Ge Capital Transportation ... vs Rahisuddin Khan
2011 Latest Caselaw 4398 Del

*        IN THE HIGH COURT OF DELHI AT NEW DELHI

+           Crl Rev. P.170/2010 & Crl.M.A.4840/2010

     %          Judgment reserved on: 04th August, 2011
                Judgment delivered on: 09th September, 2011


GE CAPITAL TRANSPORTATION
FINANCIAL SERVICES LTD                     ..... Petitioner
                   Through: Mr.Vinay Kumar Shailendra,
                   & Ms.Worthing Kasar, Advocates
              versus

RAHISUDDIN KHAN                                ..... Respondent
                               Through: None

CORAM:
HON'BLE MR. JUSTICE SURESH KAIT

     1. Whether the Reporters of local papers may be allowed
        to see the judgment?                           Yes.
     2. To be referred to Reporter or not?             Yes.
     3. Whether the judgment should be reported
        in the Digest?                                  Yes.

SURESH KAIT, J.

1. Vide the instant petition the petitioner has

challenged the impugned order dated 30.03.2010, whereby,

the learned Metropolitan Magistrate, Dwarka Courts, New

Delhi returned the complaint case under Section 138

Negotiable Instrument Act, 1881 (hereinafter referred to as

„NI Act‟), inter-alia holding that the complaint is barred by

jurisdiction.

2. In the present case as submitted by learned

counsel for the petitioner, the summons have not been

issued by learned MM as the complaint filed by the petitioner

has been returned on the ground of jurisdiction, therefore,

there is not necessity to issue notice to the respondent in the

instant petition also. This position has been fortified by the

judgment of the constitution bench in the case of Chander

Deo Singh Vs. Prakash Chandra Bose AIR 1963 SC 1430

wherein the Supreme Court has held that the entire scheme

of Chapter XVI of the Code of Criminal Procedure shows that

an accused person does not come into the picture at all till

the process is issued; and since the very question for

consideration being whether he should be called upon to

face an accusation, he has no right to take part in the

proceedings.

3. Learned counsel for petitioner submits that the

cheque in question was duly presented by the petitioner as

the complainant through its bank (collecting bank) to the

respondent/accused bank at New Delhi. Ld. Counsel further

submits that cheque which was payable at par at all

branches of ICICI Bank was issued to the complainant by the

respondent/accused in partial discharge of the pecuniary

liability (towards repayment of the loan). Same was

tendered to the Citibank N.A., Jeevan Bharti Building

Connaught Place, New Delhi where the petition or has

account bearing No.7152027 for encashment. Same was

presented by the Citibank N. A. to the respondent‟s bank

through clearing house of RBI at New Delhi. Cheque was

dishonoured by the bank of the respondent on account of

insufficiency of the funds in the respondents account at New

Delhi. Cheque was returned unpaid by the respondent‟s

bank to the petitioner‟s bank at New Delhi. Legal/demand

notice was issued to the respondent within the statutory

period seeking payment of the cheque amount from New

Delhi. Respondent failed to make the payment within 15

days of receipt of the notice at New Delhi. A complaint case

under Section 138 NI Act had been filed at New Delhi.

4. The petitioner also led an evidence of an expert

witness Shri Raja Maingi, Assistant Manager, Citibank, N.A.,

New Delhi, who deposed on oath that in the return memo of

drawee bank LOC Delhi means presentation of cheque was

made in Delhi to the bank of the accused and the cheque

was dishonoured due to the reason mentioned by the

accused bank and returned unpaid to the bank in Delhi. Even

in the case accused is having an account outside Delhi, the

cheque physically never goes there under the core banking

system. The accused‟s bank participate as a member of

core banking system, accordingly these cheques were

presented at Delhi as per RBI guidelines to the bank of

accused.

5. Further submits that the ld. Trial Court returned

the complaint in spite of the fact that the present case is

fully covered by the order dated 03.11.2009 passed by the

Supreme Court in Special Leave Petition (C) No.29044/2009

titled as Vinay Kumar Shailendra Vs. Delhi High Court Legal

Services Committee & Anr. He further made it clear that the

SLP was filed against the order dated 23.09.2009 passed by

this Court in WP (C) No.11911/2009 titled Delhi High Court

Legal Services Committee Vs. Government of NCT of Delhi

163(2009) DLT 56 (DB), whereby, the Supreme Court had

directed „Status quo, as on today, shall be maintained until

further orders‟. Since the present complaint was filed in May

2009, much before the directions passed by the apex Court.

