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2009(1) Bankmann 312 (SC)
SUPREME COURT OF INDIA
S.B. Sinha and Cyriac Joseph JJ.
M/s. Harman Electronics (P.) Ltd.
and Another —Appellants
versus
M/s. National Panasonic India
Ltd. —Respondent
Criminal Appeal No. 2021 of 2008
Decided on 12.12.2008
Counsel for the Parties:
For the Petitioner:Mr. Ashok Grover, Advocate.
For the Respondent:Mr. Sakesh Kumar, Advocate.
Headnote:Negotiable Instruments Act, 1881—Section 138—Criminal Procedure Code, 1973—Section 177 and 178—Offence of cheque bouncing—Territorial jurisdiction of court to try offence—Parties carrying business at Chandigarh had business transactions in Chandigarh—Cheque was issued and presented at Chandigarh—Dishonour of cheque took place at Chandigarh—Whether sending of notice from Delhi itself could give rise to a cause of action for taking cognizance under the Act? No.
Held: 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 (c) 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 (c) of the proviso to Section 138 therefore must be read together. Issuance communication of the notice would. (Para 14)
Presumption raised in support of service of notice would depend upon the facts and circumstances of each case. Its application is on the question of law or the fact obtaining. Presumption has to be raised not on the hypothesis or surmises but if the foundational facts are laid down therefor. Only because presumption of service of notice is possible to be raised at the trial, the same by itself may not be a ground to hold that the distinction between giving of notice and service of notice ceases to exist.
Indisputably all statutes deserves their strict application, but while doing so the cardinal principles therefor cannot be lost sight of. 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. A distinction must also be borne in mind between the ingredient of an offence and commission of a part of the offence. 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 completes. Giving of notice, thereof, cannot have any precedent over the service. It is only from that view of the matter in Dalmia Cement Bharat Ltd. v. Galaxy Traders & Agencies Ltd., (2001 (6) SCC 463, emphasis has been laid on service of notice.
We cannot, as things stand today, be obvious of the fact that a banking institution holding several cheques signed by the same borrower cannot only present the cheque for its encashment at four different places but also may serve notices from four different places so as to enable it to file four complaint cases at four different places. This only causes grave harassment to the accused. It is, therefore, necessary in a case of this nature to strike a balance between the right of the complainant and the right of an accused vis-a-vis the provisions of the Code of Criminal Procedure.
Learned Counsel for the respondent contends that the principle that the debtor must seek the creditor should be applied in a case of this nature.
We regret that such a principle cannot be applied in a criminal case. Jurisdiction of the Court to try a criminal case is governed by the provisions of the Criminal Procedure Code and not on common law principle.
For the views we have taken it must be held that Delhi High Court has no jurisdiction to try the case. We, however, while exercising our jurisdiction under Article 142 of the Constitution of India direct that Complaint Case No.1549 pending in the Court of Shri N.K. Kaushik, Additional Sessions Judge, New Delhi, be transferred to the Court of the District and Sessions Judge, Chandigarh who shall assign the same to a Court of competent jurisdiction. (Paras 23 to 28)
Result: Appeal allowed.
S.B. Sinha, J. — Leave granted.
2. Territorial jurisdiction of a Court to try an offence under Section 138 of the Negotiable Instruments Act, 1881 (for short, “the Act”) is in question in this appeal.
3. The said question arose in the following circumstances. Appellants and respondent entered into a business transaction. Appellant is a resident of Chandigarh. He carries on business in Chandigarh. The cheque in question admittedly was issued at Chandigarh. Complainant also has a branch office at Chandigarh although his Head Office is said to be at Delhi. It is stated that the cheque was presented at Chandigarh. However, it is in dispute as to whether the said cheque was sent for collection to Delhi. The cheque was dishonoured also at Chandigarh. However, the complainant respondent issued a notice upon the appellant asking him to pay the amount from New Delhi. Admittedly, the said notice was served upon the respondent at Chandigarh. On failure on the part of the appellant to pay the amount within a period of 15 days from the date of communication of the said letter, a complaint petition was filed at Delhi. In the complaint petition, it was stated:
“10. That the complainant presented aforesaid cheque for encashment through its banker Citi Bank NA. The Punjab and Sind Bank, the banker of the accused returned the said cheque unpaid with an endorsement “Payment stopped by drawer” vide their memo dated 30.12.2000. The aforesaid memo dated 30.12.2000 was received by the complainant on 3.1.2001.
11. Upon dishonour of the above mentioned cheque, the complainant sent notice dated 11.1.2001 in terms of Section 138 of Negotiable Instruments Act to the accused persons demanding payment of aforesaid cheque amount at Delhi. The accused persons were served with said notice by registered A/D.
12. By the said notice the accused persons were called upon to pay to the complainant the sum of Rs. 5,00,000 within 15 days of the receipt of said notice.
13. Despite the service of notice dated 11.1.2001 the accused persons have failed and/or neglected to pay amount of aforesaid cheque within the stipulated period of 15 days after the service of the notice.
14. Accused persons clandestinely/deliberately and with mala fide intention and by failing to make the payment of the said dishonoured cheque within the stipulated period have committed the offence under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881.
15. The complainant further submit that the complaint is being filed within one month from the date of expiring of the 15 days grace time given under the notice for payment of said amount;
16. This Hon’ble Court has jurisdiction to entertain the present complaint as complainant carries on its business at Delhi. The demand notice dated 1l.1.2001 was issued from Delhi and the amount of cheque was payable at Delhi and because accused failed to make the payment of amount of said cheque within statutory period of 15 days from receipt of notice.”
Cognizance of the offence was taken against the appellant by the learned Judge.
Questioning the jurisdiction of the Court of Additional Sessions Judge, New Delhi, an application was filed which was disposed off by the learned Additional Sessions Judge, New Delhi in terms of an order dated 3.2.2003 stating:
“2. The main grievance of the accused is that the accused persons, as well as the complainant are carrying their business at Chandigarh. The cheque in question was given by the accused to the complainant in Chandigarh, and it was present to their banker at Chandigarh. Only notice was given by the complainant to the accused persons, from Delhi. That the same was served on the accused admittedly, at Chandigarh and that both the parties are carrying out their business also at Chandigarh. Therefore, it is contended that it would amount to absurdity if the complaint of the complainant is entertained, in Delhi, in view of the case law reported in A.I.R. 1999 S.C. 3782, K.
