Calcutta High Court (Appellete Side)

Mahendra Kumar Agarwal vs The State Of West Bengal & Anr on 30 July, 2021

                                     1



                     IN THE HIGH COURT AT CALCUTTA

                  CRIMINAL REVISIONAL JURISDICTION

Present:

THE HON'BLE JUSTICE JAY SENGUPTA

                           C.R.R. 2015 of 2019
                  CRAN 2/2019 (Old CRAN 4454/2019)
                  CRAN 3/2020 (Old CRAN 1050/2020)
                         Mahendra Kumar Agarwal
                                  Versus
                      The State of West Bengal & Anr.


For the petitioner                  : Mr. Ayan Bhattacharjee
                                     Mr. Abhijit Sarkar
                                     Mr. Apalak Basu
                                     Mr. Abhik C Kundu
                                                     ....Advocates


For the Opposite Party No. 2        : Mr. Sabyasachi Banerjee
                                     Mr. Minal Palana
                                     Mr. Cedric Fernandez
                                                    ..... Advocates


Lastly heard on                     : 15.07.2021
Judgment on                         : 30.07.2021



JAY SENGUPTA, J:


1.

This is an application for quashing of a proceeding in Case No.

C/1386 of 2019 pending before the Learned Judicial Magistrate, 5th Court,

Alipore, South 24-Parganas under Section 138 read with Section 141 of the

Negotiable Instruments Act and all orders passed therein including the

orders dated 26.02.2019, 28.03.2019 and 09.07.2019.

2. While the petitioner is the accused No. 3 before the learned Trial

Court, the opposite party No. 2 is the complainant. It was alleged in the

petition of complaint that two post dated cheques for Rs. 32,486/- and Rs.

25,00,000/-, respectively, both dated 01.10.2018 and drawn on the ICICI

Bank, Hyderabad Branch, duly signed by the present petitioner, were issued

in favour of the complainant/opposite party in due discharge of liability. The

instant case relates to the cheque of Rs. 25, 00,000/-. According to the

complainant, the company deposited the cheque within the validity period

with its banker, namely, the Kotak Mahindra Bank for encashment. But, the

same was dishonoured. This led to the initiation of the present proceeding.

3. On 26.02.2019 the learned Chief Judicial Magistrate, Alipore, South

24 Parganas was pleased to take cognizance of the alleged offences and

transfer the case to the file of the learned Judicial Magistrate, 5th Court,

Alipore, South 24 Parganas. On 28.03.2019 the complainant was examined

under Section 200 of the Code. An affidavit was filed by the complainant.

After perusing the petition of complaint, the documents filed, the initial

deposition and the written affidavit, the learned Trial Court was pleased to

issue process against the accused. On 09.07.2019, after being satisfied with

the service of summons, the learned Trial Court was pleased to issue

warrant of arrest against the accused Nos. 2 and 3.

4. Mr. Ayan Bhattacharjee, learned Counsel appearing on behalf of the

petitioner, submitted as follows. The challenge to the impugned proceeding

and the orders passed therein are restricted mainly to two issues. One, the

learned Trial Court did not have any territorial jurisdiction to try the offence.