6. Before going into the issues with respect of the

jurisdiction in this present petition, it is essential to refer the

judgment dated 23.09.2009 of the Division Bench of this

Court where the complaints were filed on the basis of the

issuance of the legal notice from Delhi and was held that:-

"The High Court under Article 226 of the Constitution is required is required to enforce the law of the land and in accordance with the judgment of Supreme Court in M/s Harman Electronics Pvt. Ltd Vs. National Panasonic India Pvt. Ltd 2009(1) SCC 720, all pending complaints in courts having no jurisdiction have to be returned."

7. The aforesaid judgment of this Court on being

challenged vide SLP as mentioned above on the ground that,

the judgment of the Supreme Court in M/s Harman

Electronics (supra) cannot be considered as overhauling the

earlier decision of the Supreme Court in K.Bhashkaran Vs.

Sankaran Vaidyan Balan & Anr (1999) 7 SCC 510 decided on

29.09.1999 contrary to several decisions of the Constitution

Bench at the Supreme Court.

8. Learned counsel for petitioner further submitted

that the in Central Board of Dawoodi Bohra Community &

Anr. Vs. State of Maharashtra & Anr. (2005) 2 SCC 673

wherein it was held in para No.12 as under:-

"12. Having carefully considered the submissions made by the learned senior counsel for the parties and having examined the law laid down by the Constitution Benches in the abovesaid decisions, we would like to sum up the legal position in the following terms :-

(1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or co-equal strength.

(2) A Bench of lesser quorum cannot doubt the correctness of the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose

decision has come up for consideration. It will be open only for a Bench of co- equal strength to express an opinion doubting the correctness of the view taken by the earlier Bench of co- equal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted.

(3) The above rules are subject to two exceptions:

(i) The abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength; and (ii) In spite of the rules laid down hereinabove, if the matter has already come up for hearing before a Bench of larger quorum and that Bench itself feels that the view of the law taken by a Bench of lesser quorum, which view is in doubt, needs correction or reconsideration then by way of exception (and not as a rule) and for reasons it may proceed to hear the case and examine the correctness of the previous decision in question dispensing with the need of a specific reference or the order of Chief Justice constituting the Bench and such

listing. Such was the situation in Raghubir Singh & Ors. and Hansoli Devi & Ors.(supra)."

9. According to the above judgment, the law was

laid down by the Supreme Court in a decision delivered by a

Bench of larger strength is binding on all Benches of lesser

or co-equal strength.

10. Further submitted that the Bench comprising of

three Judges of the Supreme Court appreciated the

submissions and grounds made in the said SLP vide order

dated 03.11.2009, issued notices in the said petition and

directed the matter be posted before a three Judge Bench

and in the meantime, directed „Status quo, as on today, shall

be maintained until further orders‟.

11. It is submitted that in view of the order dated

03.11.2009 passed by the Supreme Court; learned

Magistrate was precluded from returning the present

complaint on the basis of the judgment of the Supreme Court

in M/s Harman Electronics (supra) as referred above, wherein

the same issue was involved.

12. Learned counsel for the petitioner has relied upon

a judgment of the Supreme Court in Trisuns Chemical

Industry Vs. Rajesh Aggarwal & Ors. 1999 (8) SCC 686

wherein it was held as under:-

"11. It is an erroneous view that the Magistrate taking cognizance of an offence must necessarily have territorial jurisdiction to try the case as well. Chapter XIII of the Code relates to jurisdiction of the criminal courts in enquiries and trials. That chapter contains provisions regarding the place where the enquiry and trial are to take place. Section 177 says that:

"177. Every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed".

As is submitted under Section 179 which states that, when an act is an offence by reason of anything which has been done and of a consequence which has ensued, the place of enquiry and trial can as well be in a court within whose local jurisdiction such thing has been done or such consequence has ensued. It cannot be overlooked that the said provisions do not trammel the powers of any court to take cognizance of the offence. Power of the court to take cognizance of the offence is laid in Section 190 of the Code. Sub-sections (1) & (2) read thus:

"(i) Subject to the provisions of this Chapter, any Magistrate of the first

class, and any Magistrate of the second class specially empowered in this behalf under sub-section (2), may take cognizance of any offence

(a) Upon receiving a complaint of facts which constitute such offence;

(b) Upon a police report of such facts;

(c) Upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed.

(2) The Chief Judicial Magistrate may empower any Magistrate of the second class to take cognizance under sub-section (1) of such offences as are within his competence to inquire into or try."

13. Further, it is submitted that Section 193 imposes

a restriction on the court of sessions to take cognizance of

any offence as a court of original jurisdiction. But any

Magistrate of First Class has the power to take cognizance of

any offence, no matter that the offence was committed

within his jurisdiction or not.

14. It is stated, the only restriction contained in

Section 190 is that the power to take cognizance is subject

to the provisions of this Chapter. There are 9 Sections in

Chapter XIV most of which contain one or other restriction

imposed on the power of a first class magistrate in taking

cognizance of an offence. But none of them incorporates any

curtailment on such powers in relation to territorial barrier.

