M/S. GEE PEE FOODS PVT. LTD. & ORS. v. SH. DIGVIJAY SINGH

1. The question that falls for determination in this Revision Petition is, “whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 (the Act) can be presented at a place where the Complainant deposited the cheque in his Bank (i.e. at the place where the collecting Bank is situated).”

2. A complaint under Section 138 read with Section 142 of the Act was presented against the Petitioners on the averments that on 01.03.2009, the Respondent was appointed as Chief Executive Officer (CEO) with the First Petitioner on a monthly salary of `75,000/- to establish its operations in Northern India. In discharge of the liability to pay the salary, the Petitioners handed over a cheque No.082471 dated 29.04.2009 for `74,800/- drawn on IDBI Bank, 44, Shakespeare Sarani Branch, 2013:DHC:242 Kolkata-700 017 to the Respondent. The said cheque when presented with HDFC Bank, New Delhi stood dishonoured with remarks of „insufficient funds‟. In the complaint it was alleged that bouncing of the said cheque was brought to the notice of Petitioners No.2 and 3 and on their instructions, the Respondent presented the cheque again but it was again dishonoured on presentation with the remarks “payment stopped by drawer”. When the factum of bouncing of the said cheque again was brought to the notice of Petitioners No.2 and 3 (accused No.2 and 3 before the learned Metropolitan Magistrate) they again apologized and assured to make arrangement for encashment of the cheque. The cheque was again dishonoured when presented on 18.08.2009. A legal notice through the lawyer at New Delhi was dispatched to the Petitioners and on failure to make the payment within the statutory period as laid down under Section 138 of the Act, a complaint under Section 138 read with Section 142 of the Act was filed against the Petitioners.

3. After recording pre summoning evidence, the Petitioners were summoned for the offence punishable under Section 138 of the Act. They moved a Petition before the High Court for quashing of the complaint on the ground that the Delhi Courts had no territorial jurisdiction to try the complaint as no part of the cause of action took place within the jurisdiction of NCT of Delhi. It is stated that the said Petition was withdrawn with liberty to approach the Trial Court. Thus, the Petitioners filed an application under Section 177 of the Code of Criminal Procedure before the Court of learned Metropolitan Magistrate („MM‟). The following averments were made in the application:- “(a) Applicants/accused are having their residence and office in Kolkata in the State of West Bengal. (b) Complainant has been allegedly appointed as a CEO of the accused No.1 – Company in Kolkata.

(c) As per para 2 of the complaint, the cheuqe issued to the complainant which got allegedly bounced was drawn on IDBI Bank, 44, Shakespeare Sarani, Kolkata.

(d) As per para 3 of the complaint, the aforesaid cheque was re-presented to the applicants’ banks at Kolkata which also stood allegedly returned. (e) As per para 5 of the compliant, a legal notice was allegedly served upon the applicants/accused in Kolkata. (f) The entire cause of action pertaining to the question of employment of the complainant as well as issuance of cheque and service of legal notice, if any, arose in Kolkata and no part of the same arose in Delhi (as per the averments of the complainant in the complaint itself). As such, this Ld. Court does not possess the territorial jurisdiction to try and proceed with the entire complaint.”

4. It was stated that the legal notice allegedly served upon the Petitioners from Delhi will not confer jurisdiction of Delhi Courts.

5. The application moved under Section 177 Cr.P.C. was contested by the Respondent. However, the factum of the cheque in question having not been delivered to the Respondent at Kolkata being drawn on IDBI Bank 44, Shakespeare Sarani Branch, Kolkata-700 017 was not disputed. It was asserted that since the Respondent presented the cheque to HDFC Bank at New Delhi branch for collection, part of cause of action arose within the Union Territory of Delhi and thus, the Delhi Courts did have the jurisdiction.

6. The learned MM relying on a judgment of learned Single Judge of this Court in Religare Finvest Ltd. v. State & Anr. 173 (2010) DLT 185 opined that the place where the cheque was presented by the payee was one of the essential ingredients of Section 138 of the Act and thus, part of the cause of action arose within the territory of Delhi, consequently, the application was dismissed.

