Bombay High Court

Mr. Madan vs A Public Limited Company Having ... on 29 November, 2012

Bench: T.V. Nalawade

                                                        Cri.W.P. No. 1074/11
                                       1




                                                                         
                   IN THE HIGH COURT AT BOMBAY
               APPELLATE SIDE, BENCH AT AURANGABAD




                                                 
             CRIMINAL WRIT PETITION NO. 1074 OF 2011


     Mr. Madan s/o. Motichand Gupta,
     Age 42 years, Occu. Business,




                                                
     R/o. WZ 16 and 17, Nangli Jalib,
     B-1, Block, Janak Puti,
     New Delhi-58.
     Proprietor of Quick Services.               ....Petitioner.




                                    
           Versus     
     Videocon Industries Ltd.
                     
     A Public limited company having its
     Registered office at 14 Km Stone Paithan,
     District Aurangabad and administrative
     Office at Auto Cars Compound,
     Adalat Road, Aurangabad,
      

     Through its authorized signatory,
     Mr. Mukesh Dwarkadas Jariwala,
   



     Age 42 years, Occu. Service,
     R/o. Aurangabad.
     And Branch Office at
     221, Okhala Industries Phase-III,
     New Delhi-110020.                         ....Respondent.





     Mr. G.G. Kadam, Advocate for petitioner.
     Mr. L.B. Pallod, Advocate for respondent.





                       CORAM                : T. V. NALAWADE, J.
                       Reserved on          : 21st November 2012
                       Declared on          : 29th November, 2012.

     JUDGMENT :

1. Rule. Rule made returnable forthwith. Heard both

sides by consent for final disposal.

Cri.W.P. No. 1074/11

2. The petition is filed under Articles 226 and 227 of

Constitution of India and also under section 482 of Criminal

Procedure Code (for short "Cr.P.C.") by the accused from S.C.C. No.

2032/2010, which is pending in the Court of Judicial Magistrate,

First Class, Aurangabad. The case is filed by the respondent under

section 138 of Negotiable Instruments Act (for short "N.I. Act").

The application at Exh. 9 was filed for dismissal of the complaint

under section 203 of Cr.P.C. by the petitioner/accused and it is

rejected by J.M.F.C. In the application at Exh. 9, defence was taken

that the cheque was given by way of security and it is misused by

the complainant. The other defence of absence of service of

statutory notice was also taken.

3. In the present proceedings, the accused has

contended that the Court of J.M.F.C., Aurangabad has no territorial

jurisdiction in respect of offence described in the complaint. Some

other grounds are also mentioned in the petition. In view of the

nature of other defences taken, this Court made it clear that only

the ground of territorial jurisdiction can be considered at this

stage. In the present proceedings, a relief of quashing the

proceeding of criminal case is claimed. The relief of setting aside

the order made by J.M.F.C. at Exh. 9 is also claimed. Alternatively,

Cri.W.P. No. 1074/11

the relief is claimed for giving a direction to J.M.F.C. to return the

complaint to complainant on the ground of want of territorial

jurisdiction.

4. In view of the provisions of 462 of Cr.P.C., this Court

made it clear to the petitioner/accused that the quashing of the

proceeding on the ground of want of territorial jurisdiction is not

possible. In view of this circumstance, the advocate for the

petitioner argued mainly for alternative relief like for direction to

return the complaint to complainant by holding that the Court of

J.M.F.C., Aurangabad, has no territorial jurisdiction over the

offence.

5. The contentions made in the complaint show that the

complainant - company is a public limited company, having

registered office at Chitegaon, Tahsil Paithan, District Aurangabad.

Its branch offices are at various places in India including

Aurangabad. The accused is proprietor of a private concern and

he is doing business in Delhi. At paragraph No. 4 of the complaint,

it is specifically contended that credit facility was given to the

accused in Delhi branch of complainant company and as against

this facility, goods were supplied to the accused. As against these

transactions, the amount of Rs. 5,09,643/- was due from accused

Cri.W.P. No. 1074/11

to the complainant. It is contended that in discharge of this

liability, the cheque in question was issued by the accused. The

cheque was drawn on the account of accused from a bank of

Delhi. This cheque was presented for encashment by the

complainant in H.D.F.C. Bank, Branch Aurangabad. When the

cheque bounced, statutory notice came to be given from

Aurangabad. In the notice the complainant asked the accused to

make the payment of cheque amount at Aurangabad, but during

the period prescribed by law, such payment was not made and so

the complaint came to be filed.

