Criminal Writ Petition No.4090 of 2012

10th July, 2013

Petitioner Counsel: Mr. D.S. HATLE, Mr. DEEPAK JAMSANDEKAR
Respondent Counsel: Mr. N.M. NADAR, Mr. R.B. WADHWANI, Ms. M.R. TIDE

Cases Cited:
M/s. Harman Electronics (P) Ltd. & Anr. Vs. M/s. National Panasonic India Ltd., 2009 ALL MR (Cri) 280 (S.C.) =AIR 2009 SC 1168 [Para 5,9]
K. Bhaskaran Vs. Sankaran Vaidhyan Balan & Anr., 1999(4) ALL MR 452 (S.C.) =(1999) 7 SCC 510 [Para 6,8]
K. Bhaskaran Vs. Sankaran Vaidhyan Balan & Anr., 1999 ALL MR (Cri) 1845 (S.C.)=(1999) 7 SCC 510 [Para 6,8]
Nishant Aggarwal Vs. Kailash Kumar Sharma, 2013 ALL SCR 2531=Criminal Appeal No.808/2013 [Para 10]
Preetha S. Babu Vs. Voltas Ltd., 2010 ALL MR (Cri) 1025 =2010(3) Mh.L.J.234 [Para 11,12]

JUDGMENT

JUDGMENT :- Rule. Returnable forthwith. By consent, heard forthwith finally.

The petitioner herein is the original complainant in Complaint bearing Summary Criminal Complaint No.1407 of 2009. The respondent herein is the accused in the said complaint. By an order dated 16.9.2010, the learned Judicial Magistrate, First Class, Thane, was pleased to dismiss the complaint on the ground that the Court had no jurisdiction to try the said case.

2. The petitioner, being aggrieved by the said order, filed a Revision Application bearing No.219 of 2010. The learned Sessions Judge, Thane, vide order dated 3.8.2012 was pleased to dismiss the revision. Hence, the petitioner has filed the present petition seeking the relief of setting aside the order passed by the Revisional Court thereby upholding the order of dismissal passed by the learned Judicial Magistrate, First Class, Thane.

3. The facts of the case are that respondent No.1 is the proprietor of M/s. K.N. Engineering Company. The respondent had placed an order with the petitioner-Company for different kinds of glasses. The petitioner-Company had despatched the goods ordered, which were received by the respondent No.1 under various Excise invoices. The payment towards the said purchase for the period 23.8.2006 to 7.2.2009 was to the tune of Rs.2,80,842.68. The respondent No.1 had issued two cheques towards the said payment, cheque No.002708 dated 28.8.2008 was issued for a sum of Rs.1,00,000/-, whereas the cheque No.002709 dated 28.9.2008 was for a sum of Rs.1,87,856/-. The petitioner had presented the said cheques for encashment to Corporation Bank, Airoli, Navi Mumbai. Both the cheques were dishonoured vide Memo dated 23.1.2009 for the reason "Funds insufficient". The petitioner had issued a statutory tonotice the respondent on 4.2.2009 through his Advocate, whose office is situated at Thane. The Advocate, who had issued the notice on behalf of the present petitioner, had called upon the respondent to pay the legally enforceable debt to him. The petitioner then filed a complaint before the Judicial Magistrate, First Class, Thane, which was egistered as C.C. No.1407/2009. The respondent herein had raised a preliminary objection in respect of the jurisdiction of the said Court to try the case. The said complaint below Exhibit 10 was allowed by the Magistrate. The principal contention of the petitioner is that the Court at Thane had jurisdiction to try the said case since the notice was issued from Thane.

4. The learned Counsel appearing for the petitioner has drawn attention of this Court to paragraph 6 of the statutory notice issued by the Advocate Shri B.S. Hatale dated 4.2.2009. It is specifically contended in the notice as follows :-

"In the premise aforesaid, I have been instructed by my client to call upon you, which I hereby do, to pay to my client or to me in my capacity as their Advocate, the said sum of Rs.2,87,856/- collectively within a period of fifteen days from the receipt hereof. Your non-compliance hereto would mean that, the offence on your part, as provided under the provisions of Section 138 of the Negotiable Instruments Act, is completed."

The learned Counsel for the petitioner further submits that the said notice was received by the accused on 12.2.2009. The notice was sent by registered Post and the acknowledgment would show that the accused had received the notice on or about 12.2.2009. The complaint was filed on 25.3.2009.

5. In the case of M/s. Harman Electronics (P) Ltd. & Anr. vs. M/s. National Panasonic India Ltd. reported in AIR 2009 SC 1168 : [2009 ALL MR (Cri) 280 (S.C.)], the Hon'ble Apex Court has held as under :-

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

In the present case, communication of the notice has given rise to a cause of action and, therefore, the Court at Thane would get the jurisdiction to try the said complaint.

6. In the case of K. Bhaskaran vs. Sankaran Vaidhyan Balan & Anr. (1999) 7 SCC 510 : [1999(4) ALL MR 452 (S.C.) : 1999 ALL MR (Cri) 1845 (S.C.)], the Hon'ble Apex Court has held that "the offence under Section 138 of N.I. Act would not be completed with the dishonour of the cheque. It attains completion only with the failure of the drawer of the cheque to pay the cheque amount within the expiry of 15 days mentioned in clause © of the proviso to Section 138 of the Act. It is normally difficult to fix up a particular locality as the place of failure to pay the amount covered by the cheque. A place, for that purpose, would depend upon a variety of factors. It can either be at the place where the drawer resides or at the place where the payee resides or at the place where either of them carries on business."

