IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 26.10.2010 CORAM: THE HONOURABLE MR.JUSTICE P.R.SHIVAKUMAR CRL.O.P.Nos.20946, 20991 and 20992 of 2007 and M.P.Nos.1+1+1 of 2007 1.Pale Horse Designs No.20, Locust Street Suite 105, Danvers, Essex County, Massachusetts Represented by its President Ms.Karen Chansky 2.Ms.Karen Chansky Hamilton, Essex County, Massachusetts United States of America .. Petitioners in all Crl.O.Ps. Vs. Natarajan Rathnam No.3, Parkway Drive, Roselyn Heights, New York .. Respondent in all Crl.O.Ps. PRAYER: Criminal Original Petition filed under Section 482 Cr.P.C. to call for the records in C.C.Nos.1506, 1507 and 1505 of 2007 on the file of IX Metropolitan Magistrate, Saidapet, Chennai and quash the criminal proceedings. For Petitioners: Mr.R.Amizhdu for all Crl Ops Mr.S.Sashi Kumar For Respondent : Mr.V.P.Sengottuvel all Crl Ops COMMON ORDER The parties in all the three criminal original petitions are same. The first petitioner M/s.Pale Horse Designs is a company https://hcservices.ecourts.gov.in/hcservices/ registered in the United States of America of which the second petitioner is the president. Natarajan Rathnam, who figures as the respondent in all the three criminal original petitions, is a Non- Resident Indian living in the United States of America at No.3, Parkway Drive, Roselyn Heights, New York. 2. Natarajan Rathnam, the respondent herein, furnishing a local address in Chennai, namely No.37, Venkatarathinam Nagar, Adyar, Chennai as his residential address, has preferred three complaints on the file of the IX Metropolitan Magistrate, Saidapet, Chennai under Section 200 Cr.P.C for alleged offences punishable under Sections 138 and 141 of the Negotiable Instruments Act, 1881 in respect of seven dishonoured cheques drawn on M/s.Danvers Savings Bank, One Conant Street, Danvers, MA 01923 in favour of the respondent herein. In respect of two cheques dated 15.06.2006 bearing cheque Nos.002661 and 002663, each for a sum of US$ 5000, totalling a sum of US$ 10,000, the respondent preferred a separate complaint and the same has been taken on file by the above said IX Metropolitan Magistrate as C.C.No.1506/2007. The said cheques had been presented for collection through the banker of the respondent, namely M/s.ICICI Bank Limited, Anna Nagar, Chennai-102 on 09.08.2006 and the same were dishonoured for the reason "stop payment" instructions were issued by the drawer. The said fact of dishonour of the cheques, according to the averments found in the complaint, was intimated to the respondent on 23.08.2006 by memo of the bank dated 21.08.2006 and the original cheques were also returned with a memo dated 25.08.2006. After issuing a legal notice dated 19.09.2006, which was received by the petitioners on 28.09.2006, the respondent preferred the complaint on 31.10.2006 alleging commission of the offences punishable under Sections 138 and 141 of the Negotiable Instruments Act, 1881, since within the time allowed by the said Act after the receipt of the statutory notice, the petitioners/accused did not make payment of the amount covered by the cheques. 3. With similar averments regarding two more cheques dated 15.02.2006 and 15.04.2006 respectively, bearing cheque Nos.002647 and 002649, each one drawn for a sum of US$ 5000, which were also presented for collection through ICICI Bank Limited, 3rd Avenue, Anna Nagar, Chennai and returned by the bankers for the reason "stop payment" instructions had been given and contending similar allegations, another complaint was preferred on the very same day, namely 31.10.2006 and the same was taken on file by the IX Metropolitan Magistrate, Saidapet as C.C.No.1505/2007. 4. The third complaint was also preferred on the very same day by the respondent herein in respect of three more cheques drawn on 15.03.2006, 15.04.2006 and 15.05.2006 bearing cheque Nos.002658, 002659 and 002660 respectively, each one for a sum of US$ 5000, which were also presented for collection through the very same bank https://hcservices.ecourts.gov.in/hcservices/ and dishonoured for the very same reason. The said complaint was taken on file as C.C.No.1507/2007. 5. In all the three complaints uniform averments have been made to the effect that the said cheques drawn on Danvers Savings Bank, One Conant Street, Danvers, MA 01923 were issued in favour of the respondent herein/complainant in discharge of a liability in part of the petitioners herein towards the respondent herein/complainant. Since the said complaints were taken on file and registered as calendar cases on the file of the IX Metropolitan Magistrate, Saidapet, Chennai and the said Metropolitan Magistrate has also ordered issuance of summons to the petitioners/accused, pursuant to which summons were served on them in the United States of America, they have come forward with all the three criminal original petitions, invoking the inherent powers of the High Court under Section 482 Cr.P.C, for quashing all the three complaints on the grounds stated in the petitions filed by the petitioners. 