M/S B.B.C.Shipping & Ship ... vs Govt. Of Nct Of Delhi & Ors.
2009 Latest Caselaw 439 Del

*    IN THE HIGH COURT OF DELHI AT NEW DELHI

+                        Crl. M.(C ) No. 1476/2007

                          Judgment reserved on: September 01, 2008
                          Judgment delivered on: 09.02.2009
%

M/s B.B.C.Shipping & Ship Building and Others
                                         ...... Petitioner.
               Through: Mr. V.P. Singh and Mr. Nitin
               Sharma, Advocates for petitioners.

                         versus


Govt. of NCT of Delhi & Others    ..... Respondent
            Through: Mr. Amit Khenka with Mr. A.K. Siras,
            Advocates.

CORAM:
HON'BLE MR. JUSTICE KAILASH GAMBHIR

1.     Whether the Reporters of local papers may
       be allowed to see the judgment?           Yes

2.     To be referred to Reporter or not?             Yes

3.     Whether the judgment should be reported
       in the Digest?                          Yes

KAILASH GAMBHIR, J.

*

1. By way of this petition filed under Section 482 Cr.

P.C. the petitioners seek quashing of complaint case No.

678/2004 pending in the court of Sh. Sanjeev Jain Ld. ACMM

Karkardooma Courts, Delhi .

2. Abrigedly stated the counsel for the petitioner has

confined his arguments with regard to the maintainability of

the complaint case filed by respondent No.2 in Karkardooma

Courts due to the lack of territorial jurisdiction and

accordingly the arguments were addressed by both the

counsel within the confines of said issue of jurisdiction alone.

The facts of the case are as under:-

3. The case of the respondent complainant in brief is

that it entered into an Agreement dated 28.2.2003 with the

petitioner No.1/company whereby it had undertaken to

construct various types of houses in the township of Ship

Repairing Complex at Paradip (Orissa), in pursuance of which

the respondent No.2/company had deposited a sum of

Rs.1,80,00,000/- as earnest money with the petitioner

No.1/company at New Delhi on 28.10.2003. It is further the

case of the respondent No.2/company that the petitioner

No.1/company could not mobilize its resources leading the

respondent No.2/company to write a letter dated 20.11.2003

cancelling the aforementioned Agreement and requesting the

petitioner No.1/company to return the sum of

Rs.1,80,00,000/- paid by it as earnest money. As put in by

the respondent No.2/company, the petitioner No.1/company

gave two cheques drawn on Federal bank both dated

22.11.2003, i.e. cheque No. 535407 for the sum of

Rs.1,00,00,000/- and cheque No. 535408 for the sum of

Rs.84,00,000/- towards the refund of the earnest money and

the interest as agreed to between the parties. It is further

the case of the respondent No.2/company that it was shocked

to have received the letter dated 23.2.2004 from the lawyers

of the petitioner No.1/company addressed to the petitioner

No.1/company whereby the respondent No.2/company came

to know that the petitioner No.1/company has instituted a

suit in Calcutta Civil Court in respect of the aforesaid

cheques amounting to Rs.1,84,00,000/-. Being thus informed,

the respondent No.2/company caused its appearance in the

court of the learned Civil Judge, Calcutta, who directed the

petitioner No.1/company to furnish all the papers/documents

relating to the case of the respondent No.2/company but

which direction has not been followed. As per the

respondent No.1/company, it sent both the cheques for

collection, through its bankers in Delhi but the same returned

dishonoured by the bankers of the petitioner No.1/company

namely Federal Bank, Shakespere Sarani, Calcutta with its

memo dated 16.03.2004 stating that the payment stopped by

the drawer owing to the case pending at Alipore Court.

According to the respondent No.2/company, such an

endorsement on the returning memo dated 16.03.2004 by the

Federal Bank was malafide and was done at the instance of

the petitioner No.1/company. Being, under such an

impression, the respondent No.2/company wrote letter dated

4.4.2004 to the Federal Bank seeking clarification of its

remarks on the Memo dated 16.3.2004 but there was no

response from the Bank. After the service of the statutory

notice as per the provisions of Section 138 of the Negotiable

Instruments Act and other formalities, the respondent

No.2/company instituted a complaint u/s 138 of the

Negotiable Instrument Act in the court of the learned

Aditional Chief Metropolitan Magistrate, Karkardooma

Courts, Delhi which resulted in the orders dated 12.5.2004

which is assailed herein.

4. Mr. V.P. Singh, counsel appearing for the

petitioners contended that there was no justification

whatsoever for the respondent company to have instituted its

complaint in the court of the learned ACMM Karkardooma

Courts, Delhi because none of the acts as contemplated for

conferring the jurisdiction in the court has been done or

performed within the jurisdiction of Karkardooma courts.

