G.E. Capital Transportation ... vs Rajendra Parihar
2011 Latest Caselaw 1988 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI

+             CRL.M.C. 2491/2009 & Crl.M.A. No.8424/2009

                                                 Decided on 06.04.2011
IN THE MATTER OF :

G.E. CAPITAL TRANSPORTATION FINANCIAL SERVICES LTD.
                                                    ..... Petitioner
                         Through: Ms. Worthing Kasar, Advs.

                     versus

RAJENDRA PARIHAR                       ..... Respondent
                          Through : None.


                               Through: None.

CORAM

* HON'BLE MS.JUSTICE HIMA KOHLI

     1. Whether Reporters of Local papers may         No
        be allowed to see the Judgment?

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

     3. Whether the judgment should be                No
        reported in the Digest?

HIMA KOHLI, J. (Oral)

1. The present petition is filed by the petitioner under Section

482 Cr.P.C. praying inter alia for quashing of order dated 10.7.2009

passed by the learned ASJ, dismissing the criminal revision petition

preferred by the petitioner against the order dated 20.3.2009 passed by

the learned Metropolitan Magistrate, whereunder the complaint preferred

by the petitioner under Section 138 of the Negotiable Instruments Act,

1881 (in short 'the Act') was dismissed by the trial court on the ground

of lack of territorial jurisdiction vested in Delhi courts to entertain and try

the complaint.

2. Vide order dated 20.3.2009, the learned Metropolitan

Magistrate returned the complaint of the petitioner for presentation of the

same before the court having territorial jurisdiction within one month, on

the ground that there was nothing in the complaint or the documents

annexed, which showed that any of the acts constituting the offence

under Section 138 of the Act had taken place in New Delhi, except for the

presentation of cheque for encashment and issuance of legal notice. The

learned Metropolitan Magistrate rejected the argument of the complainant

that presentation of the cheque at a service branch of the Drawee Bank

situated at Delhi would confer jurisdiction on the courts at Delhi. It was

observed, in the said order, that in the present case, the cheque for

encashment was issued by a drawee bank located outside the territorial

jurisdiction of Delhi and hence, the complaint was not maintainable in

Delhi. It was also held that mere issuance of notice in Delhi would not

vest jurisdiction on the courts at Delhi. In revision, the learned ASJ

upheld the decision of the learned Metropolitan Magistrate and dismissed

the revision petition preferred by the petitioner.

3. Learned counsel for the petitioner submits that the impugned

order dated 10.7.2009, upholding the judgment of the learned

Metropolitan Magistrate dated 20.3.2009 is erroneous inasmuch as the

courts below failed to consider the fact that in the case of K. Bhaskaran

vs. Sankaran Vaidhyan Balan & Anr., reported as (1999) 7 SCC 510, it

was held by the Supreme Court that the following acts were the necessary

components for the offence under Section 138 of the Act to be

constituted:

      (i)    drawing of the cheque,

     (ii)    presentation of the cheque to the bank,

(iii) returning the cheque unpaid by the drawee bank,

(iv) giving notice in writing 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.

It is urged that the aforesaid decision had made it clear that it was not

necessary that all the above five acts ought to have been perpetrated at

the same locality and it is possible that each of those five acts could have

occurred at five different localities and that any one of the courts

exercising jurisdiction in those five local areas could then have become

the place of trial for the offence under Section 138 of the Act.

4. Learned counsel for the petitioner further submits that

reliance placed by the courts below in the case of M/s Harman Electronics

(P) Ltd. vs. M/s National Panasonic India Ltd., 156 (2009) DLT 160

(SC) is misplaced, as in the aforesaid decision, it was particularly noticed

that the complaint was completely silent on the fact whether the cheques

were presented at Chandigarh or not. It is stated that in the aforesaid

case, as the parties were carrying on business at Chandigarh, the

transactions took place at Chandigarh, the cheques were issued at

Chandigarh, the Supreme Court had observed that it had no option but to

presume that the cheques were also presented at Chandigarh and

dishonour of the cheques took place at Chandigarh, hence mere sending

of a demand notice from Delhi would not vest jurisdiction on Delhi courts

to take cognizance under the Act. It is the contention of the counsel for

the petitioner that unlike the facts in the case of M/s Harman Electronics

(supra), in the present case, mere issuance of a legal notice by the

petitioner/complainant from Delhi alone does not confer territorial

jurisdiction on Delhi courts, rather the aforesaid act combined with the act

of presentation of cheque for encashment would confer such jurisdiction.