In the corresponding provision in the old Code of Criminal

Procedure (1898) the commencing words were like these:

Except as hereinafter provided. Those words are now

replaced by Subject to the provisions of this chapter.

Therefore, when there is nothing in Chapter XIV of the Code

to impair the power of a judicial magistrate of first class

taking cognizance of the offence on the strength of any

territorial reason it is impermissible to deprive such a

magistrate of the power to take cognizance of an offence of

course, in certain special enactments special provisions are

incorporated for restricting the power of taking cognizance

of offences falling under such acts. But such provisions are

protected by non-obstante clauses.

15. Further submits, the jurisdictional aspect

becomes relevant only when the question of enquiry or a

trial arises. It is therefore, a fallacious thinking that only a

magistrate having jurisdiction to try the case has the power

to take cognizance of the offence. If he is a Magistrate of the

First Class, his power to take cognizance of the offence is not

impaired by territorial restrictions. After taking cognizance

he may have to decide as to the court which has jurisdiction

to enquire into or try the offence and that situation would

reach only during the post cognizance stage and not earlier.

16. According to the aforesaid judgment of the

Supreme Court, in Trisums Chemical Industry (supra) learned

Magistrate taking cognizance of the offence must not

necessarily have a territorial jurisdiction to try the case.

Only when the inquiry or trial begins, does the territorial

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 as

such a situation can arise only during the post-cognizance

stage.

17. Ld. Counsel for the petitioner has further relied

upon the judgment of this Court in Religare Invest Ltd. Vs.

State & Anr. Crl. Rev. Petition No.179/2009 decided on

23.09.2010 as was held in para No.24 as under:-

"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."

18. Learned counsel for the petitioner submits that

the aforesaid judgment has reiterated the position of law and

the same has been followed by this Court in GE Capital

Transportation Financial Services Ltd. Vs. Lakmanbhai

Govind Bhai Karmur, Criminal M.C. No.2478/2009 decided on

28.02.2011 as was held in para No.9 as under:-

"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 herein below:

"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)

19. Learned counsel for the petitioner has further

referred to a Supreme Court judgment in Rajiv Modi Vs.

Sanjay Jain & Ors. V (2009) SLT 725 in para Nos. 22 & 29

held as under:-

"22) It is evident from the above decisions, that, to constitute the territorial jurisdiction, the whole or a part of „cause of action‟; must have arisen within the territorial jurisdiction of the court and the same must be decided on the basis of the averments made in the complaint without embarking upon an enquiry as to the correctness or otherwise of the said facts.

23).....

24).....

25).....

26).....

27).....

28).....

29) In view of the above principles, the Court on basis of the averments made in the complaint, if it is prima facie of the opinion that the whole or a part of cause of action has arisen in its jurisdiction, it can certainly take cognizance of the complaint. There is no need to ascertain that the allegations made are true in fact."

20. Ld. Counsel submits, thereafter this Court in

Religare Invest (supra) has reiterated the aforesaid position

of law and the same has been followed by this Court in the

case of GE Capital (supra).

21. The issues arising for consideration in the present petition are as under:-

I) Whether learned Magistrate has a

jurisdiction to try the cases under Section 138 NI

Act on account of presentation of cheque to the

drawee bank (Bank of the respondent/accused)

in New Delhi by the petitioner/complainant

through its Bank (collecting bank) at New Delhi?;

II) Whether Ld.MM has jurisdiction to try the

cases under Section 138 NI Act on account of

dishonour of cheque at New Delhi by the drawee

bank (bank of the respondent/accused) and

return of unpaid cheque because of insufficiency

of funds in the account of the

respondent/accused by the drawee bank at New

Delhi to the petitioner / complainant bank

(collecting bank) at New Delhi?;

III) Whether Ld.MM has jurisdiction to try the

cases under Section 138 NI Act on account of

issuance of statutory notice to the

respondent/accused from New Delhi by the

petitioner/complainant in view of the judgment of

the Supreme apex Court in case of K.Bhaskran

(supra) in spite of the judgment of the Supreme

Court in case of M/s Harman Electronics(supra).

22. Before dealing the issue involved in the petition in

hand, the facts of the present case are as under:-

Cheque which was payable at par at all branches of

ICICI Bank was issued to the complainant by the

respondent/accused in partial discharge of the pecuniary

liability (towards repayment of the loan). Same was

tendered to the Citibank N.A., Jeevan Bharti Building

Connaught Place, New Delhi where the petitioner has

account bearing No.7152027 for encashment. Same was

presented by the Citibank N. A. to the respondent‟s bank

through clearing house of RBI at New Delhi. Cheques was

dishonoured by the bank of the respondent on account of

insufficiency of the funds in the respondents account at New

Delhi. Cheque was returned unpaid by the respondent‟s

bank to the petitioner‟s bank at New Delhi. Legal/demand

notice was issued to the respondent within the statutory

period seeking payment of the cheque amount from New

Delhi. Respondent failed to make the payment within 15

days of receipt of the notice at New Delhi. A complaint case

under Section 138 NI Act had been filed at New Delhi.