Two, no enquiry, as contemplated under Section 202 of the Code, was

undertaken although the accused resided beyond the territorial jurisdiction

of the learned Trial Court. By the Amendment Act 26 of 2015, Chapter XVII

of the Negotiable Instruments Act was virtually redrafted and Sections 142

and 143 of the said Act were re-structured. According to the said

amendment, if a cheque was delivered for collection through an account, the

branch of the bank where the payee or the holder in due course maintained

the account, attracted the territorial jurisdiction. But, if a cheque was

presented for payment by the payee or the holder in due course "otherwise

through an account", the branch of the drawee bank derived such

jurisdiction. As per the present facts, the only banker which was mentioned

in the petition of complaint was the Kotak Mohindra Bank situated at the

Ground Floor, 5 Gorky Terrace, Kolkata 700017 and the same fell beyond

the territorial jurisdiction of the learned Trial Court. The most distinctive

part in this litigation was that the cheque in question was purportedly

deposited at a kiosk situated at the Ground Floor of 5 Gorky Terrace,

Kolkata 700017. A kiosk, by no stretch of imagination, can be inextricably

connected with banking affairs and therefore, the same did not satisfy the

test of a 'branch' as defined under the Banking Regulation Act, 1949. Since

the cheque was presented at the kiosk, which was clearly not a branch of a

bank, the same could not be said to have been presented for payment

through an account and therefore, the original bank of the drawer attracted

the jurisdiction. Any other interpretation would dilute the Clause (b) of Sub-

section (2) of Section 142 of the Negotiable Instruments Act. It was not

permissible to omit any part of the provision and the whole section had to be

read together and an attempt was to be made to reconcile both the parts. On

this, reliance was placed on State of Bihar vs. Harilal Kejwarilal, AIR 1960

SC 47. In Premier Roller Flour Mills & Ors. vs. ICICI Bank Limited and Ors.,

(2009) 1 Gau LR 413, the Hon'ble Gujarat High Court held that when a

cheque was presented for payment over the counter the complaint was to be

filed before the Court where the drawer maintained his account. Moreover,

the learned Trial Court erred in issuing warrant of arrest without exercising

sufficient caution. This went against the principle laid down by the Hon'ble

Apex Court in Inder Mohan Goswami & Anr. vs. State of Uttaranchal & Anr.,

(2007) 12 SCC 1. Secondly, on the issue of non-compliance of Section 202 of

the Code, the law was well settled that even in a proceeding under the

Negotiable Instruments Act, an enquiry as contemplated under Section 202

of the Code was mandatory if the accused resided beyond the territorial

jurisdiction of the learned Trial Court. On this, reliance was placed on the

decision of a Constitution Bench of the Hon'ble Apex Court in Re:

expeditious trial of cases under Section 138 of the Negotiable Instruments

Act, 1881, AIR 2021 SC 1957. Reliance was also placed on a decision of this

Court in Sheetal Amit Patil & Ors. vs. The State of West Bengal,

MANU/WB/0397/2021. According to the decision in Sheetal Amit Patil

(supra), a mandatory enquiry, whether by taking evidence on affidavit or by

restricting the enquiry to examination of the documents or not, had to be

undertaken in clear terms under Section 202 of the Code before process

could be issued as the accused resided beyond the territorial jurisdiction of

the learned Trial Court. A non-compliance of such provision would render

the proceeding bad, at least from the stage of issuance of process.

5. Mr. Sabyasachi Banerjee, learned Counsel appearing on behalf of the

complainant/opposite party, submitted as follows. The explanation provided

with Section 144(2) of the Negotiable Instruments Act conceptualised a

position where if a cheque was delivered for collection at a branch of the

bank of the payee or the holder in due course, then the cheque shall be

deemed to have been delivered to the branch of the bank in which the payee

or the holder in due course, as the case may be, maintained the account.

The phrase "where a cheque is delivered for collection at any branch of the

Bank of the payee..." indicated that the cheques could be collected by the

payee's bank for the purpose of its encashment. The moot point was that

after its collection, the presentment/encashment shall be deemed to have

happened at the branch where the account of the payee was situated. For

example, a cheque might be collected at any place/collection point/branch

of the payee. But, for the purpose of the jurisdiction of the Court with

respect to penal consequences as envisaged under Section 138 of the Act,

the branch of the bank in which the payee had an account shall become the

determining factor. On this, one had to revert to the Statements of Objects

and Reasons which clearly envisaged the concept of "payable at par"

cheques and "Cheque Truncation System (CTS)". The same process of CTS

for clearance of cheques was undertaken when the accounted cheque was

deposited at a kiosk of a bank in which the payee or the holder in due

course maintained an account. Therefore, in such cases the territorial

jurisdiction of the Court ought to be covered by Clause (a) of Sub-section (2)

