Lok Housing & Constructions Ltd. ... vs Times Guaranty Ltd. And Anr.
2002 Latest Caselaw 1041 Del

JUDGMENT

S.K. Agarwal, J.

1. This revision petition under Section 397(1) of the Code of Criminal Procedure (for short 'Cr.P.C.") is directed against the order dated 20th February, 2002 passed by the court of Metropolitan Magistrate, New Delhi dismissing the application of petitioners for recalling the summoning order under Section 138/141 of Negotiable Instruments Act, 1881 (for short "N.I. Act)" on the complaint filed by respondent No. 1.

2. Facts in brief are that M/s. Times Guaranty Ltd. (respondent No. 1) filed a complaint against petitioners under Sections 138/141/142 of N.I. Act read with Sections 420/120B/34 IPC alleging therein that they have a branch officer at New Delhi; accused No. 1 is a company, and accused Nos. 2 to 4 are the Managing Director, General Manager, Vice-President who are in charge and responsible for the conduct of its business. The accused company took some machinery on hire/purchase basis and agreed to repay the amount of the hire money in Installments along with interest and incidental charges, as per the terms and conditions of the agreement. In order to fulfill their contractual obligations, accused persons issued cheque No. 695142 dated 9.6.1999 for Rs. 8,01,981/- drawn on Union Bank of India, (for short 'UBI') Small Scale Industries Branch, Andheri (East) Mumbai guaranteeing inter-alia payment of hire money Installment payable to the complainant. The cheque in question when presented for clearance by the complainant through its bankers was returned un-paid vide memo dated 26th June, 1999 with the remark 'referred to drawer'. The said cheque along with returning memo was received by the complainant on 28th June, 1999. The cheque was dishonoured as the accused did not have sufficient amount in the account. Despite service of legal notice and expiry of statutory period of notice prescribed under the N.I. Act, the accused did not make payment. It was further submitted that respondents 2 to 4 are deemed to have committed offences punishable under Sections 138/141 read with Section 142 of N.I. Act as well as under the other Sections noticed above. It was also pleaded that the accused knew very well that the cheque would be dishonoured upon presentation and with mala fide intention to cheat, falsely represented and induced the complainant to part with its goods and issued post dated cheque which was dishonoured upon presentation. After the preliminary evidence, on 5th March, 2001 the learned trial court found that prima facie case is made out against the petitioners and they were summoned.

3. The petitioners did not appear and non-bailable warrants against them were issued. On 2nd December, 2001 petitioner moved an application for recalling the order of summoning submitting that the Courts at Delhi have no jurisdiction to try the complaint. By the impugned order the application was dismissed.

4. I have heard the learned counsel for the petitioners as well as respondents and have been taken through the record.

5. Learned counsel for the petitioners argued that as per the hire/purchase agreement entire transaction had taken place at Mumbai; the cheques were signed at Mumbai; the loan was advanced by the complainant company to M/s. Scan Organics Ltd. in Mumbai for purchase on certain machinery which was given to (accused No. 1) in Mumbai under the hire/purchase agreement; that out of 20 cheques, four cheques were deposited by the complainant in Mumbai and were honoured. Six cheques amounting to Rs. 46,84,000/- were adjusted. The cheques due on 15th September, 1997 and 15th December, 1997 were presented at Mumbai and they were again re-presented in Delhi. The filing of the case at New Delhi is mala fide and an abuse of the process of the court. While placing reliance on Shri Issar Alloy Steels Ltd. v. Jayaswals Neco Ltd., 2001 CRI.L.J. 1250, he argued that the presentation of the cheques to "the bank" only means to the bank of drawer; that the interpretation of the word "bank" used in Clause (b) of Section 138 N.I. Act clearly lays down the criteria for the purpose of jurisdiction. It is the place where the cheque was dishonoured, and not the place where it was given to the banker of the drawee for collection which determines jurisdiction. The banker of the drawee can be anywhere in India, where the banker of the drawer has got a definite place, on which the cheque has been drawn by the drawer (accused No. 1). He further argued that giving of the notice is not the same thing as the receipt of notice. It is for the payee to send notice to the drawer at the correct address. Once the notice reaches the correct address, whether it is claimed or not by the drawee of the cheque, the cause of action arises, if the payment is not made within 15 days of the date of receipt of notice, then a criminal complaint can be filed within one month, after expiry of the notice period of 15 days. He argued that the cause of action had partly arisen at the UBI at Mumbai on which the cheque was drawn by accused No. 1, and when the same was dishonoured by the UBI at Mumbai; and that notices of dishonouring of the cheques were received at Mumbai and finally the payment was to be made to the complainant at its registered office at Mumbai. Therefore, presentation of the cheques in Delhi for collection was mala fide and is without jurisdiction. In support of his submission reliance was placed on the decision of this court in R.K. Jain v. State and Ors. 1988(1) Crimes 514, K. Bhaskaran v. Sankaran Vaidhyan Balan and Anr. 1999(6) Scale 272 Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd. 2001 CRI.L.J. 1250. Learned counsel for the respondents argued to the contrary.

6. I have considered the rival contentions. I am unable to agree with the counsel for the petitioners.

7. Law in this regard is settled by the Supreme Court in K. Bhaskaran v. Sankaran Vaidhyan Balan and Anr. 1999(6) Scale 272. The Supreme court has laid down that the offence under Section 138 of N.I. Act is complete only on the concatenation of five acts, which are components of the offence. These are drawing of cheque, presentation of cheque, returning of the cheque un-paid by the drawee bank, giving notice in writing to the drawer demanding payment of the cheque and failure of the drawer to make payment within 15 days of the receipt of the notice. It was further noticed that it is not necessary that all five acts should happen in the same locality; and it is possible that all five acts may have been done at five different localities. It was held that under Sub-clause (d) of Section 178 of Cr.P.C. which provides that where that where the offence consists of several acts done in different local areas, it may be enquired into or tried by a court having jurisdiction over any such local area. It was held:

"14. The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. Following are the acts which are components of the said offence : (1) Drawing of the cheque, (2) Presentation of the cheque to the bank, (3) Returning the cheque unpaid by the drawee bank, (4) Giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, (5) failure of the drawer to make payment within 15 days of the receipt of the notice.

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 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:

"Where the offence 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".

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".

8. In this case, as noticed above, Branch office of the petitioner company is in Delhi; the cheque in question was presented to the bank in Delhi and it was returned un-paid in Delhi; the notice to the petitioners was given from Delhi; the failure of the petitioners to pay the amount was in Delhi. Therefore, I have no hesitation in holding that part of the cause of action had arisen at Delhi, and the courts in Delhi have jurisdiction to try the complaint.

9. For the foregoing reasons, I find no merits in the petition and the same is dismissed. Trial court record be sent back forthwith. Trial court is directed to expedite the trial.