6. Crl.O.P.No.20946/2007 is for quashing the complaint in C.C.No.1506/2007. Crl.O.P.No.20991/2007 is for quashing the complaint in C.C.No.1507/2007 and Crl.O.P.No.20992/2007 is for quashing the complaint in C.C.No.1505/2007. The complaints against the petitioners are sought to be quashed invoking the inherent powers of this court under Section 482 Cr.P.C on the following grounds : i)The court below does not have the jurisdiction to entertain the complaint; iii)No offence was committed within the jurisdiction of the court below; v)The entire cause of action arose outside the limits of the territory of India over which the domestic criminal law is made applicable; and vii)The very filing of the complaint in the court below is a glaring example of forum shopping and the complaints preferred before the court below are nothing but examples of abuse of process of court. 7. Along with the criminal original petitions, petitioners had also filed criminal miscellaneous petitions seeking interim stay of further proceedings on the file of the trial court in all the calendar cases concerned in these petitions and this court also granted interim stay of all further proceedings pending further orders. When the miscellaneous petitions came up for hearing, the learned counsel for the petitioners and the respondent expressed their readiness and willingness to make their submissions on the merits of the criminal original petitions for the disposal of the https://hcservices.ecourts.gov.in/hcservices/ criminal OPs, even without a counter being filed. Hence the arguments advanced by Mr.R.Amizhdu representing Mr.S.Sashikumar, learned counsel on record for the petitioners and by Mr.V.P.Sengottuvel, learned counsel for the respondent were heard. The materials placed in the form of typed set of papers by both the parties were also perused. 8. Three calendar cases instituted on private complaints by the respondent herein against the petitioners 1 and 2 herein under Section 200 Cr.P.C for alleged offences in each calendar case under Sections 138 and 141 of the Negotiable Instruments Act, 1881 are challenged in these criminal original petitions on the ground that the court below, without having any jurisdiction to entertain the same and in the absence of jurisdictional facts conferring on the court below, has chosen to take cognizance of the offence on the private complaints and directed issuance of process to the petitioners/accused. As pointed out supra, the criminal proceedings instituted on private complaints are sought to be quashed on the ground of absence of jurisdiction and also on the grounds of forum shopping and abuse of process of court. 9. The learned counsel for the petitioners would contend that none of the petitioners, who have been shown to be the accused, is residing or carrying on business within the jurisdiction of the court below or at least within the territory of India over which the provisions of the Criminal Procedure Code applies; that the cause of action for the complaints did not arise either within the jurisdiction of the trial court or within the territory of India; that the petitioners reside and do business in Danvers, Essex County, Massachusetts, United States of America; that the cheques in question were also issued in the place of the petitioners; that the cheques were drawn payable at the above said place in the United States of America; that admittedly notice demanding payment, after the cheques were returned unpaid, was also served on the petitioners in their address in the United States of America; that therefore the entire cause of action could have arisen only at Danvers, Essex County, Massachusetts, United States of America, to which place, neither the Negotiable Instruments Act, 1881 nor the Criminal Procedure Code, 1873 does have application and that hence the very entertainment of the complaints by the court below is against law and the complaints are liable to be quashed using the inherent powers by this court. 10. It is the further submission made by the learned counsel for the petitioners that, as the cheques having been issued in the United States of America, drawn on a bank in the United States of America and made payable in the United States of America, the mere fact that the cheques were presented in a bank in Chennai in Tamil Nadu, India, for collection, shall not confer jurisdiction on the Judicial Magistrate exercising territorial jurisdiction over the https://hcservices.ecourts.gov.in/hcservices/ place wherein the collecting branch of the said office is situated and that accepting the contention of the respondent court having jurisdiction over the place of the branch of the payee's bank wherein the cheques were presented for collection shall get jurisdiction to entertain the complaint against the drawer, whereas the actual place of drawal of the cheques and the place wherein the cheques were made payable are situated outside the said jurisdiction, to enable unscrupulous litigants to select a forum wherein a particular act is made punishable as an offence and the procedure makes it easy to recover money by having resort to criminal prosecution rather than civil litigation, will amount to encouraging forum shopping and also abuse of process of court. 