of Section 142 of the Negotiable Instruments Act. To give an example, a

bearer cheque presented for payment over the counter would be governed by

Clause (b) of Sub-section (2) of Section 142 of the Act. It was pertinent to

submit that although a kiosk was not a branch of a bank or a banking

outlet, it was, nevertheless, a customer service point which produced all

services of a bank and therefore, a cheque could be deposited at a kiosk

which would go through the counter of the payee where the payment was

made. Rationalisation of Branch Authorisation Policy- Revision of Guidelines

dated 18.05.2017 of the Reserve Bank of India specifically defined a banking

outlet and also excluded kiosks from the meaning of a banking outlet. Even

a literal interpretation of statute would not militate against the proposition

that presentment of cheque before a bank kiosk would be considered to be a

delivery for collection through an account as per Clause (b) of Section 142(2)

of the Negotiable Instruments Act. In the present case, the Golden Rule of

interpretation could also be invoked. If the Literal Rule produced an

absurdity, then the Court should look for another meaning of the words to

avoid an absurd result. Therefore, the learned Trial Magistrate was well

within its jurisdiction to take cognizance of the offence and proceed with the

matter. Now, so far as the question of enquiry under Section 202 of the Code

was concerned, the learned Trial Magistrate had clearly gone through the

evidence and other documents before issuing process. Therefore, there was

a substantial compliance of the mandate of an enquiry as contemplated

under Section 202 of the Code.

6. I heard the learned counsels appearing on behalf of the parties and

perused the revision petition, the affidavits and the written notes filed.

Whether depositing a cheque at a kiosk of a bank amounts to delivery

through an account:

7. Sub-section (2) of Section 142 of the Negotiable Instruments Act

defines the territorial jurisdiction in respect of an offence under Section 138

of the said Act as under:

".......

(2) The offence under Section 138 shall be inquired into and tried only

by a Court within whose local jurisdiction-

(a) If the cheque is delivered for collection through an account, the

branch of the bank where the payee or holder in due course, as the

case may be, maintains the account, is situated;

Or

(b) If the cheque is presented for payment by the payee or holder in due

course, otherwise through an account, the branch of the drawee bank

where the drawer maintains the account, is situated.

Explanation.- For the purposes of clause (a), where a cheque is

delivered for collection at any branch of the bank of the payee or holder

in due course, then, the cheque shall be deemed to have been delivered

to the branch of the bank in which the payee or holder in due course, as

the case may be, maintains the account."

8. A bearer cheque is an example of a cheque presented for payment by a

payee or a holder in due course, otherwise through an account.

9. As is evident from the Rationalisation of Branch Authorisation Policy-

Revision of Guidelines dated 18.05.2017 of the Reserve Bank of India, a

kiosk does not fall within the meaning of a banking outlet.

10. However, delivery of a cheque at a kiosk of a bank for collection is

quite clearly not the same as presentation of a cheque over the counter or

otherwise than through an account. A particular procedure is followed if a

cheque is presented for payment otherwise through an account. But, in the

event a cheque is presented at a kiosk of a bank, the same is sent to the

concerned branch and undergoes the same process that a cheque presented

through an account would undergo. A kiosk is, thus, more like an

intermediate means of transmission by which a cheque is sent to the

account of the payee for further processing. The only difference is that in

such cases, the payee or the holder in due course, is not carrying the

cheque physically to the branch of the bank and is presenting it for payment

through the said account, but the movement of the payee or the holder in

due course, physically to the bank branch is dispensed with. Instead, once

the cheque is deposited at a kiosk, the bank authorities themselves arrange

to have it brought to the branch for processing through the account itself.

11. Therefore, depositing a cheque at the kiosk of the bank has all the

traits of presentation of a cheque by a payee or the holder in due course,

through his bank account and, therefore, is to be governed by Clause (a) of

Sub-section (2) of Section 142 of the Negotiable Instruments Act. Any other

interpretation would be utterly fallacious and would result in absurdity.

