Delhi High Court
K.O.Issac & Anr vs State & Anr. on 21 October, 2009
Author: V. K. Jain
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: October 14, 2009
Pronounced on: October 21, 2009
+ (1) CRL.M.C. 1580/2009
+ (2) CRL.M.C. 1581/2009
+ (3) CRL.M.C. 1582/2009
+ (4) CRL.M.C. 1583/2009
+ (5) CRL.M.C. 1584/2009
+ (6) CRL.M.C. 1585/2009
+ (7) CRL.M.C. 1586/2009
# K.O.ISSAC & ANR ..... Appellant
! Through : Mr. Harshad V.Hameed,
Advocate
Versus
$ STATE & ANR. .....Respondent
^ Through: Mr. R.N.Vats, Addl.PP
Mr. Jayant K. Sud, Advocate with Mr.
Atul Sahi and Mr. Anupam Mishra,
Advocates
+ (8) CRL.M.C. 1844/2009
+ (9) CRL.M.C. 1845/2009
+ (10)CRL.M.C. 1846/2009
+ (11)CRL.M.C. 1847/2009
+ (12)CRL.M.C. 1848/2009
+ (13)CRL.M.C. 1849/2009
+ (14)CRL.M.C. 1850/2009
+ (15)CRL.M.C. 1851/2009
+ (16)CRL.M.C. 1852/2009
+ (17)CRL.M.C. 1853/2009
# K.O.ISSAC & ANR ..... Appellant
! Through : Mr. Harshad V.Hameed,
Advocate
Criminal M.C. No. 1580/2009, 1581/09, 1582/09, 1583/09, 1584/09, 1585/09, 1586/09, 1844/09, 1845/09, 1846/09,
1847/09, 1848/09, 1849/09, 1850/09, 1851/09, 1852/09 & 1853/09
Page 1 of 13
Versus
$ TECHNOLOGY DEVELOPMENT BOARD.....Respondent
^ Through: Mr. R.N.Vats, Addl.PP
Mr. Jayant K. Sud, Advocate with Mr.
Atul Sahi and Mr. Anupam Mishra,
Advocates
CORAM:
HON'BLE MR. JUSTICE V.K. JAIN
1. Whether Reporters of Local newspapers may be
allowed to see the Judgment?
2. To be referred to the Reporter or not?
3. Whether the Judgment should be reported in the
Digest?
V.K.Jain, J.
In these petitions under Section 482 of Code of
Criminal Procedure, the petitioners are seeking quashing of
the charge/notice framed against them under Section 251 of
the Code, on a complaint filed by the respondent no. 2 under
Section 138 of Negotiable Instruments Act. It has been
stated in the petition that M/s Samudra Bio Pharma (P) Ltd.
Formerly known as Shantha Marine Biotechnologies Pvt.Ltd.
(hereinafter referred as 'the Company') was granted loan
assistance of Rs. 350.00 lacs by respondent No. 2. On
account of financial difficulties, the company could not make
Criminal M.C. No. 1580/2009, 1581/09, 1582/09, 1583/09, 1584/09, 1585/09, 1586/09, 1844/09, 1845/09, 1846/09,
1847/09, 1848/09, 1849/09, 1850/09, 1851/09, 1852/09 & 1853/09
repayment of the loan taken by it and entered into a Deed of
Settlement, pursuant to which 48 Post Dated Cheques were
issued to Respondent no. 2. The cheques, when presented,
were dishonoured for want of funds. Complaints under
Section 138 of Negotiable Instrument Act were filed by
Respondent No. 2 at New Delhi against four persons
including the Company and the petitioners.
2. The case of the petitioners is that the court of
Metropolitan Magistrate at Delhi lacked jurisdiction to
entertain the complaint as no cause of action arose in Delhi.
It has also been stated that the complaint does not contain
any averment to show as to how the court at New Delhi had
jurisdiction to try the complaints.
3. The respondent No. 2 has opposed the petition. It has
been stated in the reply that petitioners were Incharge of day
to day affairs of the Company and therefore are liable to be
punished for dishonour of cheques in question. It has been
further stated in the reply that Delhi Court has jurisdiction to
entertain the complaint as (i) the Loan Agreement was
executed at Delhi; (ii) office of the complainant / respondent
is in Delhi; (iii) the cheques were issued and presented at
Delhi and (iv) the legal notice to the petitioner were sent
from Delhi.
