Gopal Mishra vs The State & Another
2010 Latest Caselaw 906 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

+                       Crl.M.C.1841/2009
%                       Date of Decision: 17th February, 2010

#     GOPAL MISHRA                        ..... Petitioner
!                 Through:         Mr.Harsh Khanna, Adv.

                        versus

$     THE STATE & ANOTHER                   ..... Respondents

^                  Through:         Mr.Pawan Behl, APP
                                    Mr.Sanjeev Singh for R-2.

*     CORAM:
      HON'BLE MR. JUSTICE V.K. JAIN


      1.    Whether the Reporters of local papers
            may be allowed to see the judgment?        No

      2.    To be referred to the Reporter or not?     No

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


: V.K. JAIN, J.(Oral)

1. This is a petition under Section 482 of the Code of

Criminal Procedure for quashing the complaint filed against

him under Section 138 of the Negotiable Instruments Act.

The petitioner is seeking quashing of the complaint and the

order of the learned Metropolitan Magistrate dated 1.6.2009,

whereby he was summoned, on the ground that Delhi Court

has no jurisdiction to entertain and try the complaint filed

against him.

2. There are five essential ingredients of offence under

Section 138 of the Negotiable Instruments Act, as held by the

Supreme Court in the case of "K.Bhaskaran Vs. Sankaran

VAidhyan Balan & Another", (1999) 7 SCC 510, (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.

3. This is not the case of the complainant that cheque in

question was issued and delivered to it in Delhi. There is no

such allegation to this effect in the complaint and during the

course of arguments also no such stand was taken by the

learned counsel for the complainant. It is an admitted case

that the petitioner is a resident of Jaipur and does not have

either a residence or a place of work in Delhi. It is an

admitted case that cheque in question was drawn on a bank

in Jaipur and was dishonoured by that bank at Jaipur. It is

also an admitted position that the notice of demand though

issued from Delhi was sent to the petitioner at Jaipur. This

is nowhere the case of the complainant that the notice of

demand was served upon the petitioner in Delhi.

4. The learned counsel for the complainant/respondent

No.2 claims jurisdiction of Delhi Court on the ground that the

notice of demand was issued from Delhi and issue of notice of

demand being an essential ingredient of the offence

punishable under Section 138 of Negotiable Instruments Act,

part of the offence under Section 138 of Negotiable

Instruments Act took place in Delhi.

5. The submission made by the learned counsel came up

for consideration before the Hon‟ble Supreme Court in

„Harman Electronics Private Limited and Anr. v. 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 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.

6. As regard, issue of notice from Delhi, Hon‟ble Supreme

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 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 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.

7. The following observations made by the Hon‟ble

Supreme Court in this case are pertinent:

"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, the commission of an offence completes."

8. In 'Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco

Ltd,' (2001) 3 SCC 609, the Hon‟ble Supreme Court inter-

alia, held that "The bank" referred to in clause (a) to the

proviso of Section 138 of the Act would mean the drawee

bank on which the cheque is drawn and not all the banks

where the cheque is presented for collection including the

bank of the payee, in whose favour the cheque is issued."

It was further observed that "the payee of the cheque has the

option to present the cheque in any bank including the

collecting bank where he has his account but to attract the

criminal liability of the drawer of the cheque such collecting

bank is obliged to present the cheque in the drawee or Payee

bank on which the cheque is drawn within the period of six

months from the date on which it is shown to have been

issued."

In para 10 of the judgment the Hon‟ble Supreme Court

further observed that "Sections 3, 72 and 138 of the Act would

leave no doubt in our mind that the law mandates the cheque

to be presented at the bank on which it is drawn if the drawer

is to be held criminally liable."

9. The ratio of the above referred judgment of the Hon‟ble

Supreme Court is that a cheque is deemed to have been

presented to the banker of the drawer irrespective of the fact

whether it is deposited by the payee in his own bank. The

banker of the payee, after receiving the cheque from him, is

required to present it to the banker of the drawer and

therefore if the cheque issued from a bank outside Delhi is

deposited in Delhi, the bank in which it is deposited in Delhi,

is required to present it to the bank outside Delhi, for the

purpose of encashment.