Admittedly, the respondent company has its registered office

at Kalkaji, New Delhi; the bank of the respondent

No.2/company is situated at Nehru Place, New Delhi and

therefore, only the courts situated at Patiala House, New

Delhi could have entertained the complaint of the respondent

No.2/company. However, as would appear from para 15 of

the complaint, the respondent company chose the jurisdiction

of the Karkardooma Courts only because the notice as

envisaged u/s 138 of the Negotiable Instruments Act was

posted from the Post Office situated within the jurisdiction of

Karkardooma Courts. This by itself was not enough for the

court of the learned ACMM to have assumed jurisdiction to

entertain the complaint and later issue the process against

the petitioners, rather the learned ACMM ought to have

returned the complaint to the respondent company under

Section 201 Cr.P..C. for presentation to the Court having

jurisdiction in the matter which, in the present case, vests

with the Patiala House Courts. It has been held in

Hongkong & Shanghai Banking Corporation vs Manas

Satpathy 2005 (2) JCC (NI) 148 by this Court that

jurisdiction cannot be self-created to initiate a complaint u/s

138 of the Negotiable Instruments Act.

5. The counsel also submitted that perusal of the

notice of demand dated 4.4.2004 sent u/s 138 of the

Negotiable Instruments Act shows that the said notice was

sent by S.N. Gupta & Company, Advocates, for the

respondent No. 2 on behalf of the respondent. All their

offices are situated in New Delhi excepting chamber no. 138,

Civil Wing Tis Hazari Courts, Delhi. There was no earthly

reason for M/s S.N. Gupta & Company. Advocates to have

posted the said notice from a post office situated within the

jurisdiction of Karkardooma Courts. This subterfuge ought to

have cautioned the learned ACMM Karkardooma courts,

Delhi to return the complaint u/s 201 of the Cr.P.C. for its

presentation in Patiala House courts, or any other court

having jurisdiction in the matter. The assumption of

jurisdiction by the Karkardooma courts, is thus shrouded in

mystery and this, by itself, is enough to quash the complaint.

6. I have heard counsel for the parties at

considerable length and have gone through the record.

Similar issues came up for consideration before the Court of

HMJ H.R. Malhotra, in the case of Manas Satpathy (Supra)

and therein it was held that merely posting a legal notice

from Krishna Nagar which falls within the jurisdiction of

Karkardooma Courts would not give right to the petitioner to

file a criminal case in that area. Confirming the order of the

Metropolitan Magistrate the Court held that the Metropolitan

Magistrate rightly dismissed the complaint on jurisdiction

aspect as the complaint was filed contrary to the provisions

of Section 177 and 178 of the Cr.P.C. In the facts of the

present case also the respondent No.2 who is a drawee/payee

of the cheque has its registered office at New Delhi while

the office of the drawer i.e. the appellant herein is in

Calcutta. Both the dishonoured cheques in question were

issued by the appellant from their office at Calcutta and both

the cheques were drawn on Federal Bank Limited, Calcutta.

The respondent complainant whose registered office was in

New Delhi presented the said cheques with their bankers at

New Delhi and were returned with the remarks "payment

stopped by the drawer". Due to the dishonor of the cheques

the respondent No.2 got served legal notice of demand dated

4.4.2004 and this legal notice which is the bone of contention

between the parties sent by the lawyer was dispatched from

the post office located within the jurisdiction of Karkardooma

Courts. Based on the place of dispatch of legal notice the

complainant/respondentNo.2 filed the complaint at

Karkardooma Courts. The crucial question which now arises

is to decide the issue of jurisdiction i.e. whether the place of

dispatch of legal notice or the place of office of the lawyer

can confer the jurisdiction to a criminal court under Section

138 N.I. Act.

7. Territorial Jurisdiction of a Criminal Court in the

case under the Negotiable Instruments Act was directly in

issue in the judgment of the Supreme Court in K. Bhaskaran

v. Sankaran Vaidhyan Balan- (1999) 7 SCC 510 wherein

the law on the subject is laid down in the following terms:--

14. The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. The 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 five different localities. But a 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:

"178. (a)-(c) * * *

(d) 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 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. Thus clearly in view of law laid down by the

Supreme Court in Bhaskaran's case, the courts at 5

different locations can have the territorial jurisdiction to

entertain a complaint under Section 138 of the NI Act. But

the practice of filing the complaint at courts situated in

different locations in respect of cheques forming part of same

transaction has to be deprecated.