6. It is the case of the complainant that there is

agreement between parties that the dispute about such

transactions will be subject to the jurisdiction of Aurangabad

Court. According to the complainant, such condition is mentioned

in invoice prepared during the transaction. It is also the case of

the complainant that intimation of bouncing of cheque was

received at Aurangabad. It is contended that as in the invoice

there is aforesaid contention, as the cheque was deposited at

Aurangabad, as the intimation of bouncing of cheque was

received at Aurangabad, as statutory notice was given from

Aurangabad and as in the statutory notice the accused was

directed to make payment at Aurangabad, the Court from

Cri.W.P. No. 1074/11

Aurangabad has jurisdiction over the offence. Copies of some

documents titled as 'Tax Invoice' are produced by the complainant

in this proceeding. These documents show that the transactions

shall be subject to Aurangabad jurisdiction. Similarly, copy of

notice sent by R.P.A.D. to the accused from Aurangabad is

produced by the complainant.




                                    
     7.          On   the
                       ig   other   hand,    it    is    the     case      of    the

petitioner/accused that all the transactions took place at Delhi.

The accused has contended that the goods were supplied at

Delhi, the cheque bearing No. 004919, which was drawn on Bank

from Delhi was handed over to the complainant at Delhi, the bank

from Delhi must have been given intimation with regard to

bouncing of cheque, even subsequent cheques in respect of the

transactions were given on the same bank, the remaining

cheques were deposited by the complainant for encashment in

bank from Delhi. Civil suit in respect of cheque in question is filed

by the complainant for recovery of amount in a Court from Delhi

and in that suit specific contention is made that the Delhi Court

has jurisdiction as the transaction took place in Delhi. At

paragraph No. 6 of the petition, the contention made in the suit at

paragraph No. 12 is quoted and it is as under :-

Cri.W.P. No. 1074/11

"12. The Defendant carry on business at Delhi and the defendant reside at Delhi. The goods

were ordered and received by the Defendant at Delhi and payments with respect thereto were to be made at Delhi. This Hon'ble Court,

therefore, has the territorial jurisdiction, to entertain and adjudicate the instant suit."

Copy of plaint of the aforesaid suit is filed. Some record is filed to

show that that subsequent cheque bearing No. 004920 given by

the accused to the complainant was presented to bank from Delhi

for encashment and it was honoured by the Bank. It is the case of

the accused that in view of the aforesaid facts and circumstances,

the J.M.F.C., Aurangabad has no territorial jurisdiction over the

offence.

8. On the aforesaid points, both the sides have cited

some reported cases. Before going to the observations made by

the Apex Court and High Courts, it is desirable to see the relevant

provisions in the aforesaid regard.

9. Section 177 of Cr.P.C. runs as under :-

"177.Ordinary place of inquiry and trial.- Every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed. "

Cri.W.P. No. 1074/11

The term "ordinarily" used in section 177 of Cr.P.C. shows that this

is general provision, however, in this section there is no reference

to other sections like sections 178 to 186 of Cr.P.C. which also

govern the jurisdiction of the Criminal Court in inquiries and trials

and which are also placed in Chapter XIII of Cr.P.C. Thus, section

177 of Cr.P.C. has left the place open for trial. It is settled law that

aforesaid subsequent provisions are not to be treated as the only

exceptions to section 177 of Cr.P.C. [Relied on AIR 1961 SC

1589 (Purushottamdas Dalmia Vs. State of West Bengal)].

In the landmark case reported as AIR 1999 SC 3762 [K.

Bhaskaran Vs. Sankaran Vaidhyan Balan and Anr.] also, it is

laid down that the word "ordinarily" used in section 177 indicates

that the rule is not invariable in all cases.