23. Mr. Vinay Kumar Sahilendra, Ld. Counsel for the

petitioner submits that the Supreme Court in K.Bhaskaran

(supra) while dealing with the issue of jurisdiction has held

that Section 138 NI Act contemplates following acts, which

are component of offence under Section 138 NI Act :-

      1)     drawing of the cheque;


       2)     presentation of the cheques 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 cheques amount;

and

5) failure of the drawer to make payment within 15

days of the receipt of the notice.

24. Therefore, five different acts if were dealt in five

different localities, anyone of the Courts exercising

jurisdiction in one of the five local areas, can become a place

of trial for the offence under Section 138 NI Act.

25. Thereafter, the Supreme Court has reiterated the

decision of K.Bhaskaran (supra) in the case of Shamshad

Begum Vs. B. Mohammad 2008 (13) SCALE 669 it is held as

under:-

"3. In response, the respondent had submitted that before issuing notice to the appellant he had shifted his residence to Mangalore and therefore he had issued the notice from Mangalore which was received by the appellant and the reply was sent by her to the complainant to the Mangalore

address. Therefore, as one of the components of the said offence i.e. notice in writing to the drawer of the cheque demanding payment of cheque amount was sent from Mangalore, Court at Mangalore had jurisdiction to try the case. The High Court noted that one of the components of the offence was giving notice in writing to the drawer of the cheque demanding payment of the 2 cheque amount. The said action took place within Mangalore jurisdiction and, therefore, the petition was without merit. It was however stated that if the presence of the appellant was not very necessary for continuation of the proceeding, on appropriate application being filed, the court can grant exemption from appearance.

6. In K. Bhaskaran v. Sankaran Vaidhyan Balan & Anr. [1999(7) SCC 510], it was inter alia observed as follows:-

15. It is not necessary that all the above five acts should have been perpetrated at the same locality. It is possible that each of those five acts could be done at five different localities. But a concatenation of all the above five is a sine qua non for the completion of the offence under Section 138 of the Code. In this context a reference to Section 178(d) of the Code is useful.

It is extracted below:

178. (a)...

(b)...

(c)...

(d) where the offence consists of several acts done in different local areas, it may be enquired into or tried by a court having jurisdiction over any of such local areas.

16. Thus it is clear, if the 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. 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 was done. As the amplitude stands so widened and so expansive it is an idle exercise to raise jurisdictional question regarding the offence under Section 138 of the Act.

17. The more important point to be decided in this case is whether the cause of action has arisen at all as the notice sent by the complainant to the accused was returned as "unclaimed". The conditions pertaining to the notice to be given to the drawer, have been formulated and incorporated in clauses (b) to (c) of the proviso to Section 138 of the Act. The said clauses are extracted below:

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the

drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.;

8. It is not necessary that the above five acts should have been perpetrated at the same locality. It is possible that each of those five acts could be done at five different localities. But concatenation of all the above five is sine qua non for the completion of the offence under Section 138 of the Act.

26. The Supreme Court even in case of M/s Harman

Electronics (supra) has affirmed the decision of the Supreme

Court in K.Bhaskaran (supra) in respect of the Courts

having jurisdiction over the places (I) where the cheque has

been drawn; (II) where the cheque has been presented to

the bank; (III) where the cheque has been returned unpaid

by the drawee bank; (IV) where the respondent/accused

failed to make the payment within 15 days of the receipt of

the legal notice to try the cases under Section 138 of the NI

Act.; (V) Failure of the drawer to make payment within 15

days of the receipt of the notice.

27. The division bench of the Supreme Court in

M/s.Harman Electronics (supra) differed with the earlier

decision taken by another division bench in K.Bhaskaran

(supra) with respect to the jurisdiction over the place of

issuance of demand/legal notice, and held that the courts

having jurisdiction over the place, where, the

respondent/accused receives the legal notice and not the

place of issuance of legal notice, would have jurisdiction to

try the cases under Section 138 NI Act.

28. As regards to the aspect (I) and (II) above, section

138 NI Act clearly states that the cheques have to be drawn

by the person on account maintained by him with the banker

and does not mention the branch of the bank. The branch

acts only as a facilitation centre. Cheque is always drawn on

the bank, whether, payee bank or the drawee bank.

