Delhi High Court
G.E. Capital Transportation ... vs Deepak Bhavanji Thakkar on 14 March, 2011
Author: Hima Kohli
9, 10, 11, 15, 16, 18, 20, 23 and 31
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CRL.REV.P. 268/2010 and CRL.M.A. 7171-7172/2010
CRL.REV.P. 269/2010 and CRL.M.A. 7174/2010
CRL.REV.P. 270/2010 and CRL.M.A. 7176/2010
CRL.REV.P. 274/2010 and CRL.M.A. 7186/2010
CRL.REV.P. 275/2010 and CRL.M.A. 7188/2010
CRL.REV.P. 277/2010 and CRL.M.A. 7192/2010
CRL.REV.P. 279/2010 and CRL.M.A. 7198/2010
CRL.REV.P. 282/2010 and CRL.M.A. 7204/2010
CRL.REV.P. 290/2010 and CRL.M.A. 7221/2010
Decided on 14.03.2011
IN THE MATTER OF :
G.E. CAPITAL TRANSPORTATION FINANCIAL SERVICES LTD.
..... Petitioner
Through: Mr. Vinay Kumar Shailendra, Advocate
versus
DEEPAK BHAVANJI THAKKAR ....Respondent in CRL.RP 268/2010
TAHIR HUSSAIN ....Respondent in CRL.RP 269/2010
JVM LOGISTICS AND ORS. ....Respondent in CRL.RP 270/2010
KISHAN PAL TYAGI ....Respondent in CRL.RP 274/2010
DEEPAK BHAVANJI THAKKAR ....Respondent in CRL.RP 275/2010
AKRAM CHOUDHARI ....Respondent in CRL.RP 277/2010
RAJKUMAR MATHURAPRASAD SINGHAL ....Respondent in CRL.RP 279/2010
PURI RAM ..... Respondent in CRL.RP 282/2010
RAJASHI RAMADEBHAI KAMBARIYA ....Respondent in CRL.RP 290/2010
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 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.REV.P. 268/2010 are referred to.
2. The present petition is filed by the petitioner under Section 397
read with Section 401 Cr.P.C. read with Section 482 Cr.P.C. praying inter
alia for quashing of the order dated 30.3.2010 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 30.3.2010, the learned Metropolitan Magistrate
returned the complaint of the petitioner for presentation of the same before
the court having territorial jurisdiction, 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 the fact that the complainant-company
has its registered office in Delhi or the cheque in question was presented at
a service branch of the Drawee Bank situated at Delhi, would confer
territorial jurisdiction on the courts at Delhi. In the impugned order, it was
observed 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 merely because of issuance of
legal notice from Delhi.
4. Learned counsel for the petitioner submits that the impugned
order of the learned Metropolitan Magistrate dated 30.3.2010 is erroneous,
inasmuch as the court 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 court 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 and dishonor of the
cheque 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
finding of the court below, territorial jurisdiction would vest in the courts at
Delhi.
7. It was also brought to the notice of this court that a Division
Bench of this Court in the case of Delhi High Court Legal Services Committee
vs. Govt. of NCT of Delhi, decided on 23.09.2009 in WP (C.) 11011/2009,
had directed the return of all those complaints where courts had taken
cognizance without actually having territorial jurisdiction. Learned counsel
for the petitioner states that the Supreme Court in SLP(C) No.29044/2009
entitled Vijay Kumar Shailendra vs. Delhi High Court Legal Services
Committee and Anr filed against the aforesaid order, had directed status quo
to be maintained until further orders. He states that while the present
complaints were filed in May 2009, the status quo order was passed by the
Supreme Court on 3.11.2009 and in view of the said order, the complaints
ought not to have been returned by the court below, particularly when the
aforesaid interim order was pointed out to the court below.
8. 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
XXXX
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 that
the 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."
9. On a plain reading of the principles laid down in the aforesaid
cases, 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 on a prima facie view, territorial jurisdiction
would vest in Delhi.
10. 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)
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 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 averments contained 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. As for the argument of the counsel for the petitioner that the
learned MM had erred in returning the complaint, in the light of the status
quo order passed by the Supreme Court in the SLP filed against the order of
a Division Bench of this Court in Delhi High Court Legal Services
Committee(supra), wherein directions were issued for the return of all those
complaints, where cognizance had been taken by the trial court without
being vested with territorial jurisdiction, this court is inclined to agree with
the observation of the learned MM that such a status quo order would
operate only against those complaints where cognizance had already been
taken and not in cases, such as the one at hand, where cognizance had yet
to be taken. Hence, the argument of the counsel for the petitioner in this
regard is turned down.
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)
MARCH 14, 2011 JUDGE
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