2013 Supreme(SC) 543

IN THE SUPREME COURT OF INDIA
P. SATHASIVAM AND JAGDISH SINGH KHEHAR, JJ.
Nishant Aggarwal - Appellant(s)
Versus
Kailash Kumar Sharma - Respondent(s)
CRIMINAL APPEAL No. 808 OF 2013 (Arising out of S.L.P. (Crl.) No. 9434 of 2011)
Decided on: 01-07-2013

IMPORTANT POINT
Courts at the place of residence of the payer and the payee have territorial jurisdiction to try the offence under Section 138 of the Negotiable Instruments Act, 1881.

Headnote:(a) Negotiable Instruments Act, 1881, Section 138 - Criminal Procedure Code 1973, Sections 177, 178(d) and 179. Territorial jurisdiction of Court for trying offence under Section 138 of the Negotiable Instrument Act. Following its earlier decision in K. Bhaskaran v. Sankaran Vaidhyan Balan and another, (1999) 7 SCC 510 the Supreme Court held that Courts at the place of residence of the payer and the payee have territorial jurisdiction to try the offence under Section 138 of the Negotiable Instruments Act, 1881.

        The appellant is the Director of M/s Byrni Steel Private Limited and his father Mr. B.L. Aggarwal is the Managing Director of M/s Mechfeb Engineering Industries Private Limited situated at Meghalaya and Guwahati. The respondent was associated with both the abovementioned firms as he used to bring business from various private firms and Government Departments on commission basis. During the course of business the appellant issued a post dated cheque in favour of the respondent for a sum of Rs. 2862700/- in order to discharge his legal enforceable liabilities. When the respondent on 13.8.2009 presented the same for collection through its bankers, viz., Canara Bank, Bhiwani, Haryana, it was returned unpaid on 11.09.2009 due to stop payment by the appellant. When the respondent approached the appellant about dishonour of the same, he was told to present the same again for collection after one month. On 15.10.2009, the respondent again presented the cheque for collection but the same was again returned unpaid on 14.12.2009. After serving the legal notice the respondent on 5.3.2010, filed a complaint before the Court of J.M.I.C., Bhiwani under Section 190 of the Code for taking cognizance of the offence committed by the appellant under Sections 138 and 141 of the N.I. Act. The Judicial Magistrate Bhiwani held that the Court at Bhiwani has no jurisdiction and returned the complaint for prosecution before the proper Court. The respondent filed criminal revision, the Additional Sessions Judge allowed the same. The appellant filed petition under Section 482 Cr. P.C. before the High Court which was dismissed. Hence, the present criminal appeal before the Supreme Court.

        Held, Para 11 of K. Bhaskaran, (1999) 7 SCC 510, clarified the place in the context of territorial jurisdiction as per the fifth component, namely, “failure of the drawer to make payment within 15 days of the receipt.” As rightly pointed out by learned senior counsel for the respondent, 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 view of the same and in the light of the law laid down by this Court in K. Bhaskaran, (1999) 7 SCC 510, we are of the view that the learned Magistrate at Bhiwani has territorial jurisdiction to try the complaint filed by the respondent as the respondent is undisputedly a resident of Bhiwani. Further, in K. Bhaskaran, (supra), while considering the territorial jurisdiction at great length, this Court has concluded that the amplitude of territorial jurisdiction pertaining to a complaint under the N.I. Act is very wide and expansive and we are in entire agreement with the same. (Para 9)

        The undisputed facts in the context of territorial jurisdiction of the learned Magistrate at Bhiwani are that the drawee of the cheque i.e., the respondent/complainant is a resident of Bhiwani. The native village of the respondent, namely, village Barsana is situated in District Bhiwani. The respondent owns ancestral agricultural land at village Barsana, District Bhiwani. It is also asserted that the respondent is running his bank account with Canara Bank, Bhiwani and is also residing at the present address for the last about two decades. In view of the same, it is the claim of the respondent that he bonafidely presented the cheque in his bank at Bhiwani which was further presented to the drawer’s Bank at Guwahati. The cheque was returned uncashed to the respondent’s bank at Bhiwani with the endorsement “payment stopped by drawer”. The respondent received the bounced cheque back from his bank at Bhiwani. Thereafter, the respondent sent a legal notice under Section 138 of the N.I. Act to the appellant from Bhiwani. In turn, the appellant sent a reply to the said notice which the respondent received at Bhiwani. In view of non-payment of the cheque amount, the respondent filed a complaint under Sections 138 and 141 of the N.I. Act before the learned Magistrate at Bhiwani. (Para 7).

        Section 138 has five components, namely,

        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.

        The complainant can choose any one of the five places to file a complaint. (Para 8).