29. Section 3 of the NI Act defines the „banker‟ as

people who include any person acting as a banker and any

post office saving bank.

30. Section 6 of the Act defines „cheque‟ and it inter-

alia states that a "cheque" is a bill of exchange drawn on a

specified banker and not expressed to be payable otherwise

than on demand and it includes the electronic image of a

truncated cheque and a cheque in the electronic form.

"Explanation 1. - For the purposes of this section, the expressions -

(a) "a cheque in the electronic form" means a cheque which contains the exact mirror image of a paper cheque, and is generated, written and signed in a secure system ensuring the minimum safety standards with the use of digital signature (with or without biometrics signature) and asymmetric crypto system;

(b) "a truncated cheque" means a cheque which is truncated during the course of a clearing cycle, either by the clearing house or by the bank whether paying or receiving payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in writing.

Explanation II. - For the purpose of this section, the expression "clearing house" means the clearing house managed by the Reserve Bank of India or a clearing house recognised as such by the Reserve Bank of India."

31. Section 72 of Negotiable Instruments Act

(hereinafter referred to as "NI Act") clearly states that the

cheque must be presented to the Bank at which it is drawn.

Again the said Section does not mention the branch of the

Bank on which cheque is drawn.

"Section 74:- Subject to the provisions of Section 84; a cheque must, in order to charge the drawer, be presented at the bank upon which it is drawn before the relation between the drawer and his banker has been altered to the prejudice of the drawer".

32. Further submits, Section 146 of NI Act, inter-alia,

provides that the Court shall in respect of every proceeding

under Sections 138 - 145 NI Act on production of Bank slips

or memo having thereon the official mark denoting that the

cheque has been dishonoured, presume the fact of

dishonour of such cheque unless and until such fact is

disproved.

33. Ld. counsel for the petitioner has cited the

judgment of the Supreme Court in Shri Ishar Alloy Steels Ltd.

Vs. Jayaswals Neco Ltd. (2001) 3 SCC 609 (Paras 9 & 10) has,

inter-alia, held that:-

"9. ... The bank" referred to in clause (a) to the proviso to Section 138 of the Act would mean 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.

10. ... The payee of the cheque has the 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 drawee or payee bank on which the cheque is drawn within the period of six months from the date on which it is shown to have been issued. In other words a cheque issued by (A) in favour of (B) drawn in a bank named (C) where the drawer has an account can be presented by the payee to the bank upon which it is drawn i.e. (C) bank within a period of six months or present it to any other bank for collection of the cheque amount provided such other bank including the collecting bank presents the cheque for collection to (C) bank. The non-presentation of the cheque to the drawee bank within the period specified in the section would absolve the person issuing the cheque of his criminal liability under Section 138 of the Act, who shall otherwise may be liable to pay the cheque amount to the payee in a civil action initiated under the law. A combined reading of Sections 3, 72 and 138 of the Act would leave no doubt in our mind that the law mandates the cheque to be presented at the bank on which it is drawn if the drawer is to be held criminally liable. Such presentation is necessarily to be made within six months at the bank on which the cheque is drawn, whether

presented personally or through another bank, namely, the collecting bank of the payee."

The Hon‟ble Supreme Court clearly states that the

cheque must be presented to the Bank at which it is drawn.

Again the said Judgement does not mention the branch of

the Bank on which cheque is drawn.

34. This Court in the case of Shroff Publisher &

Distributors Pvt. Ltd. & Ors. Vs Springer India Pvt. Ltd. 143

(2007) DLT 661 has held that:-

"19. A combined reading of Sections 3, 72 and 138 of the Act leaves no doubt that the law mandates the cheque to be presented at the bank on which it is drawn if the drawer is to be held criminally liable."

Again this Court has held that the presentation of the

cheque has to be at the Customer‟s Bank i.e. Drawee Bank

and there is no mention of branch of the drawee bank by this

Court.

35. As submitted in the Core Banking System which is

being adopted by all the banks in the country in accordance

with the mandate of the Reserve Bank of India, if the

Account Payee outstation Cheque is tendered by the

Customer to its bank at New Delhi then the same is sent by

the Collecting Bank (Petitioner/Complainant‟s Bank) to the

Clearing House of the RBI which sends the cheque to the

Service Branch of the Drawee Bank at New Delhi and if the

drawer of the cheque has the requisite amount in its account

it is cleared there itself and if the account does not have the

requisite amount for honouring the cheque, the same is

dishonoured. Here, the service branch of the Drawee Bank

at New Delhi has the access to the account of the drawer in

view of interlinking of all the branches all over the country.