Criminal M.C. No. 1580/2009, 1581/09, 1582/09, 1583/09, 1584/09, 1585/09, 1586/09, 1844/09, 1845/09, 1846/09,
1847/09, 1848/09, 1849/09, 1850/09, 1851/09, 1852/09 & 1853/09
4. Chapter XIII of the Code of Criminal Procedure deals
with jurisdiction of criminal court in inquiries and trials.
Section 177, provides that every offence shall ordinarily be
inquired into and tried by a court within whose local
jurisdiction it was committed. Section 178 of the Code, to
the extent it is relevant, provides that where an offence is
committed partly in one local area and partly in another or
where it constitutes several acts done in different local areas
it may be inquired into or tried by a court having jurisdiction
for one of the such local areas.
Section 179 of the Code provides that when an act is an
offence by reasons of anything which has been done and of a
consequence which has ensued, the offence may be inquired
into or tried by a Court within whose local jurisdiction such
thing has been done or such consequence has ensued.
5. There are five essentials of the offence u/s 138 of N.I.
Act (i) drawing of the cheque, (ii) presentation of the cheque
to the bank of the payee, (iii) return of the cheque unpaid by
the drawee bank, (iv) giving of notice to the drawer of the
cheque demanding payment of the cheque amount and (v)
failure of the drawer to make payment within 15 days of the
receipt of the notice. Therefore, in view of the provisions
Criminal M.C. No. 1580/2009, 1581/09, 1582/09, 1583/09, 1584/09, 1585/09, 1586/09, 1844/09, 1845/09, 1846/09,
1847/09, 1848/09, 1849/09, 1850/09, 1851/09, 1852/09 & 1853/09
contained in Section 178 (b) and (d) of the Code, if any of
these five acts, which collectively constitute office under
Section 138 of NI Act is committed in an area, the court
exercising jurisdiction over that area would be competent to
entertain and try the complaint under Section 138 of N.I. Act.
6. The question of jurisdiction in complaints u/s 138 of
Negotiable Instruments Act came up for consideration before
the Hon'ble Supreme Court in K. Bhaskaran Vs. Sankaran
Vaidhyan Balan and Another, (1999) 7 SCC 510, and the
Hon'ble Supreme Court, referring to the above referred five
components constituting offence u/s 138 of N.I. Act, held that
if these five different acts were done in five different
localities, one of the courts exercising jurisdiction in one of
the five local areas can become a place of trial for the offence
under Section 138 of N.I. Act and the complainant can
choose any one of those courts having jurisdiction over one of
those local areas where any of these five acts was done.
7. In Shamshad Begum vs. B. Mohammed (2008) 13 SCC
77, the respondent filed a complaint against the appellant at
Mangalore u/s 138 of Negotiable Instruments Act. Before
filing complaint, the respondent had issued a notice to the
appellant from Mangalore and a reply was sent by her to the
Criminal M.C. No. 1580/2009, 1581/09, 1582/09, 1583/09, 1584/09, 1585/09, 1586/09, 1844/09, 1845/09, 1846/09,
1847/09, 1848/09, 1849/09, 1850/09, 1851/09, 1852/09 & 1853/09
complainant at his Mangalore address. The appellant filed a
petition in Karnataka High Court u/s 482 of the Code of
Criminal Procedure, seeking quashing of the complaint on
the ground that since the agreement between the parties
was entered into at Bangalore and the cheques were
returned from the banks at Bangalore, only Bangalore court
had jurisdiction to try the case. The High Court having
dismissed the petition, the appellant came to the Supreme
Court by obtaining Special Leave. Relying upon its earlier
decision in K. Bhaskaran's case (Supra) and referring to the
five components enumerated in that decision, it was held that
it is not necessary that all the five acts should have been
perpetrated in the same locality and it was possible that each
of these acts could have been done at five different localities
though in-concatenation of all the above five is a sine qua
non for completion of the offence u/s 138 of the Act. The
appeal was, dismissed, thereby upholding the decision of the
High Court.
8. In Prem Chand Vijay Kumar v. Yashpal Singh (2005) 4
SCC 417, the Hon'ble Supreme Court held that for securing
conviction u/s 138 of Negotiable Instruments Act, the
following facts are required to be proved:-
Criminal M.C. No. 1580/2009, 1581/09, 1582/09, 1583/09, 1584/09, 1585/09, 1586/09, 1844/09, 1845/09, 1846/09,
1847/09, 1848/09, 1849/09, 1850/09, 1851/09, 1852/09 & 1853/09
(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.