He submits that the petitioner has filed an additional affidavit, wherein it

is stated that the loan agreement was executed at New Delhi and that the

loan was disbursed to the respondent from the account of the petitioner

from New Delhi.

5. Counsel for the petitioner further states that the cheques in

question issued by the respondent were payable at par at all branches of

the drawee bank because of the core banking system adopted by banks in

the country, thus entitling an outstation cheque to be paid at par at all

the branches of a drawee bank in any part of the country. He submits that

the cheques in question were presented at the bank of the petitioner at

New Delhi for encashment, through the clearance house of the Reserve

Bank of India, and were dishonoured by the bank of the respondent at

New Delhi and returned unpaid to the petitioner through its bank at New

Delhi with the remarks "insufficient funds". Hence, it is canvassed that

contrary to the findings of both the courts below, territorial jurisdiction

would vest in the courts at Delhi.

6. The question of territorial jurisdiction vesting in the Courts in

Delhi, in the context of complaints filed under Section 138 of the Act

came up for consideration before this Court in a batch of matters, lead

matter being M/s Religare Finvest Ltd. vs. State & Anr.

Crl.Rev.P.No.179/2009, reported as 173(2010) DLT 185. In the

aforesaid case, after examining a number of judgments cited by both

sides on the issue of territorial jurisdiction including K. Bhaskaran vs.

Sankaran Vaidhyan Balan and Anr. reported as (1999) 7 SCC 510;

Trisuns Chemical Industry vs. Rajesh Agarwal and Ors. reported as

(1999) 8 SCC 686; Shri Ishar Alloy Steels Ltd. vs. Jayaswals NECO Ltd.

reported as 2001 (3) SCC 609; Lok Housing and Constructions Limited

vs. Raghupati Leasing and Finance Limited and Anr. reported as 100

(2002) DLT 38; Mosaraf Hossain Khan vs. Bhagheeratha Engg. Ltd.

reported as (2006) 3 SCC 658; Smt. Shamshad Begum vs. B.

Mohammed reported as 2008 (13) SCALE 669; Rajiv Modi vs. Sanjay

Jain reported as V (2009) SLT 725; ICICI Bank Ltd. vs. Subhas Chand

Bansal reported as 160 (2009) DLT 379; Achintya Mandal vs. Chaitanya

Agro Products & Ors. reported as 2009 (108) DRJ 471; M/s Harman

Electronics Pvt. Ltd. vs. M/s National Panasonic India Ltd. reported as

2009 II AD SC 21; Religare Finvest Limited vs. Sambath Kumar A

reported as (2010) JCC (NI) 266 and Patiala Casting P. Ltd. & Ors. vs.

Bhushan Steel Ltd. reported as 2010 IV AD (CRL)(DHC) 266, this Court

had held as below:-

"15. As regards the submission of the counsel for the respondent that territorial jurisdiction vests in a Court in whose jurisdiction, the major portion of the cause of action arises, i.e., the locality where the bank of the accused which has dishonoured the cheque is situated, the Supreme Court has clarified in the case of K. Bhaskaran (supra), that the locality where the bank of the accused, which has dishonoured the cheque, is situated cannot be regarded as the sole criteria to determine the place of offence and that a place, for the purpose of invoking the provisions of Section 138 of the Act, would depend on a variety of facts. Pertinently, the term used by the Supreme Court in the aforesaid case for completing the offence under Section 138 of the Act is "acts" and not "cause of action". The said position emerges clearly from a bare reading of paras 11, 14 and 16 of the aforesaid judgment reproduced hereinabove. Therefore, this Court is not inclined to agree with the submission of the counsel for the respondent that the major portion of the cause of action in the present case arose only after the cheque issued by the respondent/accused was forwarded by the banker of the petitioner/complainant to the banker of the accused, and where, on presentation, the cheque was dishonoured, which in the present case, is situated not in Delhi, but in Pune.

