The offence under Section 138 of the NI Act is complete only when the drawer fails to make payment within 15 days of receiving the notice, and the territorial jurisdiction lies where the creditor's office is situated.

1. This criminal miscellaneous u/S. 482 of the Code of Criminal Procedure has been brought by M/s Ess Bee Food Specialities, Village Saidpura (near Dera Bassi), District Patiala, petitioner-1 through its Managing Partner Baljinder Singh, Petitioner-2 and partner Jagpal Singh, petitioner 3 for quashing of the complaint dated 22-12-1989, Annexure P1 u/S. 138 of the Negotiable Instruments Act (for short the Act) and S. 406/470, IPC, the subsequent proceedings and the impugned orders, Annexures P2 and P3.

2. The impugned complaint was brought by M/s Kapoor Brothers Roller Flour Mills, Panchkula (respondent firm herein) u/S 138 of the Act, read with Ss. 406/420, IPC. The respondent-firm pleaded therein that it was a registered partnership-firm, carrying on business of running a flour mill. It supplies flourmill products. In December 1988, petitioner 2 approached the respondent-firm for the supply of Maida on regular basis, on credit and this offer was accepted. It was agreed that the payment shall be made within 10 days of the date of supply of the Maida as per the bill. Interest at the rate of 23% per annum was to be charged if the payment was not made within the stipulated period of 10 days. The supplies were then made. The transactions were entered in the daily sales register and the Ledger Book maintained. A running account was opened and payments were made though irregularly. As per the account books, a balance of Rs.1,24,640.00 stood due to the respondent firm from the petitioner-firm. Some of the cheques issued were dishonoured and ultimately, a registered notice was issued on 24-10-1989, but, in spite of the same, and the information being delivered of dishonouring of the cheques, the payment was not made. A meeting was then arranged. Baljinder Singh, petitioner-2 issued two cheques, one dated 2-11-1989 for Rupees 15,900/- and the second dated 9-11-1989 for Rs. 11,000.00 as part payment. These cheques were drawn on Punjab National Bank, Sector 17B, Chandigarh with the assurance that the same would be encashed on presentation to the Bank. These cheques were then presented, but were received back with the endorsement "refer to drawer". After receiving the information of the dishonouring of the cheques, a legal notice dated 25-11-1989 was issued. Two of the notices were received back undelivered, while one was delivered to Baljinder Singh petitioner-2. In spite of this service of notice, payment in question was not made and as such, the offence u/S. 138 of the Act was committed. From the very beginning, the intentions of the petitioners were dishonest and as such, offences u/Ss. 406/420, IPC had also been committed.

3. The learned Magistrate issued process u/S. 138 of the Act. A revision was then preferred to the Court of Session which was heard by the Addl. Sessions Judge, Ambala who, vide order dated 14-7-1990, dismissed the same.

4. The petitioner-firm challenges the orders of the Magistrate and of the Addl. Sessions Judge on the ground that the Court at Ambala had no territorial jurisdiction to try the case since the cheques were issued and dishonoured at Chandigarh. The petitioners are carrying on their business at Chandigarh. If any offence was committed, it was within the jurisdiction of the Chandigarh Court. Statutory notice u/S. 138 of the Act had also not been served and as such, no complaint was maintainable, and the criminal proceedings had been brought with the intention of harassment and humiliation to the petitioner-firm.

5. To appreciate the arguments of the learned counsel, the following provisions of the Act may be quoted :

"Section 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. S.138. Dishonour of cheque for insufficiency, etc., of funds in the account. - Where any cheque drawn by a per