7. The Counsel for the petitioner states that in the present case, the statutory demand notice issued by the complainant had called upon the accused to pay the legally enforceable debt to the Advocate, who resides at Thane. It is contended that there was a mutual understanding between the complainant-company and his Advocate that the amount could be given to the Advocate who would receive the same on behalf of the complainant-company. The payee in the present case was authorized by the complainant-company to receive the said amount.

8. In the case of K. Bhaskaran, [1999(4) ALL MR 452 (S.C.) : 1999 ALL MR (Cri) 1845 (S.C.)] (cited supra), it has been held that "the offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. The following are the acts which are components of the said offence : (1) drawing of the cheque, (2) presentation of the cheque to the bank, (3) returning the cheque unpaid by the drawee bank, (4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, (5) failure of the drawer to make payment within 15 days of the receipt of the notice." It 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 N.I. Act. 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. 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."

9. In the case of Harman Electronics, [2009 ALL MR (Cri) 280 (S.C.)] (cited supra), the Hon'ble apex Court has held that "A Court derives a jurisdiction only when the cause of action arose within his jurisdiction. The same cannot be conferred by any act of omission or commission on the part of the accused. While issuance of a notice by the holder of a negotiable instrument is necessary, service thereof is also imperative. Only on a service of such notice and failure on the part of the accused to pay the demanded amount within a period of 15 days thereafter, commission of an offence completes."

10. In the case of Nishant Aggarwal Vs. Kailash Kumar Sharma (Criminal Appeal No. 808 of 2013) : [2013 ALL SCR 2531], the Hon'ble Apex Court has held that "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." It is further held that "the amplitude of territorial jurisdiction pertaining to a complaint under the N.I. Act is very wide and expansive". It is further held that "the place of failure to pay the amount has been clearly qualified by this Court as the place where the drawer resides or the place where the payee resides." In the present case, the Advocate representing the complainant had called upon the accused-respondent to pay the amount to him and hence the place where the amount was to be paid and that it was not paid pursuant to the notice within 15 days from the date of the communication of the said notice would have the territorial jurisdiction to try the case. The complainant therefore derived jurisdiction to file a complaint at Thane. In similar facts of the case, the Hon'ble Apex Court in the case of Nishant Aggarwal, [2013 ALL SCR 2531] (cited supra), has held that the amount of cheque was payable at Delhi and the accused failed to make payment of the said cheque within the statutory period of 15 days from the date of receipt of notice. The cognizance of the offence was taken by the learned Magistrate at Delhi. The accused had questioned the jurisdiction of the Magistrate at Delhi. The Hon'ble Apex Court reiterated that the five different acts which are the components of offence under Section 138 of the N.I. Act 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 N.I. Act and the complainant would be at liberty to file a complaint at any of those places.

11. In the case of Preetha S. Babu vs. Voltas Ltd. 2010 (3) Mh.L.J.234 : [2010 ALL MR (Cri) 1025], the Hon'ble Division Bench of this Court has observed thus:-

"9. It is necessary to see how the Supreme Court proceeded to deal with the question of jurisdiction. The Supreme Court referred to Chapter 13 of the Code of Criminal Procedure, 1973 (for short, "the Code") which pertains to jurisdiction of the criminal Courts in inquiries and trials. The Supreme Court referred to section 177 of the Code which says that "every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed." The Supreme Court observed that section 177 has been framed by the legislature thoughtfully by using the precautionary word 'ordinarily' to indicate that the rule is not invariable in all cases. The Supreme Court then referred to section 178 of the Code which pertains to place of inquiry or trial. It was observed that section 178 suggests that if there is uncertainty a to where, among different localities, the offence would have been committed, the trial can be had in a Court having jurisdiction over any of those localities. The Supreme Court observed that this provision has further widened the scope by stating that in case where the offence was committed partly in one local area and partly in another local area, the Court in either of the localities can exercise jurisdiction to try the case. The Supreme Court then turned to section 179 of the Code and observed that section 179 of the Code stretches its scope to a wider horizon. Section 179 of the Code states that when an act is an offence by reason of anything which has been done and of a consequence which has ensued, the offence may be inquired into or tried by a Court within whose local jurisdiction such thing has been done or such consequence has ensued. Therefore, the Court within whose local jurisdiction the consequences ensue can also have jurisdiction to try that offence. The Supreme Court cautioned that the above provisions of the Code must be borne in mind when the question regarding territorial jurisdiction of the Court to try the offence is to be determined."

12. Taking into consideration the observations of the Hon'ble Division Bench of this Court in the case of Preetha S.Babu, [2010 ALL MR (Cri) 1025] (cited supra), the Petition deserves to be allowed. In the facts of the present case, it is held that the Judicial Magistrate, First Class, Thane, has jurisdiction to try the said case. Summary Criminal Case No.1407 of 2009 is, therefore, remanded to the Court of the Judicial Magistrate, First Class, Thane. The learned Magistrate shall try the complaint in accordance with law and make an endeavour to dispose of the same within six months from the date of receipt of a copy of this Judgment.

Rule is made absolute in the above terms. Petition stands disposed of.

Petition allowed.