10. In the landmark case of K. Bhaskaran cited supra

the Apex Court has observed that following five acts are the

components of the offence punishable under section 138 of N.I.

Act :-

     (i)      Drawing of the cheque,

     (ii)     Presentation of the cheque to the bank,

     (iii)    Returning the cheque unpaid by the drawee bank,

     (iv)     Giving notice in writing to the drawer of the demanding of





                                                       Cri.W.P. No. 1074/11





                                                                       
     payment of the cheque amount,

(v) Failure of the drawer to make payment within 15 days of the

receipt of the notice.

11. At paragraph No. 11 of the aforesaid landmark case of

K. Bhaskaran, the Apex Court has laid down that the offence is

completed only when there is failure of the drawer of the cheque

to pay the cheque amount within 15 days of receipt of notice. In

this case and the case reported as 2009 CRI.L.J. 1109

(Supreme Court) [M/s. Harman Electronics (P) Ltd. & Anr.

Vs. M/s. National Panasonic India Ltd.] the law with regard to

statutory notice mentioned in section 138 of N.I. Act is

interpreted. It is observed that for filing of the complaint, some

procedure is required to be followed by the complainant, which

includes sending of notice. But, in view of the provision of section

138 of N.I. Act, the offence does not become complete unless and

until the period given for making payment of the cheque amount

after receipt of notice is over. In K. Bhaskaran's case, it is

observed by the Apex Court that it is normally difficult to fix up

particular locality as a place of failure to pay the amount covered

by the cheque and a place for that purpose would depend upon a

variety of the factors. In view of this difficulty, the Apex Court

went on discussing the components of the offence and observed

Cri.W.P. No. 1074/11

that these five components can be considered for determination

of the jurisdiction of the Court. It is further observed that it is not

necessary that all the above five acts should have been

perpetrated at the same locality. It is observed that it is possible

that each of these five acts could be done at different locality, but

concatenation of all the above five is sine qua non for the

completion of the offence punishable under section 138 of N.I.

Act. After making this observation, the Apex Court discussed the

provision of section 178 (d) of Cr.P.C. and the Apex Court laid

down that in view of section 178 (d) of Cr.P.C., the Court

exercising jurisdiction in one of the five local areas, where the

aforesaid five acts were done, can become the place of trial for

the offence under section 138 of N.I. Act.

12. In view of the aforesaid discussion made by the Apex

Court, it becomes duty of the Criminal Court to ascertain, where

the payment of the amount covered by the cheque was to be

made. If it is difficult for the Court to fix up particular locality as

the place of occurrence of offence on the basis of such criteria,

then the Court is expected to follow the procedure laid down by

the Apex Court in K. Bhaskaran's case. The Apex Court has

referred section 178 (a) and even section 179 of Cr.P.C. in this

regard.

Cri.W.P. No. 1074/11

Section 178 (a) of Cr.P.C. runs as under :-

"178. Place of inquiry or trial.- (a)

When it is uncertain in which of several local areas an offence was committed, or"

Section 178 (d) of Cr.P.C. runs as under :-

"(d) where it consists of several acts done in

different local areas, it may be inquired into or tried by a Court having jurisdiction over any of

such local areas."

Thus, as provided in section 178 (a) of Cr.P.C., when there is no

certainty about the place, where the offence was committed, the

Court can take recourse of section 178 (d) and by using both

these sections and the aforesaid five components, the Court can

ascertain as to which Court can have local jurisdiction over the

offence.

13. In the present case, the relevant facts are already

quoted. The record and the submissions are sufficient to infer that

the transaction took place at Delhi, the credit facility was given to

the accused in Delhi branch of the complainant company and so

the payment in respect of goods purchased was to be made at

Delhi and for making the payment, the cheque was given in Delhi.

On the basis of these facts, inference is easy in the present case

Cri.W.P. No. 1074/11

that the Court from Delhi has jurisdiction over the offence. Only

because there is the mention in invoice like "the dispute will be

subject to Aurangabad jurisdiction", inference is not possible that

offence was committed in Aurangabad. In this regard also, the law

is developed and it is being discussed hereinafter.