If the Collecting Bank has adopted the cheque truncation

system then the cheque is scanned by the collecting bank

and thereafter image of the cheque is transmitted to the

clearing house of the Reserve Bank of India at New Delhi

which sends the image of the cheque to the service branch

of the Drawee Bank at New Delhi and if the drawer of the

cheque has the requisite amount in its account it is cleared

there itself and if the account does not have the requisite

amount for honouring the cheque, the same is dishonoured.

Here the service branch of the Drawee Bank at New Delhi

has the access to the account of the drawer in view of inter-

linking of all the branches all over the country.

36. Similarly, a bearer cheque can be presented to

any branch of the Bank (and not particularly to the branch

where the drawer has the account) and the said cheque will

be honoured by the said branch of the Bank if the customer‟s

account has the sufficient amount to honour the said

cheque, since all the branches are inter-linked.

37. Therefore, the concept of base branch which was

there as a facilitator has altogether vanished. In fact, the

base branch or any other branch does not have any legal

identity of its own other than the Bank.

38. Ld. Counsel further submits, in the present case,

cheque was tendered by the petitioner/complainant to his

bank i.e. Citibank N.A. at New Delhi, where, Citibank through

the clearing house of the RBI presented the cheque to the

Customer Bank i.e. Drawee Bank at New Delhi. The cheque

was dishonoured on presentation on account of insufficient

funds by the respondent/accused bank (Drawee Bank) at

New Delhi. Accordingly, the cheque was returned unpaid by

the Drawee Bank to the petitioner/complainant‟s Bank at

New Delhi. This is evident from the Return Memo of the

respondent/accused bank itself.

39. Thus, it is evident that the cheque was presented

by the petitioner/complainant‟s Bank to the Drawee Bank at

New Delhi through the clearing house of the Reserve Bank of

India and cheque was dishonoured at New Delhi by the

Drawee Bank and thereafter the cheque was returned as

unpaid by the Drawee Bank to the petitioner/complainant‟s

Bank at New Delhi. Therefore, Ld. MM has the jurisdiction to

try the present case under Section 138 of the NI Act and

take cognizance of the offence mentioned in the complaints

and issue summons to the Respondent/Accused accordingly.

40. Now, I will deal with third question.

III) Whether the Court at Delhi has a jurisdiction to try the cases under Section 138 on account of issuance of statutory notice under Section 138 of NI Act to the Respondent/Accused from New Delhi by the Petitioner/ Complainant in view of the Judgement of Supreme Court in the case of K. Bhaskaran (supra) in spite of the

Judgement of the Supreme Court in the case of M/s.Harman Electronics (supra)?

41. The Supreme Court in the case of K. Bhaskaran

(supra) has held that the Court would have jurisdiction to try

the case under Section 138 NI Act over a place from where

legal notice is issued to the customer demanding a payment

of the dishonoured cheque under Section 138 of NI Act apart

from places where other components of the offence has

taken place namely

(i) drawing of cheque;

(ii) presentation of the cheque to the bank,

(iii) returning of the cheque unpaid by the

Drawee bank;

(iv) failure of the drawer to make payment within

15 days of the receipt of the notice.

42. The judgement of K. Bhaskaran(supra) has been

reiterated by the division bench of the Hon‟ble Supreme

Court in the case of Smt. Shamshad Begum (supra).

43. However, the division bench of the Supreme

Court in M/s.Harman Electronics (supra) gave a contrary

judgement to that of K. Bhaskaran (supra) and Shamshad

Begum (supra) and held that the Court would not have

jurisdiction over the place from where legal notice is issued

to the customer demanding payment of the dishonoured

cheque under Section 138 of NI Act.

44. However, even on the issue of place of issuance

of legal notice, the decision of the Supreme Court in

K.Bhaskaran (supra) is still the law of the land since it has

not been over-ruled by a larger bench of Supreme Court in

view of the doctrine of „binding precedent‟ and the judgment

of the constitution bench of the Supreme Court in Central

Board of Dawoodi Bohra (supra), which has held that law laid

down by the Supreme Court in a decision delivered by a

bench of larger strength is binding on any subsequent bench

of lesser or co-equal strength. The same has been reiterated

by the Constitution Bench of the apex Court in Union of India

& Anr. Vs. Raghubir Singh 1989 (2) SCC 754.

45. Accordingly, where there was conflict of

judgements in between two Supreme Court judgements

delivered by a bench of the same strength, the Supreme

Court followed the earlier judgement in preference to the

later judgement in the cases of Babu Parasu Kaikadi (dead)

by Lrs. Vs. Babu (2004) 1 SCC 681 (paras 14 & 18), Indian Oil

Corporation Ltd. Vs. Municipal Corporation & Anr. 1995 (4)

SCC 96 (Paras 3 & 8), Union of India & Ors. Vs. Godfrey

Philips India Ltd. 1985 (4) SCC 369 (Para 12) and

Commissioner of Sales Tax, J&K & Anr. Vs. Pine Chemicals

Ltd. & Ors. 1995 (1) SCC 58 (Para 10).