7. In the Revision Petition, it is stated that in fact the Respondent had worked with the First Petitioner only for one month. It was stated that the first cheque was dishonoured on presentation on the ground of insufficient funds but because of suspicious and unbecoming conduct of the Respondent, they had stopped payment of the cheque and when the Respondent approached the Petitioners, the amount of `74,800/- was deposited in the Respondent‟s account but, thereafter the Respondent maliciously presented the cheque. Obviously, these questions being disputed questions of facts are not to be gone into at this stage. What is to be seen is whether on the basis of the averments made in the complaint, whether some of the essential acts forming part of the offence or cause of action was done within the territory of Delhi so as to confer jurisdiction on Delhi Courts. The question of presentation of the cheque at a place other than the drawee Bank directly came up for consideration before a learned Single Judge of this Court in Online IT Shoppe India Pvt. Ltd. & Ors. v. State & Anr. Crl.MC No.2695/2009 decided on 20.11.2009 (V.K.Jain, J.). The learned Single Judge while relying on Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd; (2001) 3 SCC 609 observed that Shri Ishar Alloy had dealt with the issue of “the Bank” referred to in Clause (a) to the proviso to Section 138 of the Act as the drawee Bank on which the cheque is 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. In paras 8 and 9, the learned Single Judge held as under:- “8. As regards presentation of the cheque, the learned counsel for the petitioner has relied upon the decision of the Hon’ble Supreme Court in Shri Ishar Alloy Steels Ltd. Vs. Jayaswals Neco Ltd; (2001) 3 SCC 609. In this case the Hon’ble Supreme Court, interalia, held that “The bank” referred to in clause (a) to the proviso of Section 138 of the Act would mean the drawee bank on which the cheque is 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.” It was further observed that “the payee of the cheque has the option to present the cheque in any bank including the collecting bank where he has his account but to attract the criminal liability of the drawer of the cheque such collecting bank is obliged to present the cheque in the drawee or Payee bank on which the cheque is drawn within the period of six months from the date on which it is shown to have been issued.” In para 10 of the judgment the Hon’ble Supreme Court further observed that “Sections 3, 72 and 138 of the Act would leave no doubt in our mind that the law mandates the cheque to be presented at the bank on which it is drawn if the drawer is to be held criminally liable.”

9. The ratio of the above referred judgment of the Hon’ble Supreme Court is that a cheque is deemed to have been presented to the banker of the drawer irrespective of the fact whether it is deposited by the payee in his own bank. The banker of the payee, after receiving the cheque from him, is required to present it to the banker of the drawer and therefore if the cheque issued from a bank in Ernakulam is deposited in Delhi, the bank in which it is deposited in Delhi, is required to present it to the bank at Ernakulam, for the purpose of encashment. Therefore, it cannot be said that the cheques issued by the petitioners were presented in Delhi, despite the fact that the bank in which the respondent No. 2 had an account was in Delhi, the cheque shall be deemed to have been presented only to the bank at Ernakulam on which they were drawn. Therefore, deposit of cheques in Delhi would not confer jurisdiction of Delhi court to try this complaint.”

8. Another Single Judge of this Court in Mahika Enterprises & Anr. v. State (NCT of Delhi) & Anr. 173 (2010) DLT 361 relied on the judgment of the Supreme Court in Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd; (2001) 3 SCC 609 and the judgment of this Court in Shroff Publishers & Distributors Pvt. Ltd. v. Springer India Pvt. Ltd. 143 (2007) DLT 661; ICICI Bank Limited v. Subhash Chand Bansal & Ors., 160 (2009) DLT 379; and Online IT Shoppe India Pvt. Ltd. & Ors. v. State & Anr. I (2010) DLT (Crl.) 110 and held that to attract the criminal liability of the drawer of the cheque, the collecting bank is obliged to present the cheque in the drawer‟s bank and the Courts where the collecting Bank is situated on this ground itself will not have jurisdiction to entertain the complaint. Para 12 of the report is extracted hereunder:-