11. In addition to the above said facts, the learned counsel for the petitioners also pointed out the fact that even the petitioner is a Non-Resident Indian and is having his residence at Essex County, Massachusetts, United States of America and that only in order to prefer the complaint at Chennai, Tamil Nadu, India, he has chosen to present the cheques to a branch of ICICI Bank Limited at Anna Nagar, Chennai-102 for collection and after the cheques were dishonoured by the drawee bank in the United States of America, he has chosen to prefer these complaints against the petitioners, only with a view to cause harassment and thereby coercing them to come to terms with the respondent. Relying on the above said contentions, the learned counsel for the petitioners has submitted that the complaints concerned in all the three criminal original petitions are not maintainable and the learned IX Metropolitan Magistrate, Saidapet, Chennai chose to take cognizance of the complaint and issued process to the petitioners herein without jurisdiction and that hence all the three complaints are liable to be quashed. 12. Per contra, the learned counsel for the respondent would contend that the above said contentions raised on behalf of the petitioners should be rejected as untenable for the simple reason that when a cheque issued anywhere in the the globe is presented in a branch of a bank at a place within the jurisdiction of a Judicial Magistrate or a Metropolitan Magistrate within the State, then for the dishonour of such cheque, the said Judicial Magistrate or the Metropolitan Magistrate, shall no doubt, have jurisdiction to entertain a complaint for an offence punishable under Section 138 or under Section 138 r/w Section 141 of the Negotiable Instruments Act, 1881. It is the further submission of the learned counsel for the respondent that after the dishonour of the cheques in question, the respondent caused a notice to be issued from Chennai, mentioning his address as 37, Venkatarathinam Nagar, Adyar, Chennai-20 and since the reply notice refusing to comply with the demand made in the statutory notice was addressed to the respondent's Chennai address, the learned IX Metropolitan Magistrate, Saidapet does have the jurisdiction to entertain the https://hcservices.ecourts.gov.in/hcservices/ complaint preferred by the respondent; that the summons issued by the court below in all the three cases, cannot be said to be without jurisdiction and that hence the prayer for quashing the complaints should be dismissed. 13. It is an admitted fact that the first petitioner is a company incorporated and registered in the United States of America and the second petitioner is the President of the said company and is a resident of the United States of America. It is nobody's case that either the first petitioner or the second petitioner is a resident of India. It is also not the case of the respondent that the petitioners are doing business or carrying on business in India. It is also the admitted case of the parties, which is also evident from the documents produced by the petitioners in the form of typed set of papers, that the original contract giving rise to the liability of the petitioners to make payment to the respondent arose at New York, United States of America. When a demand Promissory Note dated 27.06.2005 was executed at, and authenticated by a Notary Public on 28.06.2005 at Roselyn Heights, New York. It is also evident from the said document itself that the second petitioner agreed to be a guarantor for the discharge of the liability of the first petitioner and his address is noted as 75, Gregory Island Road, South Hamilton, Massachusetts, United States of America. The said document refers to the issuance of 12 post dated cheques, each for a sum of US$ 5,000 payable in a period of 12 months with the initial payment on 15.08.2005. It is also not in dispute that the cheques in question were issued by the second petitioner on behalf of the first petitioner in the United States of America in respect of an account maintained in the name of the first respondent in its bank, namely Danvers Savings Bank, having its office at One Conant Street, Danvers, MA 01923, United States of America. The cheques were payable only at Danvers, Massachusetts, United States of America. It is not the case of the respondent that the cheques, though payable at Danvers, Massachusetts, United States of America, were issued at Chennai within the jurisdiction of the court below to make a contention that the place of drawal of the cheque will give jurisdiction to the court below to entertain the complaints. On the other hand, admittedly the cheques were issued in the United States of America and they were also made payable in the United States of America. Under such circumstances, this court has to accept the contention of the learned counsel for the petitioners that the respondent cannot unilaterally confer jurisdiction on the trial court by presenting the cheque for collection in a branch of his bank within the jurisdiction of the said court. 