RAJIV SHAKDHER, J

1. This is a petition under Article 227 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as the „Cr.P.C.?) for quashing complaint no. 1177/3 and all proceedings emanating therefrom.

2. The Petitioners are aggrieved by virtue of the fact that vide order dated 06.05.2009, the learned Magistrate has issued summons to them. Before me, the Petitioners have assailed the summoning order on four counts. First, on the ground that the institution of complaint is beyond the period of limitation prescribed under the Negotiable Instruments Act, 1981 (hereinafter referred to as the „N.I. Act?). Second, on the ground that the cheques which are the subject matter of the complaint instituted in the Court below, were given as a security for realisation of payments by Respondent from foreign buyers. The contention being that there was no debt which the Petitioners were required to discharge, as there was no consideration flowing from the Respondent to the Petitioners. The third ground of challenge being that the reason given in the return memo dated 18.02.2009, issued by the Petitioners? bank, being „account frozen?, it would not amount to a dishonour of the cheques in issue, in terms of Section 138 of the N.I. Act. The last ground of challenge, is that the Court below did not have the requisite territorial jurisdiction to entertain the complaint. 3. In order to dispose of this petition, it may be necessary to briefly set out the facts as contained in the complaint:-

3.1 The Respondent/Complainant which is a company registered under the Companies Act, 1956 and a Government undertaking, having its Head Office at New Delhi, entered into an agreement with the Petitioner No.1 for export of pharmaceutical products. For this

purpose, contractual negotiations were held and proposals were received by the Respondent from Petitioner No.1 at its Head Office at New Delhi. The said proposals finally fructified into a formal agreement dated 04.11.2004 (in short “the agreement”). This agreement admittedly was signed and sealed in Mumbai.

3. 2. In terms of the said agreement, certain obligations were undertaken by both the Petitioner No.1 and the Respondent. 3.3 Broadly, a perusal of the agreement would show that it contains recitals to the effect that, Petitioner No.1 has had regular dealings with one Loben Trading Company Pte. Ltd. having its registered office at Singapore for export of pharmaceutical formulations. The Petitioner No.1, in order to avail the advantage of Respondent?s international image and to facilitate a large volume of business, had opted to associate with the Respondent. The recitals in the said agreement go on to state that Respondent had agreed to extend its co-operation to Petitioner No.1 to promote export of pharmaceutical products. The recitals also state that Respondent has offered and Petitioner No. 1 has accepted to manufacture, supply and ship goods to the foreign buyer (described in the agreement as „Loben Trading Company Pte. Ltd.?) on terms and conditions set out in the export orders.

3.4 As per the Respondent/Complainant, the way the agreement is structured, the formalities for procuring the goods, packing, movement, shipment, documentation and realisation of export proceeds was to be monitored by the Petitioner No.1. Petitioner no.1 was responsible for successful execution of export agreement and realisation of proceeds. The agreement envisaged that the Respondent, through its bankers, will present to the foreign buyer, a bill of exchange for „usance period? (90 days D.A.). Simultaneously, on a back to back basis, Respondent would accept a bill of exchange drawn upon it upto „180 days D.A.?. Thus, under the agreement what was envisaged was a back to back arrangement whereby, bills of exchange drawn upon the foreign buyer would have a due date upto a period of 90 days, which would fall on a date prior to the due date on the bills of ex