relates to filing of complaint within the statutory time period of sixmonths, we are of the view that the reliance on the law laid down in Isher Alloy Steel (supra) has no relevance as far as the present case is concerned. In fact, that is the reason that in Isher Alloy Steel (supra), the judgment iniT. Bhaskaran (supra) was not discussed since territorial jurisdiction was not the issue in that case. In view of the same, the definition of the term "the bank" envisaged inIsher Alloy Steel (supra) cannot be CrI. M.C. Nos. 285/2012 and286/2012 Page 4 of[9] employed to decide the jurisdictional aspect and dilute the ratio of the judgment in K. Bhaskaran (supra). Hence, we are of the view that on the strength of the judgment inIsher Alloy Steel (supra) defining the term "the bank", it cannot be said that jurisdiction to file a complaint under Section 138 of the N.I. Act does not lie at the place of drawee's bank. To put it clearly, the judgment in Isher Alloy Steel (supra) does not affect the ratio of the judgment iniT. Bhaskaran (supra) which provides for jurisdiction at the place of residence of the payer and the payee. In such circumstances, we are of the view that the judgment in Isher Alloy Steel (supra) as well as judgments of various High Courts relied on by the Appellant cannot be read against the Respondent to hold that the Magistrate at Bhiwani does not have the jurisdiction to try the complaint.

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12. Mr. Ahmadi, learned senior counsel for the Appellant has also relied on a decision of this Court mHarman Electronics Private Limited and Anr. v. National Panasonic India Private Limited: (2009) 1 SCC 720. In Harman Electronics (supra), the complainant and the accused entered into a business transaction. The accused was a resident of Chandigarh. He carried on the business in Chandigarh and issued a cheque in question at Chandigarh. The complainant had a Branch Office at Chandigarh although his Head Office was at Delhi. He presentedthe cheque givenby the accused at Chandigarh. The cheque was dishonoured at Chandigarh. The complainant issued a notice uponthe accused asking him •to pay the amount from New Delhi. The said notice was served on the accused at Chandigarh. On failure on the part of the accused to pay the amount within 15 days from the date of the communication of the said letter, the complainant filed a complaint at Delhi. In the complaint, it was stated that the Delhi Court has jurisdiction to try the case because the complainant was carrying on business at Delhi, the demand notice was issued from Delhi, the amount of chequewas payable at Delhi and the accused failed to make the payment of the said cheque within the statutory period of 15 days from the date of receipt of notice. It is ftirther seen thatthe cognizance of the offence was taken by the learned Magistrate at Delhi. The accused questioned the jurisdiction of the Magistrate at Delhi before the Addl. Sessions Judge, New Delhi. The Sessions Judge held that the Magistrate at Delhi had jurisdiction to entertain the complaint as, admittedly, the notice was sent by the complainant to the accused from Delhi and the complainant was having its Registered Office at Delhi and was carrying on business at Delhi. The learned Judge has also observed that the accused failed to makepaymentat Delhi as the demand was made from Delhi and the payment was to be made to the complainant at Delhi. The Delhi High Court dismissed the petition filed by the accused. Thereafter, the accused approached this Court. This Court considered Section 138 of the N.I. Act and also referred toK. Bhaskaran's case (supra) and quoted the five components of offence under Section 138which have been noted in paragraph supra. This Court reiterated that the five different acts which are the components of offence under Section 138 of the N.I. 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 Section138 of the N.I. 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 N.I. Act. In such circumstances, we are of the view that Harman Electronics (supra) 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 inJ^T. Bhaskaran (supra). 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 only on the service in such notice and failure on the part of the accused to pay the demanded amount within a period of 15 days, thereafter, the commission of an offence completes. We are of the view that this Court in Harman Electronics (supra) affirmed what it had said in K. Bhaskaran (supra) 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 N.I. Act. It is also relevant to.point out that while holding that the Chandigarh Court has jurisdiction, this Court in Harman Electronics (supra) 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 (supra) 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 inHarman Electronics (supra) hadadverse impact onthe complainant's case in the presentcase.

13. As observed earlier, we must note that inK. Bhaskaran (supra), 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 inIshar Alloy (supra) does not affect the ratio inK. Bhaskaran (supra) 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 Appellantaccused.

14. In the light of the above discussion, we hold that the ratio laid down in K. Bhaskaran (supra) squarely applies to the case on hand. The said principle was correctly applied by the learned Sessions Judge as well as the High Court. Consequently, the appeal fails and the same is dismissed. In view of the dismissal of the appeal, the interim order granted by this Court on 09.12.2011 shall stand vacated." (Emphasis supplied)

4. This case is squarely covered by Nishant Aggarwal (supra) as the cheques in question were deposited by the respondent no.2 in their account with Axis Bank, Lajpat Nagar, New Delhi and, therefore, thelearned Metropolitan Magistrate has clear jurisdiction to entertain and try the complaint under Section 138 of the Negotiable Instruments Act. CrI. M.C. Nos. 285/2012 and 286/2012 Page 8of[9]

5. There is no merit in these petitions which are hereby dismissed. The interim order dated 25"' January, 2012 is vacated. The complaints before the learned Trial Court are listed on 30"^ September, 2013 when the learned Trial Court shall proceed with the matters. Considering the delay of the proceedings due to interim order granted by this Court, the learned Trial Court shall expedite the hearing and endeavour to complete the trial within a period of four months.

6. Dasti. r.R. MIDHA, J SEPTEMBER 5,2013 dk CrI. M.C. Nos. 285/2012 and 286/2012 Page 9 of[9]