9. This issue came up for consideration before the hon'ble
Supreme Court in a recent decision - Harman Electronics
Private Limited and Another Vs. National Panasonic India
Private Limited, (2009) 1 SCC 720. In that case, the
appellant was carrying business at Chandigarh. The
complainant had its head office at Delhi and a branch office
at Chandigarh. The cheque in question was issued,
presented and dishonoured at Chandigarh. The respondent /
complainant issued notice to the appellant from Delhi. The
notice was served upon the appellant at Chandigarh. On
failure of the appellant to pay the amount of the cheque, a
complaint was filed at Delhi. An application filed by the
Criminal M.C. No. 1580/2009, 1581/09, 1582/09, 1583/09, 1584/09, 1585/09, 1586/09, 1844/09, 1845/09, 1846/09,
1847/09, 1848/09, 1849/09, 1850/09, 1851/09, 1852/09 & 1853/09
appellant questioning jurisdiction of the court at New Delhi
was dismissed on the ground that since the notice was sent
by the complainant from Delhi, the appellant had failed to
make payment at Delhi and the respondent was carrying out
business at Delhi, the Delhi court had jurisdiction to
entertain the complaint.
The jurisdiction of the court at Delhi was claimed on
the ground that the cheque though deposited at Chandigarh,
they having been sent by Citi Bank N.A. for collection at
Delhi, the amount became payable at Delhi and the notice of
demand was sent from Delhi requiring the appellant to make
payment at Delhi. The Hon'ble Supreme Court noted that (i)
the complainant had a branch office at Chandigarh; (ii)
transactions were carried on only from Chandigarh; (iii)
cheques were issued and presented at Chandigarh and (iv)
dishonour of the cheques took place at Chandigarh. As
regard, issue of notice from Delhi, Hon'ble Court held that
issuance of notice would not by itself give rise to a cause of
action but communication of notice would give. The Hon'ble
Court was of the view that for constituting offence u/s 138 of
Negotiable Instruments Act, the notice must be received by
the accused, though it may be deemed to have been received
Criminal M.C. No. 1580/2009, 1581/09, 1582/09, 1583/09, 1584/09, 1585/09, 1586/09, 1844/09, 1845/09, 1846/09,
1847/09, 1848/09, 1849/09, 1850/09, 1851/09, 1852/09 & 1853/09
in certain situations. The Hon'ble Supreme Court also
referred to its own decision in Mosaraf Hossain Khan v.
Bhagheeratha Engg. Ltd. (2006) 3 SCC 658. In that case
respondent No.1 issued certain cheques to the appellant
from Ernakulam, which were deposited by him with Suri
Branch of the Bank. The respondent was also having an
office at Ernakulam. On return of the cheques, demand
notice was sent by the appellant to the respondents. On non-
payment, criminal complaint was filed by the appellant in the
court of the Chief Judicial Magistrate, Bir Bhum at Suri. It
was observed that sending of cheques from the Ernakulam or
the respondent having an offence at that place did not form
an integral part of the cause of action for which a complaint
petition was filed by the appellant and cognizance of the
offence u/s 138 of Negotiable Instruments Act was taken by
the Chief Judicial Magistrate, Suri. It was noted that while
issuance of notice by the holder of Negotiable Instrument is
necessary, service thereof is also imperative and only after
service of such notice and failure on the part of the accused
to pay the demanded amount, within a period of 15 days
thereafter, the commission of an offence completes and,
therefore, giving of notice cannot have precedence over the
service. The Hon'ble Court declined to apply the civil law
Criminal M.C. No. 1580/2009, 1581/09, 1582/09, 1583/09, 1584/09, 1585/09, 1586/09, 1844/09, 1845/09, 1846/09,
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Principle that the debtor must seek the creditor, to a criminal
case. Holding that jurisdiction in a criminal case is governed
by the provisions of Criminal Procedure Code and not on
common law principle, It was held that Delhi Court had no
jurisdiction to try the case.
10. In the present cases, it has been specifically alleged in
the reply filed by the respondent that (i) the entire
transaction took place at Delhi, (ii) the cheques were issued
at Delhi, and (iii) the cheques were present at Delhi.
Therefore, applying the provisions of Section 178 (b) & (d) of
the Code of Criminal Procedure, the court at Delhi has the
jurisdiction to entertain and try the complaints filed by the
respondent, as part of the cause of action arose in Delhi. The
decision of the Hon'ble Supreme Court in the case of Harman
Electronics Private Limited (Supra), where jurisdiction of
Delhi Court was claimed solely on account of notice of
demand having been sent from Delhi, therefore, has no
application to the present cases.
