Dushyant Verma vs Tek Chand
2011 Latest Caselaw 4210 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                       Decided on: August 30, 2011

+      CRIMINAL M.C. No.3531/2010 & Crl.M.A. No.17307/2010

       DUSHYANT VERMA                      ....PETITIONER
              Through: Mr. Maneesh Gumber, Advocate

                         Versus

       TEK CHAND                                      ....RESPONDENT

Through: Nemo

CORAM:

HON'BLE MR. JUSTICE AJIT BHARIHOKE

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

2. To be referred to the Reporter or not ?

3. Whether the judgment should be reported in Digest ?

AJIT BHARIHOKE, J.(ORAL)

1. No one appears on behalf of the respondent even on the third call.

It is already 2:30 pm. Therefore, I am left with no alternative but to

dispose of the matter after hearing the learned counsel for the petitioner.

2. Dushyant Verma, proprietor of M/s Sholphin (India), the petitioner

herein, vide instant petition under Section 482 Cr.P.C., is seeking quashing

of the criminal complaint No.42/J/09 under Section 138 N.I. Act pending in

the court of Additional Chief Metropolitan Magistrate, Tis Hazari Courts as

also the quashing of the impugned summoning order dated 29.01.2009

and the subsequent proceedings pursuant to the summoning order.

3. Briefly stated, facts relevant for the disposal of this petition are that

respondent No.2 filed a complaint under Section 138 N.I. Act against the

petitioner, claiming that the petitioner took a friendly loan of `1.5 lakhs

from the respondent No.2. For the liquidation of said loan, the petitioner

issued two cheques bearing Nos.157072 and 157079 respectively dated

08.07.2008 and 10.07.2008 for `50,000/- and `1 lakh, both drawn on

Punjab & Sind Bank, Ajronda, Faridabad. The complainant presented

aforesaid cheques for encashment through his banker Canara Bank,

Kamla Nagar but the cheques were dishonoured vide memo dated

26.11.2008 with the remarks "Exceeds Arrangements". Respondent No.2

claims to have served the petitioner with the notice of demand dated

11.12.2008 as envisaged under Section 138 N.I. Act, but the petitioner

failed to pay the cheque amount within the stipulated period. This led to

filing of the complaint.

4. Learned Magistrate, on consideration of the complaint and the

preliminary evidence alleged by respondent No.2, found that a prima facie

case existed under Section 138 N.I. Act and accordingly summoned the

petitioner for the aforesaid offence vide his order dated 29.01.2009.

Feeling aggrieved by the impugned summoning order, the petitioner filed

a revision petition which was dismissed by the learned Additional Sessions

Judge vide his order dated 07.10.2010.

5. Being dissatisfied with the order of revision court, the petitioner has

moved instant application under Section 482 Cr.P.C.

6. Learned counsel for the petitioner, heavily relying upon the

judgment of the Supreme Court in the matter of Harman Electronics (P)

Ltd. & Anr. Vs. M/s. National Panasonic India Ltd., 2009(1) SCC 720

and Shri Ishar Alloy Sales Ltd. Vs. Jayaswals Neco Ltd., (2001) 3 SCC

609 has contended that perusal of the complaint would show that the

petitioner is resident of Faridabad. Loan was advanced to the petitioner in

Faridabad. Cheques for repayment of loan were also issued at Faridabad

and the cheques were presented for encashment with the banker of the

petitioner i.e. Punjab & Sind Bank, Ajronda, Faridabad. Learned counsel

submits that the notice under Section 138 N.I. Act was served on the

petitioner at Faridabad. Therefore, no cause of action has, prima facie,

arisen at Delhi, as such the trial Magistrate as well as the Revision Court

has committed a grave error in holding that Delhi Court has jurisdiction in

this matter.

