G.E. Capital Transportation ... vs Lakhmanbhai Govindbhai Karmur
2011 Latest Caselaw 1169 Del

23 to 28.
*         IN THE HIGH COURT OF DELHI AT NEW DELHI

+       CRL.M.C. No.2478/2009 & Crl.M.A. No.8398/2009
        CRL.M.C. No.2482/2009 & Crl.M.A. No.8406/2009
        CRL.M.C. No.2493/2009 & Crl.M.A. No.8428/2009
        CRL.M.C. No.2502/2009 & Crl.M.A. No.8446/2009
        CRL.M.C. No.2531/2009 & Crl.M.A. No.8504/2009
        CRL.REV.P. No.140/2009 & Crl.M.A.No.3295/2009


                                                     Decided on 28.02.2011
IN THE MATTER OF :

G.E. CAPITAL TRANSPORTATION FINANCIAL SERVICES LTD.
                                                      ..... Petitioner
                         Through: Mr. Vijay K. Shailendra with
                         Ms. Worthing Kasar, Advs.

                   versus

LAKHMANBHAI GOVINDBHAI KARMUR ....Respondent in CRL.M.C.2478/2009
CREATIVE CONSTRUCTION & ORS.  ....Respondent in CRL.M.C.2482/2009
VIKRANT UDHAVJI NARANAWARE    ....Respondent in CRL.M.C.2493/2009
HABIB HOTHIBHAI BAMBANIYA     ....Respondent in CRL.M.C.2502/2009
RAJENDRA PARIHAR              ....Respondent in CRL.M.C.2531/2009
BAPUJI VHATKAR               ....Respondent in CRL.REV.P.140/2009

                               Through: None.

CORAM

* HON'BLE MS.JUSTICE HIMA KOHLI

     1. Whether Reporters of Local papers may        Yes
        be allowed to see the Judgment?

     2. To be referred to the Reporter or not?       Yes

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

HIMA KOHLI, J. (Oral)

1. The present petitions are disposed of by this common order and

judgment as the impugned judgment is common in all these cases and the

question involved is also common. For the sake of convenience, only the

facts of CRL.M.C. No.2478/2009 are referred to.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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."

8. 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.

9. 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)

10. 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.

11. 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.

12. 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.

13. In the instant cases, when the learned counsel for the petitioner

has filed additional affidavits 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.

14. In view of the above, the present petitions are allowed and the

impugned orders are set aside. The cases are 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

04.04.2011 at 2.00 PM for further proceedings.

15. 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)
      FEBRUARY 28, 2011                                         JUDGE
      sk