14. If we consider five components mentioned in K.

Bhaskaran's case one by one, in the present case, it is not

possible to hold that J.M.F.C. Aurangabad has jurisdiction over the

offence.

15. The first component is "drawing of the cheque". In the

present case the cheque was drawn on account of the accused

from a bank of Delhi. The second component is "presentation of

the cheque to the bank". This point is discussed by the Apex

Court in the case reported as 2001 Bom.C.R.(Cri.) 419 [Ishar

Alley Steels Ltd. Vs. Jayaswals Neco Limited]. K.

Bhaskaran's case was decided on 29.9.1999 and Ishar Alley's

case was decided on 22.2.2001. Though the point involved in

Ishar Alley's case was different viz. in which bank the cheque

should be deposited within a prescribed period of six months for

encashment, whether it is the bank of the drawer or the bank of

payee, the second component is a part of this point. In view of the

Cri.W.P. No. 1074/11

ratio of Ishar Alley's case, it needs to be presumed that the

cheque needs to be presented in the bank of drawer for the

compliance of requirement of second component. In Ishar Alley's

case it is made clear that for encashment the payee may present

the cheque in his own bank, collecting bank, but that bank is not

referred in section 138 of N.I. Act. Third component is "returning

the cheque unpaid by the drawee bank". In this regard also, it

needs to be presumed that it refers to bouncing of cheque in the

bank where the accused had the account. Thus, the component

Nos. (ii) and (iii) in the present case had the place, Delhi. Only

because the cheque was presented at the bank from Aurangabad

by the complainant, the place for component Nos. (ii) and (iii)

cannot become Aurangabad.

16. Component No. (iv) is "giving the notice in writing to

the drawer of the cheque to demand the payment of cheque

amount". This component has two parts. It is mandatory for the

complainant to give statutory notice to make the demand of

cheque amount. However, this component does not give liberty to

the complainant to change the place, where the amount was to be

paid under the transaction. On this point, there is the case of

Harman Electronics cited supra. This case was decided on

12.12.2008. The advocate of complainant placed reliance on the

Cri.W.P. No. 1074/11

decision of the Apex Court given in Criminal Appeal No.

1715/2008 [Smt. Shamshad Begum Vs. B. Mohammed].

This case was decided by the Apex Court on 3.11.2008. In

Shamshad Begum's case the complainant changed his address

and shifted to Manglore from Banglore. He had sent statutory

notice from Manglore and in view of this peculiar circumstance,

the Apex Court held that Manglore Court can also have

jurisdiction. The Apex Court referred the landmark case of K.

Bhaskaran cited supra. In any case, in subsequently decided

case viz. Harman Electronics cited supra at paragraph No. 14,

the Apex Court has laid down that issuance of notice would not by

itself give rise to cause of action, but the communication of the

notice would. The facts of the case Harman Electronics cited

supra show that only on the basis of notice sent from a particular

place, Delhi, the complaint was filed at Delhi. The transaction had

taken place at Chandigarh and the payment was also to be made

as per transaction in Chandigarh. The cheque was drawn on a

bank from Chandigarh and there was the facility with this bank to

encash the cheque there. In view of these circumstances, the

Apex Court held that only because the notice was given from

Delhi, the jurisdiction cannot be given to the Court from Delhi.

Harman Electronics' case is referred and discussed by Division

Bench of this Court in the case reported as 2010 (3) Mh.L.J. 234

Cri.W.P. No. 1074/11

[ Preetha S. Babu, Ernakulum Vs. Voltas Ltd., Chochin and

Anr.]. The Division Bench of this Court has held that on the

aforesaid point, the ratio of Harman Electronics is binding on

the Courts. The facts of Harman Electronics are very much

similar to the facts of present case. So, even if the fourth

component it is considered, it cannot be said that due to giving of

notice from Aurangabad, the Court from Aurangabad has got

jurisdiction over the offence.