10. This issue has been examined by me in a number of

cases, including the WP.(Crl.).861/09, 884/09 & 885/09

decided on 8th February, 2010. After referring to the decision

of the Hon‟ble Supreme Court in the case of Herman

Electronics (supra), this Court, inter alia, held as under:

"Proviso (b) to Section 138 of Negotiable Instruments Act requires payee of the cheque or its holder in due course, as the case may be, to make a demand of the amount of the cheque by giving a written notice to the drawer of the cheque. The question which arises for consideration is as to whether the demand is made at the place where the drawer of the cheque resides or works for gain or it is made at the place from where the notice of demand is dispatched to the drawer of the cheque. Since the requirement of the proviso will not be fulfilled without service of notice upon the drawer and considering the decision of the Hon‟ble Supreme Court in the case of Harman Electronics (supra) holding therein that civil law principle that the debtor must seek the creditor does not apply to a criminal case, the demand shall be deemed to have been made at the place where the notice is served upon the drawer and not at the place from where it is dispatched to him. In fact in view of the decision in the case of Harman Electronics (supra), the notice shall be deemed to have been given at the place where it is served upon the addressee and not at the place from where it was dispatched."

11. The learned counsel for the complainant has relied

upon the decision of the Hon‟ble Supreme Court in

"C.C.Alavi Vs. Palapetty Muhammed & Another" , (2007)

6 SCC 555, in support of his contention that Delhi Court

would have jurisdiction if the notice of demand to the drawer

of the cheque is issued from Delhi. In my view, reliance on

the above referred decision of the Hon‟ble Supreme Court is

totally misplaced. In that case, the matter was referred to a

Three Judges Bench for consideration of the following issue:

"Whether in absence of any averments in the complaint to the effect that the accused had a role to play in the matter of non-receipt of legal notice, or that the accused deliberately avoided service of notice, the same could have been entertained keeping in view the decision of this Court in Vinod Shivappa‟s case?"

12. The Hon‟ble Supreme Court after considering the scope

of Section 114 of Evidence Act and Section 27 of General

Clauses Act and its earlier decisions in the case of "D.Vinod

Shivappa Vs. Nanda Belliappa" and in the case of

K.Bhaskaran(supra), inter alia, held as under:

"......When applied to communications sent by post, Section 114 enables the Court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. But the presumption that is raised under Section 27 of the G.C. Act is a far stronger presumption. Further, while Section 114 of Evidence Act refers to a general presumption, Section 27 refers to a specific presumption. For the sake of ready reference......

Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post in view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. This Court has already held that when a notice is sent by registered post and is returned with a postal endorsement „refused‟ or „not available in the house‟ or „house locked‟ or „shop closed‟ or „addressee not in station‟ due service has to be presumed................................................... ..............It is, therefore, manifest that in view of the presumption available under Section 27 of the Act, it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved.

Insofar as the question of disclosure of necessary particulars with regard to the issue of notice in terms of proviso (b) of Section 138 of the Act, in order to enable the Court to draw presumption or inference either under Section 27 of the G.C.Act or Section 114 of the Evidence Act is concerned, there is no material difference between the two provisions. In our opinion, therefore, when the notice is sent by registered post by correctly addressing the drawer of the

cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with........................

It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C.Act and Section 114 of the Evidence Act............"

13. Nowhere has the Hon‟ble Supreme Court held in the

above referred cases that issue of notice of demand from a

particular place by itself would give jurisdiction to the Court

at that place to hear and try a complaint filed under Section

138 of Negotiable Instruments Act on account of non-

compliance of the notice.

14. For the reasons given in the preceding paragraphs, I

am of the view that Delhi Court has no jurisdiction to

entertain and try this complaint. It is, therefore, directed that

the complaint filed by respondent No.2 be returned to it

within four weeks for presenting it before a competent court

having jurisdiction in the matter.

(V.K.JAIN) JUDGE FEBRFUARY 17, 2010 RS/