The offence under Section 138 of the Negotiable Instruments Act is deemed to have been committed only when the drawer of the cheque fails to make the payment within 15 days of the receipt of notice, and the court at the place where the creditor has its office has territorial jurisdiction to try the matter.

G.S.Chahal, J.

1. This order will dispose of the present criminal miscellaneous and two others (i.e., Cr. M Nos. 11347-M and 11345-M of 1990) brought under Section 482 of the Code of Criminal Procedure, for quashing the complaint, annexure P-4 (in each case), and the proceedings pending in the Court of the Judicial Magistrate First Class, Kurukshetra. As common questions of law and fact are involved in all of them, I will refer to the facts in the instant case.

2. According to Prem Kumar Goyal, complainant No. 1, Haryana Milk Foods Ltd., Pehowa, complainant No. 2, is a company and he is its adviser duly authorised to initiate proceedings. Accused No. 5, Dany Dairy and Food Engineers Ltd., Saharanpur (the supplier), is a limited company, and accused Nos. 1 to 3 are its directors and accused No. 4 is its manager (accounts).

3. Vide work order dated April 15, 1988, complainant No. 2 entered into a contract with the supplier-company for the supply of evaporator and dryer against payment of Rs. 1,40,00,000. Subsequently, on account of modification in design and supply of these goods, the scope of the order was reduced to Rs. 1,24,00,000. Against the said work order, complainant No. 2 advanced ,Rs. 1,47,43,383.05 for facilitating the manufacture of the goods and their installation and commission according to the committed parameters certified by the Engineers of Damro (USA) and Evapo Dry (U. K.). The contract was to be completed and the plant was to be commissioned by November 15, 1988. The supplier-company, in order to diminish their liability regarding repayment of excess amount received by it, issued cheque No. 300538, dated August 13, 1989, for Rs. 50,000 in favour of complainant No. 2 payable by the Punjab and Sind Bank, Civil Lines, Saharanpur (the bankers of the supplier-company). Complainant No. 2, through its banker, State Bank of Patiala, Saharanpur, presented the said cheque, but it was received back on August 17, 1989, with the remark "refer to drawer" which means non-availability of sufficient funds in the account. This information was supplied by the bankers to complainant No. 2 and, on receipt of that intimation, complainant No. 1, through a registered letter dated August 26, 1989, issued a notice under Section 138(b) of the Negotiable Instruments Act ("the Act" in brief), making a demand for payment of the said amount. This notice was received by accused No. 1, but no payment was made. The accused had, thus, committed an offence under Section 138 of the Act.

4. The challenge is mainly made to the territorial jurisdiction of the court at Kurukshetra, pleading that only the court at Delhi and Saharanpur had the jurisdiction to try the offence. It is also alleged that since M. M. Malik had signed the cheque, only he could be tried for the offence, if any. To appreciate the argument of learned counsel, the following provisions of the Act may be noted :

"30. Liability of drawer.--The drawer of a bill of exchange or cheque is bound, in case of dishonour by the drawee or acceptor thereof, to compensate the holder, provided due notice of dishonour has been given to, or received by, the drawer as hereinafter provided. 138. Dishonour of cheques for insufficiency, etc., of funds in the accounts.--Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because the amount of money standing to the credit of that account is insufficient to honour the cheque or it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any provision of this Act, be punished with imprisonment for a term which may extend to one year or with fine which may extend to twice the amout of the cheque, or with both :