12. This is a case where a literal construction of the relevant statutory

provision is sufficient and there is no need to invoke the Golden Rule.

13. As would be evident from the evidence on affidavit filed on behalf of

the complainant, the payee held an account with the Kotak Mahindra Bank,

Ideal Plaza Branch, Kolkata-700020. The cheque purportedly went to the

said account after delivery at the kiosk. This imparted the jurisdiction to the

learned Trial Court to try the case.

14. Since the payee's bank, in the present case, falls within the territorial

jurisdiction of the learned Trial Court, there is no illegality in the impugned

proceeding at least so far as the question of territorial jurisdiction is

concerned.

15. Thus, the challenge to the impugned proceeding on the ground of lack

of territorial jurisdiction is rejected.

Compliance of mandatory enquiry under Section 202 of the Code:

16. By an order dated 28.03.2019, the learned Trial Court held as under:

"Today is fixed for S.A. The complainant is present.

The complainant is examined on S.A. He files written affidavit in

support of the solemn affirmation. Relevant documents are filed on

behalf of the complainant in form of Xerox.

Perused the petition of the complaint, the documents filed herein, the

evidence on S.A. and the written affidavit. It appears to me that there

is sufficient ground to proceed against the accused person for the

offence u/s 138/141 of N.I. Act. Hence I am inclined to issue process

against the accused person.

Issue summons against the accused person. Requisites at once.

To 09.07.2019 for S/R and appearance."

17. At the time this order was passed by the learned Trial Court, the law

here regarding conducting enquiry under Section 202 of the Code if the

accused resided beyond the territorial jurisdiction in respect of cases under

the Negotiable Instruments Act was governed by the ratio laid down by a

Division Bench of this Court in S.S. Binu vs. State of West Bengal & Anr.,

2018 CrLJ 3769. In that case, among other things, this Court had held that

conducting such enquiry under Section 202 of the Code was not mandatory

in respect of a proceeding under the Negotiable Instruments Act.

18. Thus, it was sufficient then if the learned Trial Court did not conduct

an enquiry as contemplated under Section 202 of the Code or simply went

through the initial deposition and the documents submitted in order to

proceed further by issuance of process without keeping the requirement of

an inquiry in mind.

19. However, the law regarding mandatory enquiry under Section 202 of

the Code even in a proceeding under the Negotiable Instruments Act has

undergone a sea change. In Re: expeditious trial of cases under Section 138

of the Negotiable Instruments Act, AIR 2021 SC 1957, a Constitution Bench

of the Hon'ble Supreme Court, inter alia, held as follows:

"24. The upshot of the above discussion leads us to the following

conclusions:

................

2) Inquiry shall be conducted on receipt of complaints under Section

138 of the Act to arrive at sufficient grounds to proceed against the

accused, when such accused resides beyond the territorial jurisdiction

of the Court.

3) For the conduct of inquiry under Section 202 of the Code, evidence

of witnesses on behalf of the complainant shall be permitted to be

taken on affidavit. In suitable cases, the Magistrate can restrict the

inquiry to examination of documents without insisting for examination

of witnesses.

..................."

20. In view of this decision, this Court in Sheetal Amit Patil vs. The State

of West Bengal, MANU/WB/0397/2021 held as follows:

"Therefore, as the law requires that an enquiry be held under Section

202 of the Code if the accused stayed outside the Court's jurisdiction,

such enquiry has to be undertaken in clear terms and the Learned

Trial Court, after making such enquiry whether by taking evidence on

affidavit or by restricting the enquiry to examination of documents or

not, is required to decide whether there are sufficient grounds to issue

process against the accused. In the present case, the learned Trial

Court did not do so. In view of the same, the order issuing process

and the subsequent orders passed by the learned Trial Court in the

present case ought to be set aside and the matter remanded back so

that the learned Trial Court can proceed afresh from the stage of

enquiry under Section 202 of the Code."