The court emphasized the territorial jurisdiction of the court to try the offence under S.138 of the Negotiable Instruments Act and highlighted the presumption under S.118 and S.139 of the Act. It also discussed the requirement of giving notice and the liberal interpretation of provisions relating to giving of notice. Additionally, the court addressed the limitations on the court in imposing fines and the power of the magistrate to award compensation under S.357(3) of the Code.

1. Leave granted

2. This is a case where the complainant and the accused are siblings, being sons of the same parents. They are fighting over a dishonoured cheque. Both must have experienced a roller-coaster ride in this criminal litigation. Fortune favoured the accused in the first round as he scored an acquittal from the trial court, but it favoured the complainant in the next round when the High Court reversed the acquittal and convicted his brother of the offence under S.138 of the Negotiable Instruments Act (for short 'the Act'). Perhaps the accused would have remained quiet by then, but for the sentence of imprisonment (six months) which he has now to undergo besides a fine of rupees one lakh which the High Court has imposed on him. So this time it is the turn of the accused to move and hence he has filed this appeal.

3. We thought that the two brothers would settle their disputes over this cheque case and we granted sufficient opportunity to both. But the battle is destined to continue as the expected settlement eludes like a mirage. We do not know at whose fault the parleys went awry. We cannot but proceed with the case and so we heard the counsel for both.

4. Before dealing with the two main points on which the counsel argued in this Court we may set out the facts in brief. The respondent (who will hereinafter be referred to as the 'complainant') presented a cheque which bears the signature of the appellant (hereinafter referred to as the 'accused') before the Syndicate Bank's branch office at Kayamkulam (Kerala) on 29.1.1993 for encashment. The cheque was for an amount of rupees one lakh. The bank bounced the cheque due to insufficiency of funds in the account of the accused. Complainant then issued notice by registered post in the address of the accused on 2.2.1993. The notice was returned to the complainant on 15.2.1993 with the following endorsements inscribed thereon:

Table:#1

As the postal article remained unclaimed till 15.2.1993 it was returned to the sender with a further endorsement "unclaimed".

5. A complaint was filed by the complainant on 4.3.1993 before the Court of the Judicial Magistrate, 1st Class, Adoor (in Pathanamthitta District in Kerala) against the accused under S.138 of the Act. Among the contentions which the accused raised, one was regarding the territorial jurisdiction of the said Magistrate Court to try the case as the cheque was dishonoured at the Syndicate Bank's Branch Office at Kayamkulam (it is situate in another District in Kerala). Accused denied having issued the cheque although he owned his signature therein. According to the accused, his brother (the complainant) had snatched away some signed blank cheque leaves from his possession and utilised one such cheque leaf for the present case. He also contended that he did not receive any notice from the complainant regarding dishonour of the cheque and hence no cause of action would have arisen in this case. The complaint, according to him is not maintainable on that score also.

6. The complainant examined himself as PW-1 and two more witnesses for the prosecution. ( PW-2 is the Manager of Syndicate Bank's branch office and PW-3 Devarajan who claimed to have seen the accused issuing the cheque at his shop). Accused examined his wife as DW-1.

7. The trail magistrate repelled the defence contention that the cheque leaf was stolen by the complainant. It was held that the cheque leaf was actually issued by the accused to the complainant. However, the magistrate upheld the contention that his court had no territorial jurisdiction to try the case as the cheque was dishonoured by the branch office of the bank situated in a different district. The magistrate further held that as the accused did not receive the notice no cause of action has arisen. As a corollary thereof the magistrate acquitted the accused.

8. The High Court of Kerala, on the appeal preferred by the complainant, set aside the order of acquittal and convicted him and sentence