The main legal point established in the judgment is that the cause of action for the offence under Section 138 of the NI Act must arise within the jurisdiction of the Court where the complaint is filed.

1. By this petition the Petitioner seeks quashing of the complaint No. 1459/2006 pending before the Learned Metropolitan Magistrate filed by the Respondent for offence under Section 138 Negotiable Instruments Act (in short „NI Act.).

2. Learned counsel for the Petitioner contends that the Learned Metropolitan Magistrate, Karkardooma Court at Delhi has no jurisdiction to try the present complaint as no part of cause of action has taken place at Delhi. The business transaction between the parties was entered into at Kolkata where the Respondent/Complainant has its office. In the course of business transaction the Petitioner by letter dated 4th August, 1998 issued 5 undated blank account payee cheques bearing Nos. 352300, 352801, 352302, 352803 and 352804 drawn on the Oriental Bank of Commerce, Salt Lake Branch, Kolkata payable at Kolkata in favour of the Respondent. One of the cheque being cheque No. 352800 for Rs.3,00,000/- was encashed. The Petitioner replaced the other four cheques by cheque Nos. 561894, 561895, 561898 and 561899 due to expiry of their validity vide letter dated 23rd April, 1999 and requested the Respondent to return the said four cheques. However, despite number of communications the Respondent failed to return the same. Further the Petitioner also intimated the Respondent about the closure of the account. Even then the Respondent with mala-fide intention presented cheque No. 352803 for Rs.15,00,000/- for encashment on 3rd May, 2004 after six years of its issuance and closure of the account of the Petitioner and thus the same got dishonoured resulting in filing of the abovementioned complaint.

3. The grievance of the Petitioner is that the Respondent is dragging the Petitioner into litigation in different parts of the country and has filed another complaint in the Court of First Munsif Judicial Magistrate, Sri Nagar in respect of another cheque bearing No. 352801. It is contended that there is no averment in the complaint relating to the accrual of the cause of action at Delhi and thus the order of the learned Metropolitan Magistrate dated 26th June, 2004 taking cognizance of offence and issuing summons to the Petitioner be set aside due to lack of jurisdiction.

4. Learned counsel for the Respondent on the other hand contends that the Court at Delhi has jurisdiction to entertain the complaint as the parties entered into an agreement and as per Clause 34 of the agreement, it was provided that the agreement shall be considered as having been executed at Delhi. It was further agreed that in case of a dispute arising, the same shall be litigated at the Courts at Delhi and shall be considered according to the law for the time being in force in Delhi. This Clause was further amended vide letter dated 21st October, 2002 wherein it was agreed that the dispute shall be referred for adjudication by arbitration in the first instance and the venue of arbitration shall be exclusively at Delhi. It is further contended that no commercial transaction between the Petitioner and the Respondent was carried out in Kolkata. The contract between the parties was signed at Delhi. The cheques in question were handed over to the Respondent at Delhi. The order of goods for consideration of which these cheques were given was made from Delhi. The said cheques were presented at Delhi. The legal notice was sent from Delhi. Thus, the Court at Delhi has territorial jurisdiction to try the offences.

5. I have heard learned counsels for the parties.

6. The issue of territorial jurisdiction under Section 138 NI Act was considered by the Hon.ble Supreme Court in K. Bhaskaran Vs. Shankaran Vaidhyam Balan & Anr (1999) 7 SCC 510. The Hon.ble Supreme Court observed that the following 5 acts are essential to constitute an offence under Section 138 of the NI Act and if these five different acts were done in five different localities, any one of the Courts exercising jurisdiction in one of the five local areas can become the place of trial for of