M/S. Mahalaxmi Embroidery vs M/S. Shivam Devansh Fab. Pvt. Ltd. ...
2011 Latest Caselaw 1119 Del

           IN THE HIGH COURT OF DELHI: NEW DELHI

+              CRL. M.C. No. 2882/2010

%              Judgment decided on: 24th February, 2011

M/S. MAHALAXMI EMBROIDERY                        .....PETITIONER

                          Through:   Mr. Manik Arora, Adv.

                          Versus

M/s. SHIVAM DEVANSH FAB. PVT.                   ....RESPONDENTS
LTD. & ORS.

                          Through: Mr. Alamgir, Adv.


Coram:
HON'BLE MR. JUSTICE A.K. PATHAK

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

       2. To be referred to Reporter or not?               No

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


A.K. PATHAK, J. (Oral)

1. By way of present petition under Section 482 of Code of

Criminal Procedure, petitioner has prayed that the order dated

28th July, 2010 passed by Metropolitan Magistrate, Delhi,

whereby it has been held that the courts at Delhi had no

territorial jurisdiction to entertain the complaint, be set aside.

2. Briefly stated, facts of the case are that the petitioner had

filed a complaint under Section 138 of the Negotiable

Instruments Act, 1881 (for short hereinafter referred to as "the

Act") before Metropolitan Magistrate, Delhi. It was alleged

therein that the complainant (petitioner) was a proprietorship

firm, having its registered office at Delhi and works at

Faridabad, Haryana. Petitioner was engaged in the embroidery

business. Respondent got various jobs of embroidery done

from the petitioner at Faridabad, Haryana from time to time.

In discharge of its liability, respondent tendered cheque bearing

No. 465488 dated 23rd April, 2010 amounting to Rs.45,551/-

drawn on Indian Overseas Bank, Faridabad, Haryana. The

said cheque was deposited by the petitioner with its banker,

i.e., Syndicate Bank, Khan Market, New Delhi on 24th April,

2010 for encashment. However, cheque was returned

dishonored with the remarks "payment stopped". Demand

notice dated 21st May, 2010 was served upon the respondent

through registered AD post thereby calling upon it to pay the

cheque amount within 15 days. Despite service of demand

notice, cheque amount was not paid.

3. From the facts narrated above, it is abundantly clear that

the business dealings took place between the parties at

Faridabad; cheque had been drawn at Faridabad. Perusal of

notice dated 21st May, 2010 shows that same had been sent to

the respondent at its Faridabad address. Drawer‟s bank is also

situated at Faridabad.

4. In K. Bhaskaran vs. Sankaran Vaidhyan Balan and

Anr. (1999) 7 SSC 510, Supreme Court has held that the

offence under Section 138 of the Act can be completed only

with the concatenation of number of acts, i.e., (i) drawing of

the cheque, (ii) presentation of the cheque to the bank, (iii)

returning of cheque unpaid by the drawee bank, (iv) giving

notice in writing to the drawer of the cheque demanding

payment of the cheque amount, (v) failure of the drawer to

make payment within 15 days of the receipt of the notice. In

case the five different acts were done in five different locations,

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 have been done.

5. The question which needs to be redressed in this petition

is whether the jurisdiction of Delhi courts would be attracted

merely on account of (a) issuance of notice by the petitioner to

the drawer of the cheque demanding payment of the cheque

amount from Delhi; (b) presentation of the cheque by the

petitioner to its banker at Delhi.

6. In this case, admittedly, drawer‟s bank is situated at

Faridabad, Haryana. The cheque had to be presented with the

drawer‟s bank where account is being maintained. Even if, the

same is deposited by the payee in its account, it is only the

banker of drawer, which will be in a position to say that the

payment of cheque had been stopped or that the amount in the

account exceeds the arrangement. Only drawer‟s bank can

return the cheque unpaid on its presentation. The payee of the

cheque has an 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 drawer‟s

bank on which the cheque is drawn. In Sh. Ishar Alloy Steel

Ltd. vs. Jayaswals NECO Ltd. AIR 2001 II AD (SC) 330,

Supreme Court has held that „the bank‟ referred to in Clause

(a) to the proviso to Section 138 of the Act means the "drawee

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

the cheque is presented for collection including the bank of the

payee in whose favour the cheque is issued. In ICICI Bank

Ltd. Vs. Subhash Chand Bansal & Ors. 160 (2009) Delhi

Law Times 379, this Court has held that the court in whose

territorial jurisdiction drawee bank is situated would have

jurisdiction to entertain the complaint. Similar is the view

expressed in Shroff Publisher and Distributors Pvt. Ltd. vs.

Springer India Pvt. Ltd. 2008 Criminal Law Journal 1217,

wherein it was held that the payee has an 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 drawer‟s bank, on which cheque is drawn. In

this case, drawer‟s bank is situated in Faridabad. Mere deposit

of cheque by the petitioner in its account at Delhi would not be

sufficient to show that he had presented the cheque at Delhi.

Thus, question (a) is answered against the petitioner.

7. Notice of demand had been issued by the petitioner from

Delhi to the respondent at its Faridabad address through

registered A.D post. In Harman Electronics (P) Ltd. & Anr.

vs. M/s. National Panasonic India Ltd. AIR 2009 SC 1168,

Supreme Court, in somewhat similar facts, has held that

issuance of notice from Delhi would not by itself give rise to a

cause of action under the Act but communication of notice

would give. Giving of notice cannot have any precedence

towards the service. In Som Sugandh Industries Ltd. & Anr.

vs. UOI & Anr. 2010 (I) JCC (NI) 105, a Single Judge of this

Court has held that 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. Mere sending of

notice from Delhi at the address of the accused outside Delhi

does not confer the power to Delhi Courts to try and entertain

the case under Section 138 of the said Act. Thus, I am of the

view that mere issuance of notice by the petitioner from Delhi

by itself would not vest jurisdiction in Delhi courts.

8. In Criminal Jurisprudence, place of residence or business

of complainant or for that matter of accused would not attract

the jurisdiction of that court, it is the place where offence or

part offence had been committed, which would vest the

jurisdiction with that court. In Harman‟s case (supra) Supreme

Court has held that jurisdiction of the court to try a criminal

case is governed by the provisions of the Criminal Procedure

Code and not on common law principle. Thus, merely because

petitioner has its head office at Delhi or that respondent has its

registered office at Delhi would not make much difference. In

this case, both petitioner as well as respondent were having its

works at Faridabad; whole business transactions took place at

Faridabad; cheque was drawn by drawer bank at Faridabad;

cheque is deemed to have been presented by the drawer bank at

Faridabad, notice, though was dispatched from Delhi, but was

addressed to the respondent at Faridabad office and is deemed

served at Faridabad. Whole cause of action had arisen at

Faridabad in terms of K. Bhaskaran‟s case.

9. For the foregoing reasons, I do not find any perversity or

patent illegality in the impugned order. Petition is dismissed

being devoid of merits.

A.K. PATHAK, J.

FEBRUARY 24, 2011 rb