9. The Apex Court in M/s. Prem Chand Vijay Kumar v.

Yash Pal Singh, reported in 2005 All MR (Cri) 2029

(SC), followed in Musaraf Hossain Khan v. Bhagheeratha

Engg. Ltd., reported in MANU/SC/8067/2006, further re-

stated the basic ingredients which are necessary to lodge

complaint Under Section 138 of the Negotiable Instruments

Act. Those are as under:

9. In a generic and wide sense (as in Section 20 of the Civil Procedure Code, 1908 (in short 'CPC') "cause of action" means every fact which it is necessary to establish to support a right or obtain a judgment. Viewed in that context, the following facts are required to be proved to successfully prosecute the drawer for an offence under Section 138 of the Act:

(a) that the cheque was drawn for payment of an amount of money for discharge of a debt/liability and the cheque was dishonoured;

(b) that the cheque was presented within the prescribed period;

(c) that the payee made a demand for payment of the money by giving a notice in writing to the drawer within the stipulated period: and

(d) that the drawer failed to make the payment within 15 days of the receipt of the notice.

Proceedings on the basis of the generic meaning of the term "cause of action," certainly each of the above facts would constitute a part of the

cause of action but Clause (b) of Section 142 gives it a restrictive meaning, in that, it refers to only one fact which will give rise to the cause of action and that is the failure to make the payment within 15 days from the date of the receipt of the notice. A combined reading of Sections 138 and 142 makes it clear that cause of action is to be reckoned accordingly. The combined reading of the above two sections of the Act leaves no room for doubt that cause of action within the meaning of Section 142(c) arises and can arise only once.

10. In view of above undisputed position of facts and law,

the cause of action as contemplated in Section 142 of the

Negotiable Instruments Act, would certainly arise at a place

where the drawer fails to make payment of the cheque. The

registered office of the respondent complainant is at Kalkaji

and the cheques were presented by the complainant at the

bank situated at Nehru Place within the jurisdiction of Patiala

House. Mere dispatch of demand notice from a post office

under the jurisdiction of Karkardoom Courts, considering the

scheme of N.I. Act, and in the facts and circumstances of the

case, cannot give jurisdiction to the Court at Karkardooma,

since, the bank where the cheques were presented is situated

within the jurisdiction of the Patiala House Courts.

11. Admittedly, in the instant case, the basic transaction

took place at Calcutta. The cheques were issued at Calcutta.

The same were presented for collection at New Delhi at

Nehru Place. The Federal Bank from Calcutta had endorsed

and returned the cheques at Calcutta for want of money.

Taking into account above facts and the settled legal position,

a complaint in the above circumstances should have been

filed at Patiala House Court and not at Karkardooma Court.

The offence in question has been committed at Nehru Place,

Delhi at which place the cheques were presented and

returned dishonoured and also at Kalkaji where the registered

office of the respondent is located from which place the

demand was raised. Both these places i.e. Nehru Place and

Kalkaji falls within the jurisdiction of Patiala House Courts as

on date.

12. The contention as raised by the learned Counsel for the

petitioner that the above Judgment of the Apex Court in K.

Bhaskaran AIR 1999 SC 3762 (supra) supports his case to

this extent that giving of notice in writing to the drawer of the

cheques demanding payment of the cheques amount and

failure of the drawer to make payment within 15 days from

the notice gives cause of action only at Karkardooma Court

Delhi is without any substance or force. The Apex Court in K.

Bhaskaran and M/s. Prem Chand (supra) refers to the

basic ingredients which are necessary for an offence under

Section 138 of the Act. There is no dispute about this that all

these ingredients are necessary. We are concerned with the

cause of action in the present matters. The demand notice is a

must. But a place of issuance of notice cannot be said to be

determinative feature to decide the jurisdiction for filing a

complaint under Section 138 of N.I. Act. The notice was

though sent from Delhi, but received at Calcutta. The party

failed to make the payment as per notice. Therefore, issuance

of notice from Delhi itself cannot give cause of action to file

complaint at Delhi. The object of issuing notice as observed by

the Apex Court in Rajneesh Aggarwal v. Amit J. Bhalla,

reported in MANU/SC/1462/2001 is as under:

"Mere dishonour of a cheque would not raise to a cause of action unless the payee makes a

demand in writing to the drawer of the cheque for the payment and the drawer fails to make the payment of the said amount of money to the payee. The object of issuing notice indicating the factum of dishonour of the cheques is to give an opportunity to the drawer to make the payment within 15 days, so that it will not be necessary for the payee to proceed against in any criminal action, even though the bank dishonoured the cheques."

13. Furthermore, the Supreme Court in K. Bhaskaran

(supra) considered as to what are the various causes of

action in a case under Section 138 of the Act to give

territorial jurisdiction to a court. In para 11 of the judgment

the Supreme Court held as under:

"11. We fail to comprehend as to how the trial court could have found so regarding the jurisdiction question. Under Section 177 of the Code "every offence shall ordinarily be inquired into and tried in a court within whose jurisdiction it was committed". The locality where the bank (which dishonoured the cheque) is situated cannot be regarded as the sole criterion to determine the place of offence. It must be remembered that offence under Section 138 would not be completed with the dishonour of the cheque. It attains completion only with the failure of the drawer of the cheque to pay the cheque amount within the expiry of 15 days mentioned in Clause (c) of the proviso to Section 138 of the act. It is normally difficult to fix up a particular locality as the place of failure to pay the amount covered by the cheque. A place, for that purpose,

would depend upon a variety of factors. It can either be at the place where the drawer resides or at the place where the payee resides or at the place where either of them carries on business. Hence, the difficulty to fix up any particular locality as the place of occurrence for the offence under Section 138 of the Act."

