The main legal point established in the judgment is that the Court where the cheque is deposited for collection has jurisdiction to try the accused under Section 138 of the Negotiable Instruments Act. Additionally, the judgment clarified the requirements for inquiry or investigation by the Metropolitan Magistrate under Section 202 Cr.P.C.

1. The petitioners have challenged two summoning orders dated 19th October, 2010 (in Crl.M.C. 1829/2012) and dated 22nd December, 2010 (in Crl.M.C. 3360/2012) passed by learned Metropolitan Magistrate in a complaints under Section 138 of the Negotiable Instruments Act instituted by the respondent.

2. The brief relevant facts relating to this case are as under:-

(i) The Petitioner Company availed loan of Rs.1248 lacs from the respondent for setting up a 3.75 MW Wind Farm Project on the terms and conditions contained in loan agreement dated 20th July, 2005.

(ii) The Petitioners issued three cheques bearing no. 341538 dated 30th June, 2010 of Rs. 52 lacs (in Crl.M.C. 1829/2012) and cheque bearing Nos.341547 dated 30th June, 2011 of Rs.3,11,145/- and 341548 dated 30th June, 2011 of Rs. 52 lacs (in Crl.M.C. 3660/2012) drawn on Karur Vysya Bank, Burra Bazar, Kolkata to the respondent towards the repayment of the aforesaid loan and dues under the aforesaid loan agreement.

(iii) The complainant deposited the above mentioned cheques in HDFC Bank, Delhi. However, all the cheques were dishonoured due to ‘insufficient funds’ whereupon the complainant issued notices dated 20th August, 2010 and 18th August, 2011 and thereafter, instituted two complaints under Section 138 of Negotiable Instruments Act at Delhi.

(iv) The complainant led the evidence by way of affidavit as Ex.CW1/J (in Crl.M.C. 1829/2012) and Ex.CW-1/X (in Crl.M.C. 3660/2012) in which the complainant proved the Board Resolution as Ex.CW1/A, cheques, notice and the postal receipts/acknowledgement card as Ex.CW1/B to CW1/G.

(v) The learned Metropolitan Magistrate examined the pre-summoning evidence and thereafter, took cognizance of the offences under Section 138 of the Negotiable

Instruments Act and issued the summons to the accused vide orders dated 19th October, 2010 in Crl.M.C. 1829/2012 and dated 22nd December, 2011 in Crl.M.C. 3660/2012, which are under challenge.

3. The petitioners have challenged the summoning orders on two grounds. The first ground of challenge is that the Delhi Court does not have the territorial jurisdiction as the petitioners are residing at Kolkata and the cheques in question were also drawn on the Bank at Calcutta. The second ground of challenge is that the learned Metropolitan Magistrate has not conducted any inquiry or investigation in terms of Section 202 Cr.P.C.

Territorial Jurisdiction

4. The law with respect to the territorial jurisdiction of the Court under Section 138 of the Negotiable Instruments Act has been set at rest by the Supreme Court in Nishant Aggarwal v. Kailash Kumar Sharma, 2012 (7) SCALE 753 in which the Supreme Court, after considering Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd. (2001) 3 SCC 609 and Harman Electronics Private Limited v. National Panasonic India Pvt. Ltd., (2009) 1 SCC 720, held that the Court where the cheque is deposited for collection, has jurisdiction to try the accused under Section 138 of Negotiable Instruments Act in terms of the principles laid down in K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510. The Supreme Court held that the issue of territorial jurisdiction of the Courts did not even arise for consideration in Shri Ishar Alloy Steels Ltd.(supra), and therefore it does not affect the ratio in K. Bhaskaran (supra). The Supreme Court further observed that in Harman Electronics Private Limited (supra), the Court held that a notice of dishonor under Section 138 of Negotiable Instruments Act alone would not confer the jurisdiction to try the accused at the place of issuance of the notice. However, the Supreme Court did not deviate from the other principles laid down in K. Bhaskaran (supra). In Nishant Aggarwal (supra), the Supreme Court re-affirmed the jurisdiction of the Court where the cheque is presented for collection in terms of K. Bhaskaran (supra). The relevant portion of the said judgment is reproduced hereunder:

“2. The question which has to be decided in th