16. It is clear from the provision itself that an offence under Section 138 would not be completed with the dishonour of the cheque. Rather, it attains completion only with the failure of the drawer to pay the

cheque amount within the expiry of the fifteen days after the legal notice is served upon the drawer of the cheque/s whose cheque/s have been dishonoured. As noted above, the offence under Section 138 of the Act can be completed only with the concatenation of a number of acts, the acts being, drawing of the cheque, presentation of the cheque with the bank, returning of the cheque unpaid by the drawee bank, giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, and failure of the drawer to make payment within 15 days of the receipt of the notice. It is not essential that all the acts should be committed at the same locality. It is quite possible that all the five acts are perpetrated in five different localities. In such a situation, any one of the courts exercising jurisdiction in one of the five localities can become the place of trial for the offence under Section 138 of the Act. At the stage of entertaining a complaint under Section 138 of the Act, the Court is only required to arrive at a prima facie opinion as to the territorial jurisdiction, on the basis of the averments made therein, without launching into a fact finding mission as to their correctness or otherwise.

XXXX

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25. From the aforesaid facts and circumstances, there appears no ambiguity on the aspect of the right of the petitioner/complainant to file a complaint in a Court having jurisdiction in the context of the five acts mentioned in the case of K. Bhaskaran (supra). In the present case, as noted above, a substantial part of the cause of action for filing of the complaint by the petitioner/company against the respondent/accused under Section 138 of the Act, prima facie appears to have arisen within the jurisdiction of the courts in Delhi. However, it is clarified that if after taking cognizance, the respondent/accused is able to place such material facts on the record which demonstrate that0020the Courts in Delhi do not have the territorial jurisdiction to entertain the complaint, the learned Metropolitan Magistrate shall still have a free hand to ascertain the truth of the allegations made by the

petitioner/complainant and arrive at a different conclusion."

7. On a plain reading of the principles laid down in the aforesaid

case, it is clear that the two acts of presentation of the cheque and

issuance of legal notice from Delhi, constitute two of the five acts

contemplated by K. Bhaskaran vs. Sankaran Vaidhyan Balan & Anr.

(supra). Further, the petitioner/complainant claims that the loan

agreement was executed at Delhi and the loan was disbursed to the

respondent, from the account of the petitioner, from New Delhi. Hence

this court is inclined to agree with the petitioner that territorial jurisdiction

would vest in Delhi.

8. Admittedly, the cases were at the pre-summoning stage and

evidence had yet not been recorded by the learned Metropolitan

Magistrate. On this point, this Court has already held in the case of M/s

Religare Finvest Ltd. vs. State & Anr. (supra) that the Magistrate taking

cognizance of an offence must not necessarily have the territorial

jurisdiction to try the case. The observations made in this context in the

aforesaid judgment are reproduced hereinbelow:

"24. As discussed above, the Magistrate taking cognizance of an offence must not necessarily have the territorial jurisdiction to try the case as well. Only when an enquiry or trial begins, does the jurisdictional aspect become relevant. In fact, after taking cognizance of the offence, the Magistrate may have to decide as to which court would have the

jurisdiction to enquire into the case and such a situation can arise only during the post-cognizance stage. At the pre-cognizance stage, the Magistrate has only to examine the averments, as set out in the complaint and not more, for prima facie arriving at a decision as to whether some of the acts essential for completing an offence under Section 138 of the Act were done in the territorial jurisdiction of that Court. In the present case, having perused the complaint filed by the petitioner/complainant without ascertaining the correctness of the allegations made therein, prima facie it has to be held that a part of the cause of action has arisen in Delhi and the same is not based solely on the issuance of a legal notice by the petitioner/complainant to the respondent/accused from Delhi, but some other acts done prior thereto, as set out in para (3) hereinabove." (emphasis added)

9. Insofar as the judgment in the case of Shri Ishar Alloy Steels

Ltd. vs. Jayaswals Neco Ltd., reported as (2001) 3 SCC 609 and referred

to by both the courts below is concerned, it was held by this Court in the

case of M/s Religare Finvest Ltd. (supra) that the aforesaid judgment did

not deal with the question of territorial jurisdiction at all. Rather, the

point of discussion was on the meaning of the term, "the bank", as

mentioned in clause (a) of the proviso to Section 138 of the Act and

whether such a bank would take within its fold any bank, including the

collecting bank of the payee of the cheque, for the purposes of examining

the validity of the cheque under the Act. The question of territorial

jurisdiction to entertain a complaint by a particular court was not under

consideration of the Supreme Court in the aforesaid case. Hence, reliance

placed on the aforesaid judgment by the courts below, is misconceived.