14. From the discussions in the foregoing paragraphs the

position that emerges is that the venue of enquiry or trial has

primarily to be determined by the averments contained in the

complaint. If on the basis of such averments the Court has

jurisdiction, it has to proceed with the complaint. From the

law laid down in the aforementioned judgment it is crystal

clear that the cause of action for filing a complaint under

Section 138 of the Act may also be at a place where the

drawer of the cheque resided or the place where the payee

resided or the place where either of them carried on business

or the place where payment was to be made. But It is also

manifest that any one of the five conditions enumerated by

their Lordships in K. Bhaskaran's case, may not by itself

invariably clinch the issue while deciding the question of

jurisdiction. That question has to be decided keeping in view

the entire sequence of events starting from issuance of the

cheque in the ultimate culmination of refusal to pay. In any

event of the matter the place of posting of a demand notice

cannot determine the place of jurisdiction. One may post a

demand notice from a place where none of the situations

forming part of cause of action may arise as envisaged under

Section 138 and Section 142 of the Negotiable Instruments

Act. But can it be said that merely a demand notice was

posted from a particular place, the same by itself would

became a relevant factor to determine the place of

jurisdiction. The answer is simply no.

15. Undoubtedly, Sections 177 to 182 in Chapter XIII, Code

of Criminal Procedure, also cannot be overlooked. The

ingredients of the offence punishable under Section 138 of

the Act being such, it has to be borne in mind that one of the

several acts leading to the commission of the offence will not

take away the jurisdiction of the court within the territory of

which the majority of the acts have been perpetrated. Section

178(d) of the Code has to be read in the backdrop of the

peculiar nature of the offence punishable under Section 138.

The observations of the Hon'ble Apex Court in K.

Bhaskaran's case (supra) have to be read and understood

in that context. In that view of the matter, the respondent-

complainant in this case may not be able to draw any support

from the above decision of the apex court.

16. The other facet is the convenience of the parties. In

such matters whenever there is a contest and trial is

necessary, it is in the interest of all that the place where such

cheque is issued, presented and dishonoured should be the

place for detail enquiry and adjudication of all the issues. In

such matters basic parties including witnesses are definitely

need to play relevant role during the trial. The convenience

of all the parties, in the facts and circumstances of the case

and considering the scheme is also important facet that goes

to support the case of the petitioner that the complaint ought

to have been filed at Patiala House Court and not at

Karkardooma Court.

17. Having regard to the entire facts and circumstances of

the case on hand, I am satisfied that the complainant is not

entitled to institute the complaint before the Karkardooma

court at Delhi. It may not be just or proper to allow the

complainant to prosecute the petitioner/accused before the

Karkardooma Court at Delhi solely for the reason that the

statutory demand notice was posted from a post office within

the jurisdiction of the Karkardooma Courts. In my view, the

method adopted by the complainant is clearly intended to

harass the petitioner. This cannot be permitted.

18 . Before I conclude the important aspect which both

the counsel did not argue is that as on date Delhi

constitutes to be one Sessions Division. Since, Delhi

constitutes to be one Metropolitan area Under Section 8 of

Criminal Procedure Code headed by one District & Sessions

Judge and one Chief Metropolitan Magistrate and no

separate Sessions Divisions have so far been created by

bringing an amendment to Section 8 of Cr.P.C., therefore, it

is apparent that the present division of the Sessions Courts is

by way of administrative instructions. In view of this

position, it would be travesty of justice if the proceedings

which have already taken place before Karkardooma Court

are set aside for de novo trial of the case, besides, such a

course will result in causing further delay in the matter. In

the light of the above position, I am not in agreement with

the counsel for the petitioner that after transfer of the case

to Patiala House Courts, the trial of the case should

commence afresh.

19. Therefore, the court below is directed to transfer the

complaint to the ACMM, Patiala House Court so as to place

the same before the concerned Court having jurisdiction over

the matter.

20. In view of the above discussion, the petition is allowed

to the above extent. It is made clear that the proceedings at

the Patiala House Court shall continue from the stage at

which it was before the Karkardooma Courts. It is made clear

that I have not considered the merit of any of the other

contentions raised by the parties. Parties are directed to

appear before the Karkardooma Court for appropriate

directions on __________.

21. With these directions, the petition is disposed of.

February 09, 2009                  KAILASH GAMBHIR, J.