IMPORTANT POINT
In complaint for offence u/s. /38 Negotiable Instruments Act, the cause of action as contemplated in Section 142 of the Act arises at the place where the drawer of the cheque fails to make payment of money and it can be a place where the bank to which the cheque was issued is located and the place where cheque was issued or delivered.

K. P. Balanarayana Marar, J. - Revision is directed against the order of Judicial Magistrate of First Class. Mannarkkad finding that the court has jurisdiction to try the offence alleged against revision petitioner.

2. A cheque is alleged to have been issued by revision petitioner to first respondent towards amount due to him. On presentation the cheque was dishonoured by the bank. First respondent issued notice and demanded the money but the amount was not paid inspite of that notice and that resulted in the complaint under Section 138 of the Negotiable Instruments Act (hereafter referred as Act) before the Judicial Magistrate of First Class, Mannarkkad.

3. Revision petitioner questioned the maintainability of the complaint before that court for the reason that the cheque was issued at Thodupuzha, outside the jurisdiction of the Mannarkkad Court and that the Mannarkkad Court has no territorial jurisdiction.

The Court below by order dated 28.9.1991 repelled the contentions of revision petitioner and held that it has jurisdiction. Hence the revision.

4. Sections 138 to 142 of the Negotiable Instruments Act (Act 26 of 1981) were introduced by Section 4 of the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988. Under these provisions if a person issues a cheque for the discharge of any debt or other liability and if it is dishonoured for lack of funds or if it exceeds the arrangements made with the bank, he will be deemed to have committed an offence and will be punished with imprisonment for a term which may extend to one year or with fine which may go up to twice the amount of the cheque or both. But in order to constitute the said offence such cheque should have been presented to the bank within a period of six months of the date of its drawal or within a period of its validity whichever is earlier and the payee or holder in due course of such cheque should have made a demand for the payment of the said amount by giving a notice in writing to the drawer of the cheque within 15 days of receipt of information by him from the bank regarding the return of the cheque unpaid and the drawer of such cheque had failed to make the payment within 15 days of the receipt of the said notice. It is provided under Section 139 that it shall be presumed unless the contrary is proved that the holder of the cheque received the cheque in discharge in whole or in part of any debt or other liability. Section 142 provides that no court shall take cognizance of any offence punishable under Section 138 except upon a complaint in writing made by the payee or as the case may be the holder in due course of cheque and such complaint is made within one month of the date on which the cause of action arises under Clause (c) of the proviso to Section 138. The said clause reads:

'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 from the receipt of the said notice."

5. The cause of action is, therefore, the nonpayment of the money to the payee within 15 days of receipt of notice by which demand for payment of the said money was made. That demand has to be made under Clause (b) of the proviso to Section 138. A Division Bench of this court in Prithviraj v. Mathew Koshy1 held that the act of issuing a cheque cannot be considered as starting point of the commission of offence. It was further held that dishonour of cheque by itself does not give rise to a cause of action because payment can be made on receipt of notice of demand contemplated in Clause (b) of Section i 38 and in that event there is no offence, nor any attempt to commit the offence, nor even a preparation to commit the offence. It was held that failure to pay the amount within 15 days of receipt of notice alone is cause of action and nothing else.

6. Where is the amount payable? Is it at the place where the creditor resides or the p