46. Similarly, Division Bench of this Court in the case

of Virender Kumar @ Bittoo Vs State as reported in 59 (1995)

DLT 341 (DB) (Paras 29, 31, 33 & 34) held that;

"In case there is a conflict of judgments in between the two Supreme Court judgements cited above, then law is settled that a Bench having same Judge strength cannot over-rule the earlier judgment given by the same Bench strength."

and accordingly followed the earlier judgement of the

Supreme Court in rendering the decision.

47. The Supreme Court in K. Bhaskaran (supra) has

held that the Court has the jurisdiction over a place from

where legal notice is issued to the customer demanding

payment of the dishonoured cheque under Section 138 of NI

Act, to try the case under Section 138 of the NI Act on the

premise that whatever be the endorsement on the returned

envelope containing the notice or acknowledgement due

card, the receipt of the notice will be presumed in view of

Section 27 of the General Clauses Act. But the learned

judges who decided the M/s.Harman Electronics (supra) case

differed with the K. Bhaskaran‟s (supra) on this point of the

presumption of the receipt of the notice and held that,

receipt of notice cannot be presumed to give the place from

where notice has been issued a jurisdiction to try the cases

under Section 138 NI Act. However, the bench of three

judges of the Supreme Court in C.C. Alavi Haji Vs. Palapety

Muhammed & Anr. (2007) 6 SCC 555 (Paras 2, 3, 5, 10, 15,

17 & 19) reiterated the views of K. Bhaskaran (Supra) on this

point of presumption with regard to receipt of notice. The

said judgement of Alavi Haji (supra) was not brought to the

notice of the division bench who decided M/s.Harman

Electronics (supra) In view thereof, the judgement of

M/s.Harman Electronics (supra) is judgement per in curium

and does not lay down the law.

48. Be that as it may, the bench comprising of three

judges of the apex Court in the case of Union of India & Ors.

Vs. Godfrey Philips India Ltd. (1985) 4 SCC 369 (Para 12) has

held that it is difficult to understand how a division bench in

Jit Ram (1981) 1 SCC 11 could possibly overturn or disagree

with what was said by another division bench in Motilal

Sugar Mills (1979) 2 SCC 409 which was decided earlier. If

the division bench in Jit Ram case found themselves unable

to agree with the law laid down in Motilal Sugar Mills case,

they could have referred Jit Ram case to a larger bench but it

was not right on their part to express their disagreement

with enunciation of the law by a coordinate bench of the

same court in Motilal Sugar Mills.

49. It is pertinent to mention here that the Supreme

Court in the case of Indian Oil Corporation Ltd. Vs. Municipal

Corporation & Anr. (1995) 4 SCC 96 (Paras 3 & 8) has held

that a earlier decision of the Supreme Court cannot be

overruled even by a co-equal bench of that court and

therefore the division bench of the High Court acted total

misunderstanding of the law of the precedents and Article

141 of the Constitution in relying upon the subsequent

decision of the Supreme Court.

50. Thus, the Division Bench which decided Harman

(supra) case had the liberty to doubt the correctness of the

view taken by Division Bench which decided K.Bhaskaran‟s

case, but they were under the duty to place the matter

before the Chief Justice to constitute a larger bench and

further decide the issue. As pointed out earlier, the issue on

which they differed with K. Bhaskaran (supra) has been

decided by a larger bench of three judges in Alavi Haji‟s

(supra), which reiterated the earlier view of

K.Bhaskaran(supra).

51. The real issue which this Court is confronted with

is, whether, to follow the earlier decision of the Apex Court

as decided in the case of K. Bhaskaran (supra) or the later

decision of Supreme Court as decided in the case of

M/s.Harman Electronics (supra)?

52. In my opinion, the earlier decision of the Apex

Court in K. Bhaskaran(supra) is to be followed since it is the

law of the land as it has not been overruled till date by the

larger bench of the Supreme Court in view of doctrine of

„binding precedent‟ and decision of the Constitution Bench of

the Supreme Court in the case of Central Board of Dawoodi

Bohra Community (supra) (para 12) and the decisions of the

Supreme Court in the case of Indian Oil Corporation Ltd. Vs.

Municipal Corporation & Anr. (supra); Babu Parasu Kaikadi

(supra) (paras 14 & 18); in the case of Union of India & Ors.

(supra) (Para 12); Commissioner of Sales Tax, J&K &

Ors.(supra) (Paras 10, 13, 17) and the Division Bench of this

Court in the case of Virender Kumar @ Bittoo (supra) (Paras

29-34).