7. The question of territorial jurisdiction to try an offence under Section

138 N.I.Act came up for the consideration of the Supreme Court in

Harman Electronics (P) Ltd. & Anr. Vs. M/s. National Panasonic

India Ltd., 2009 (1) SCC 720. In the said matter, Supreme Court

considered the earlier judgment in K.Bhaskaran's case (supra) and held

that Delhi Courts have no jurisdiction to try the case, inter alia, observing

thus:

"9. Reliance has been placed by both the learned Additional Sessions Judge as also the High Court on a decision of this Court in K. Bhaskaran v. Sankaran Vaidhyan Balan. This Court opined that the offence under Section 138 of the Act can be completed only with the concatenation of a number of acts, namely, (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. It was opined that if 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 and the complainant would be at liberty to file a complaint petition at any of those places. As regards the requirements of giving a notice as also receipt thereof by the accused, it was stated:

"18. On the part of the payee he has to make a demand by „giving a notice‟ in writing. If that was the only requirement to complete the offence on the failure of the drawer to pay the cheque amount within 15 days from the date of such „giving‟, the travails of the prosecution would have been very much lessened. But the legislature says that failure on the part of the drawer to pay the amount should be within 15 days „of the receipt‟ of the said notice. It is, therefore, clear that „giving notice‟ in the context is not the same as receipt of notice. Giving is a process of which receipt is the accomplishment. It is for the payee to perform the former process by sending the notice to the drawer at the correct address."

The Court, however, refused to give a strict interpretation to the said provisions despite noticing Black's Law Dictionary in regard to the meaning of the terms "giving of notice" and "receiving of the notice" in the following terms: "19. In Black's Law Dictionary „giving of notice‟ is distinguished from „receiving of the notice‟: „A person notifies or gives notice to another by taking such steps as may be reasonably required to inform the other in the ordinary course, whether or not such other actually comes to know of it‟. A person „receives‟ a notice when it is duly delivered to him or at the place of his business.

20. If a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start running no matter that the payee sent the notice on the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different strategies and he could escape from the legal consequences of Section 138 of the Act. It must be borne in mind that the court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative measure." For the said purpose, a presumption was drawn as regards refusal to accept a notice.

10. We may, before proceeding to advert to the contentions raised by the parties hereto, refer to another decision of this Court in Dalmia Cement (Bharat) Ltd. v. Galaxy Traders & Agencies Ltd. wherein this Court categorically held:

"7. Section 27 of the General Clauses Act deals with the presumption of service of a letter sent by post. The dispatcher of a notice has, therefore, a right to insist upon and claim the benefit of such a presumption. But as the presumption is a rebuttable one, he has two options before him. One is to concede to the stand of the sendee that as a matter of fact he did not receive the notice, and the other is to contest the sendee‟s stand and take the risk for proving that he, in fact, received the notice. It is open to the dispatcher to adopt either of the options. If he opts the former, he can afford to take appropriate steps for the effective service of notice upon the addressee. Such a course appears to have been adopted by the appellant Company in this case and the complaint filed, admittedly, within limitation from the date of the notice of service conceded to have been served upon the respondents."

It was furthermore held:

"8. ... The payee or holder of the cheque may, therefore, without taking pre-emptory action in exercise of his right under clause (b) of Section 138 of the Act, go on presenting the cheque so as to enable him to exercise such right at any point of time during the validity of the cheque. But once a notice under clause (b) of Section 138 of the Act is „received‟ by the drawer of the cheque, the payee or the holder of the cheque forfeits his right to again present the cheque as cause of action has accrued when there was failure to pay the amount within the prescribed period and the period of limitation starts to run which cannot be stopped on any account. This Court emphasised that „needless to say the period of one month from filing the complaint will be reckoned from the date immediately falling the day on which the period of 15 days from the date of the receipt of the notice by the drawer expires‟."

13. It is one thing to say that sending of a notice is one of the ingredients for maintaining the complaint but it is another thing to say that dishonour of a cheque by itself constitutes an offence. For the purpose of proving its case that the accused had committed an offence under Section 138 of the Negotiable Instruments Act, the ingredients thereof are required to be

proved. What would constitute an offence is stated in the main provision. The proviso appended thereto, however, imposes certain further conditions which are required to be fulfilled before cognizance of the offence can be taken. If the ingredients for constitution of the offence laid down in provisos (a), (b) and (c) appended to Section 138 of the Negotiable Instruments Act are intended to be applied in favour of the accused, there cannot be any doubt that receipt of a notice would ultimately give rise to the cause of action for filing a complaint. As it is only on receipt of the notice that the accused at his own peril may refuse to pay the amount. Clauses (b) and (c) of the proviso to Section 138 therefore must be read together. Issuance of notice would not by itself give rise to a cause of action but communication of the notice would.