17. Fifth component is that "failure of the drawer to make

payment within 15 days of the receipt of notice". It is already

observed that as per the transaction, the payment was to be

made in Delhi in the credit account opened for the accused in

Delhi branch of the complainant. Thus, the place of payment was

fixed and this component is also not in favour of the complainant.

The complainant made the demand to the accused in the

statutory notice and asked him to make payment at Aurangabad.

Such a situation is also discussed by the Apex Court in Harman

Electronics' case cited supra. Paragraph Nos. 24 and 25 of the

reported case are relevant in this regard. Those are as under :-

"24. Indisputably all statues deserve their strict application, but while doing so the cardinal principles therefor cannot be lost sight of. A Court derives a jurisdiction only when the

Cri.W.P. No. 1074/11

cause of action arose within his jurisdiction. The same cannot be conferred by any act of

omission or commission on the part of the accused. A distinction must also be borne in mind between the ingredient of an offence and

commission of a part of the offence. While issuance of a notice by the holder of a negotiable instrument is necessary, service

thereof is also imperative. Only on a service of such notice and failure on the part of the

accused to pay the demanded amount within a period of 15 days thereafter, commission of an

completes. Giving of notice, therefore, cannot have any precedent over the service It is only from that view of the matter in Dalmia Cement

(Bharat) Ltd. v. Galaxy Traders & Agencies Ltd., [(2001) 6 SCC 463] emphasis has been laid on

service of notice.

25. We cannot, as things stand today, be

oblivious of the fact that a banking institution holding several cheques signed by the same borrower cannot only present the cheque for its encashment at four different places but also

may serve noties from four different places so as to enable it to file four complaint cases at four different places. This only causes grave harassment to the accused. It is, therefore, necessary in a case of this nature to strike a balance between the right of the complainant

Cri.W.P. No. 1074/11

and the right of an accused viz-a-viz the provisions of the Code of Criminal Procedure."

So, place of payment fixed by transaction cannot be ordinarily

changed by subsequent acts like notice.

18. For complainant, reliance was placed on some more

reported cases. The cases are as follows :-

(i)

1993 CRI.L.J. 680 Bombay [Rakesh Nemkumar Porwal Vs. Narayan Dhondu High Court

Joglekar and Anr.],

(ii) 2010 (3) Mh.L.J. 246 Bombay High Court,

[Crompton Greaves Ltd., Mumbai Vs. Shivam Traders, Thane and Ors.],

(iii) 2012 (2) Mh.L.J. 780 Bombay High Court [Mahindra and Mahindra Financial Services

Ltd., Nagpur Vs. Nitin s/o. Vishnupant Thakre],

(iv) 2011 (4) Mh.L.J. 275 Bombay High Court [ASR Systems Pvt. Ltd. New Delhi and Anr. Vs.

Kimberly Clark Hygiene Products] and

(v) 2011 (1) DCR 78 Bombay High Court [M/s. Sai Auto Agencies Vs. Sheikh Yusuf Sheikh Umar].

Cri.W.P. No. 1074/11

Copy of decision given by this Court in Criminal Writ Petition

No. 30/2011 [Rajendra Marga Gaikwad VS. Kail Limited]

Bombay High Court, Aurangabad Bench, is also produced. It

is already observed that facts of each and every case are always

different. It is up to the Court to ascertain as to which Court will

have jurisdiction over a particular offence. The ratios laid down in

this regard are already discussed.

19.

In view of the discussion made above, this Court holds

that the Court of J.M.F.C., Aurangabad has no jurisdiction over the

offence described in the complaint filed by the respondent. So the

order.

      


                                   ORDER
   



                 (I)     Petition is allowed.





                 (II)    Process issued by the Judicial Magistrate, First

Class, Aurangabad at Exh. 9 in S.C.C. No. 2032/2010

is hereby quashed and set aside.

(III) After receipt of this order, within four weeks

from that day, the Magistrate is to return the

complaint to the complaint along with entire record

for presentation before competent Court having

Cri.W.P. No. 1074/11

jurisdiction.

(IV) The complainant may file the complaint before

Magistrate having jurisdiction within two weeks

thereafter.

(V) The complainant will be at liberty to move the