53. The Division Bench of this Court in the case of

Rakhi Rughwani & Ors. Vs. Union of India & Ors. 144 (2007)

DLT 443 (DB) (Para 8) has held that "... Be that as it may, it

is entirely unarguable that where a Supreme Court judgment

is available it must be followed in its true tenor regardless of

the pronouncement of Benches of the High Court."

54. Accordingly, the judgement of Supreme Court in

K. Bhaskaran(supra) ought to be followed regardless of the

contrary pronouncements made by the various benches of

the High Court in the cases namely (a) M/s Mahika

Enterprises & Anr. Vs. State (NCT of Delhi & Anr.) judgement

dated 01.10.2010 passed in Crl. M.C. 1988/2010, (b) V.S.

Thakur Vs. State of NCT of Delhi & Anr. (Delhi) 2010 (1) JCC

(NI) 40, (c) Som Sugandh Industries Ltd. & Anr. II (2010) DLT

(Crl.) 475, (d) Online IT Shoppe India Pvt. Ltd. & Ors. vs.

State & Anr. 2010 (1) JCC (NI) 27. It may be pointed out that

none of these judgements take into consideration the

aforesaid Order dated 03.11.2009 passed by the Apex Court.

55. Further this Court in Prakash Industries Ltd. Vs.

State & Ors. 106 (2003) DLT 527 (Para 5) has held that "... It

is well settled principle and should be known to one and all

that any law laid down by Hon‟ble Supreme Court is, unless

reversed or reviewed, binding on all the Courts in India

including the High Courts. Mere reference by a Judge for

reviewing the existing law to a larger Bench does not and

cannot take away the binding effect of the earlier decision of

the Supreme Court." Accordingly, the judgement of Supreme

Court in of K. Bhaskaran (supra) ought to be followed

regardless of the contrary pronouncements of the benches of

the High Court.

56. Thus, in order to give a brief review of what has

been discussed above:-

1) 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.

2) 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.

3) 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).

4) Learned Metropolitan Magistrates are precluded

from returning/dismissing the complaints In view of

the order dated 03.11.2009 passed by the Supreme

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 based solely on the acts done as

set out in para (22) hereinabove.

57. In K. Bhaskaran (supra) referred to the above-

referred five components which constitute offence under

Section 138 NI Act, if these 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 offence. In Shamshad Begum (supra) the

Apex Court relied on its decision by applying Special Leave in

K.Bhaskaran (supra) and referred five components

enumerated in that decision, it was held that it is not

necessary that all the five acts should have perpetuated in

the same locality and was possible that each of these acts

could have been done at five different localities though in

concatenation of all these five acts is sine quo non for

completion of the offence. Further, in 2008 in M/s.Harman

Electronics (supra) the Apex Court held that issuance of

notice would not by itself give rise to the cause of action, but

communication of the notice would give. The Apex Court

was of the view that for constituting offence under Section

138 NI Act, the notice must be received by the accused

though, it is deemed to have been received in certain

situation. Finally, in 2009 Delhi High Court Legal Services

Committee (supra) the decision applies only to those cases

where the complainant invokes jurisdiction of Delhi Courts

solely on the ground that notice of demand was issued from

Delhi despite the fact that it was served outside Delhi. The

said judgment has been challenged in SLP NO. 29044/2009

titled as Vinay Kumar Shailendra Vs. Delhi High Court Legal

Services Committee Anr. wherein the Supreme Court vide

order dated 03.11.2009 has directed to maintain status qua

until further order. Hence, it is crystal to say that, keeping in

view the „doctrine of precedent‟, the judgment delivered by

the Division Bench of the Apex Court in K.Bhaskaran (supra)

is still binding, as till date no larger Bench of the Apex Court

has altered or reviewed the said judgment qua territorial

jurisdiction.

58. Thus, ld.MM has the power and jurisdiction to

entertain the present complaints and take cognizance of the

offence mentioned in the complaints and issue summons to

the respondent/accused accordingly.

59. I make it clear that earlier in a case it was

directed to return the complaint with liberty to file it at

Kolkata. The decision in that case was taken on the

submission of learned counsel for respondent that he had

„no objection‟, if that case transferred to Kolkata, since the

respondent had branch office of the company over there.

60. Accordingly, Crl. Revision Petition No.170/2010 is

allowed and the impugned order dated 30.03.2010 passed

by ld.MM is set aside.

61. The complaint is restored to its number and

stage.

62. In view of above, Criminal M.A.No.4840/2010 is

rendered infructuous.

63. Accordingly, petitioner is directed to appear

before the Trial Court on 19.09.2011 at 02:00 PM for

directions.

64. The Registrar General of this Court is directed to

send a copy of this judgment to all District Judges for

circulation among the Officers of DJS and DHJS.

SURESH KAIT, J

September 09th 2011 Mk