10. Further, the judgments in the cases of ICICI Bank Ltd. vs.

Subhash Chand Bansal, reported as 160 (2009) DLT 379 and in

Crl.Rev.P. No. 151 of 2009 entitled HDFC Bank vs. Salamuddin Ahmed,

decided on 15.05.2009 by coordinate benches of this Court and relied

upon by the learned ASJ, appear to be based on facts similar to those in

the case of M/s Harman Electronics (P) Ltd.(supra). As in both the

aforesaid cases, the facts have not been dealt with in detail, they cannot

be made applicable to the present cases in hand where the fact position

appears to be quite different.

11. Furthermore, in light of the averments contained in the

additional affidavit filed by the petitioner, the petitioner is justified in

stating that since the matter was still at the pre-summoning stage, the

petitioner-company was not heard by the learned MM and had it been

afforded an opportunity to be heard, it could have filed such an additional

affidavit along with the supporting documents in the trial court, so as to

satisfy the court that it had the territorial jurisdiction to proceed with the

complaint filed by the petitioner. Reliance can be placed on Crl. M.C. 50 of

2010 entitled Hartaj Singh v. Godrej Agrovet Ltd. & Anr., decided by a

coordinate bench of this court on 31.05.2010, wherein at the pre-

summoning stage, the complainant (respondent in that case) could not

file an additional affidavit and supporting documents to make out a case

of territorial jurisdiction. The Single Judge in that case held that if

objections as to lack of territorial jurisdiction were raised at the pre-

summoning stage, the complainant could have filed an additional affidavit

by way of evidence along with supporting documents to take a categorical

stand and justify its stand that the criminal courts in Delhi were vested

with territorial jurisdiction to entertain the complaint.

12. In the instant case, when the learned counsel for the

petitioner has filed additional affidavit along with the relevant documents

and has taken a clear and categorical stand with regard to additional acts

relevant for the purpose of deciding the issue of territorial jurisdiction,

this Court is inclined to agree with him that the allegation made in the

complaint, when read in conjunction with the additional affidavit, would

prima facie show that there vests territorial jurisdiction in the court at

New Delhi. It is further relevant to note that in case the

respondent/accused enters appearance before the court below after being

summoned, he shall still have a right to take a plea with regard to the

aspect of territorial jurisdiction of the court by placing such material facts

on record, as may be considered necessary at that stage. Learned

Metropolitan Magistrate would then be in a position to ascertain the truth

of the assertions made by the petitioner/complainant and could then

arrive at a different conclusion.

13. In view of the above, the present petition is allowed and the

impugned orders are set aside. The case is remanded back to the trial

court with directions to proceed further and deal with the complaint of the

petitioner filed under Section 138 of the Act in accordance with law. The

petitioner shall appear before the learned Metropolitan Magistrate on

26.05.2011 at 2.00 PM for further proceedings.

14. It is however made clear that while passing the present order,

this Court has refrained from dealing with the arguments urged by the

learned counsel for the petitioner on the issue of the core banking system

adopted by banks in the country, which requires outstation cheques to be

paid at par at all the branches of a drawee bank in any part of the

country, which as per the petitioner, is an additional ground for conferring

territorial jurisdiction on courts at Delhi, for the reason that, without

going into the merits of the aforesaid argument, this Court finds that

there exist other grounds which are considered sufficient to hold that, on

a prima facie view, courts at Delhi would be vested with territorial

jurisdiction to entertain the complaint filed by the petitioner under Section

138 of the Act.

A copy of this order be forwarded by the Registry forthwith to

the trial court for information.

                                                              (HIMA KOHLI)
      APRIL 06, 2011                                            JUDGE
      sk