21. We cannot, as things stand today, be oblivious of the fact that a banking institution holding several cheques signed by the same borrower can not only present the cheque for its encashment at four different places but also may serve notices from four different places so as to enable it to file four complaint cases at four different places. This only causes grave harassment to the accused. It is, therefore, necessary in a case of this nature to strike a balance between the right of the complainant and the right of an accused vis-à-vis the provisions of the Code of Criminal Procedure."

20. Therefore, the place where an offence has been committed plays an important role. It is one thing to say that a presumption is raised that notice is served but it is another thing to say that service of notice may not be held to be of any significance or may be held to be wholly unnecessary.

21. In Mosaraf Hossain Khan Vs. Bhagheeratha Engg. Ltd. [(2006) 3 SCC 658], this court held:

"30. In terms of Section 177 of the Code of Criminal Procedure every offence shall ordinarily be inquired into and tried by a court within whose local jurisdiction it was committed. 178 provides for place of inquiry or trial in the following terms:

„178. (a) When it is uncertain in which of several local areas an offence was committed, or

(b) where an offence is committed partly in one local area and partly in another, or

(c) where an offence is a continuing one, and continues to be committed in more local areas than one, or

(d) Where it consists of several acts done in different local areas.

31. A bare perusal of the complaint petition would clearly go to show that according to the complainant the entire cause of action arose within the jurisdiction of the district courts of Birbhum and in that view of the matter it is that court which will have jurisdiction to take cognizance of the offence. In fact the jurisdiction of the court of CJM, Suri, Birbhum is not in question. It is not contended that the complainant had suppressed material fact and which if not disclosed would have demonstrated that the offence was committed outside the jurisdiction of the said court. Even if Section 178 of the Code of Criminal Procedure is attracted, the court of the Chief Judicial Magistrate, Birbhum will alone have jurisdiction in the matter.

32. Sending of cheques from Ernakulam or the respondents having an offence at that place did not form an integral part of „cause of action‟ for which the complaint petition was filed by the appellant and cognizance of the offence under Section 138 of the Negotiable Instruments Act, 1881 was taken by the Chief Judicial Magistrate, Suri."

8. In Shri Ishar Alloy Sales Ltd. V. Jayaswals Neco Ltd., (2001) 3

SCC 609, the Supreme Court held that the expression "the bank"

occurring in proviso (a) to Section 138 of the N.I.Act means the drawee

bank and not the collecting bank. Hence, in order to attract the criminal

liability under Section 138, N.I. Act, the cheque must be presented to the

drawee bank within the statutory period either personally or through a

collecting bank. That being the law, the place of location of collecting

bank through which cheque was sent to some other branch jurisdiction

would not confer jurisdiction on the courts having territorial jurisdiction

over that place.

9. In the instant case, undisputedly the petitioner is resident of

Faridabad. The cheques, which are subject matter of the complaint under

Section 138 N.I. Act, are also drawn on Punjab & Sind Bank, Ajronda,

Faridabad where the petitioner is maintaining its account. The cheques in

question, though were deposited for collection by the respondent through

its bankers Canara Bank in Kamla Nagar, Delhi, were sent for collection to

the drawee bank at Ajronda, Faridabad where they were allegedly

dishonoured. Even the notice of demand was served on the petitioner at

the address of Faridabad. Thus, in view of the law laid down by the

Supreme Court in the matter of M/s Harman Electronics (P) Ltd.

(supra) and Shri Ishar Alloy Sales Ltd. (supra), the entire cause of

action for filing the complaint under Section 138 N.I. Act has arisen at

Faridabad. Thus, no part of cause having arisen in Delhi, Delhi courts have

no jurisdiction. Accordingly, I find it difficult to sustain the order of

learned M.M. dated 29.01.2009 and the order of revision court dated

07.10.2010.

10. The result of above discussion is that no part of cause of action

having arisen within the territory of Delhi, the court in Delhi have no

jurisdiction to try the complaint in question. The impugned orders of

learned Metropolitan Magistrate dated 29.01.2009 and the revision court

dated 07.10.2010 are accordingly set aside and the complaint is directed

to be returned to the respondent in order to enable him to file it before

the competent court.

11. Petition stands disposed of.

(AJIT BHARIHOKE) JUDGE

AUGUST 30, 2011 pst