11. It was pointed out by the learned counsel for the
petitioners that there is no specific averment in the
complaint that the cheques issued by the petitioner were
issued and presented at Delhi, the only averment in the
Criminal M.C. No. 1580/2009, 1581/09, 1582/09, 1583/09, 1584/09, 1585/09, 1586/09, 1844/09, 1845/09, 1846/09,
1847/09, 1848/09, 1849/09, 1850/09, 1851/09, 1852/09 & 1853/09
complaint, conferring jurisdiction on the court at Delhi being
that the legal notice was sent to the accused from New Delhi
and the bankers of the complainant are also within the
jurisdiction of Delhi court. Obviously, when the complainant
stated that its bankers are also within the jurisdiction of
Delhi court, it was also meant to convey that the bank being
situated in Delhi, the cheques were also presented at Delhi.
If the bank of the complainant is situated in Delhi, the cheque
could not have been deposited elsewhere by the complainant.
This is not the case of the petitioner that cheques in question
were issued at a place other than Delhi or were not deposited
by the complainant/respondent at Delhi. In para (j) of the
petition, it has been stated that pursuant to respondent No.2
agreeing to a re-scheduling of a loan, the company entered
into a deed of settlement with it and was forced to issue 48
post-dated cheques. During the course of arguments, it was
stated on behalf of the complainant that since the deed of
settlement was executed at Delhi, the cheques were also
issued and delivered to the complainant/respondent at Delhi.
This factual averment was not disputed during the course of
arguments. This is not the case of the petitioners that
transaction between the parties took place at a place other
than Delhi or that the Settlement Deed was not executed in
Criminal M.C. No. 1580/2009, 1581/09, 1582/09, 1583/09, 1584/09, 1585/09, 1586/09, 1844/09, 1845/09, 1846/09,
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Delhi. It was also not disputed that the complainant has its
office only in Delhi. In any case, the disputed questions of
facts cannot be gone into in a petition u/s 482 of the Code of
Criminal Procedure and since the case of the complainant is
that the transaction between the parties took place at Delhi,
cheques in question were issued to it at Delhi and were
deposited by it at Delhi, such averments have to be taken as
correct for the purpose of this petition.
12. The judgment of this court in Delhi High Court Legal
Services Committee v. Govt. of NCT of Delhi; 163 (2009) DLT
56 does not have any application in these cases since that
judgment directs return of those complaints in which Delhi
Court does not have territorial jurisdiction to try the
complaint. A perusal of the judgment would show that the
petitioner in that case had sought return of those complaints
in which territorial jurisdiction of Delhi Courts was claimed
only on the ground that statutory notice after dishonour of
the cheque was issued from Delhi, though, the same was
communicated outside Delhi and further the cause of action
also accrued outside the territory of Delhi. The decision in
Delhi High Court Legal Services Committee's case (Supra)
applies only to those cases where the complainant invokes
Criminal M.C. No. 1580/2009, 1581/09, 1582/09, 1583/09, 1584/09, 1585/09, 1586/09, 1844/09, 1845/09, 1846/09,
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jurisdiction of Delhi Courts solely on the ground that notice
of demand was issued from Delhi despite the fact that it was
served outside Delhi. If the complainant claims jurisdiction
of Delhi Court on some other fact, which is one of the
essentials constituting offence under Section 138 of
Negotiable Instrument Act, that judgment would not apply,
and that complaint would not be liable to be returned to the
complainant for want of jurisdiction. If the transaction
between the parties took place in Delhi, cheques were issued
in Delhi and the same were deposited by the complainant /
respondent at Delhi, jurisdiction of Delhi Court to entertain
these complaints cannot be disputed.
For the reasons given in the preceding paragraphs, I do
not find any merit in the petitions and the same are hereby
dismissed. Stay order, if any, stands vacated. A copy of this
judgment be sent to concerned trial court.
(V.K. JAIN)
JUDGE
October 21, 2009
acm, sk
Criminal M.C. No. 1580/2009, 1581/09, 1582/09, 1583/09, 1584/09, 1585/09, 1586/09, 1844/09, 1845/09, 1846/09,
1847/09, 1848/09, 1849/09, 1850/09, 1851/09, 1852/09 & 1853/09