14. In this regard, the learned counsel for the petitioners, besides relying on several judgments of various High Courts, has also cited a number of judgments of the Supreme Court. In all those cases, where prosecution for an offence under Section 138 of https://hcservices.ecourts.gov.in/hcservices/ the Negotiable Instruments Act, 1881 was sought to be instituted in a court within the jurisdiction of which the statutory notice was issued, the Hon'ble Supreme Court held that the court within whose jurisdiction the statutory notice originates, shall not have precedence over the place of service of notice or the place of business of the accused or the place wherein the cheque issued was payable. 15. In Shri Ishar Alloy Steels Ltd vs. Jayaswals Neco Limited reported in (2001) 3 SCC 609, a three judge bench of the Hon'ble Supreme Court has held that no doubt the payee of the cheque has the option to present the cheque in any bank including the collecting bank where he has his account, but to attract the criminal liability of the drawer of the cheque such collecting bank is obliged to present the cheque in the drawee bank on which the cheque is drawn within the period of six months from the date on which it is shown to have been issued. It has also made the point clear by citing an illustration. The following are the observations made in the said judgment:- "A cheque issued by (A) in favour of (B) drawn in a bank named (C) where the drawer has an account can be presented by the payee to the bank upon which it is drawn i.e. (C) bank within a period of six months or present it to any other bank for collection of the cheque amount provided such other bank including the collecting bank presents the cheque for collection to the (C) bank. The non presentation of the cheque to the drawee-bank within the period specified in the Section would absolve the person issuing the cheque of his criminal liability under Section 138 of the Act, who shall otherwise may be liable to pay the cheque amount to the payee in a civil action initiated under the law." The Hon'ble Supreme Court in the said case also made the following observations:- "The use of the words "a bank" and "the bank" in the Section is indicator of the intention of the Legislature. The former is indirect article and the latter is pre-fixed by direct article. If the Legislature intended to have the same meanings for "a bank" and "the bank", there was no cause or occasion for mentioning it distinctly and differently by using two different articles. It is worth noticing that the word "banker" in Section 3 of the Act is pre-fixed by the indefinite article "a" and the word "bank" where the cheque is https://hcservices.ecourts.gov.in/hcservices/ intended to be presented under Section 138 is pre- fixed by the definite article "the". The same Section permits a person to issue a cheque on an account maintained by him with "a bank" and makes him liable for criminal prosecution if it is returned by "the bank" unpaid. The payment of the cheque is contemplated by "the bank" meaning thereby where the person issuing the cheque has an account." The following was also the observation made by the Hon'ble Supreme Court in the said judgment:- "A combined reading of Sections 2, 72 and 138 of the Act would leave no doubt in our mind that the law mandates the cheque to be presented at the bank on which it is drawn if the drawer is to be held criminally liable. Such presentation is necessarily to be made within six months at the bank on which the cheque is drawn, whether presented personally or through another bank, namely, the collecting bank of the payee." 16. In M/s.Harman Electronics (P) Ltd. & Anr. v. M/s.National Panasonic India Ltd. reported in AIR 2009 SUPREME COURT 1168, a division bench of the Hon'ble Supreme Court dealt with the question whether the issuance of statutory notice would itself give rise to the cause of action. While dealing with the said question, the Hon'ble Supreme Court held that the place of communication of the statutory notice by itself would give rise to the cause of action to prefer the complaint in a court exercising jurisdiction over the said place and the place of issuance of notice shall not have precedence over the place of service of notice in the matter of selection of jurisdiction. In the said judgment at paragraph 26 and 27, the Hon'ble Supreme Court has made the following observations:- " 26. Learned counsel for the respondent contends that the principle that the debtor must seek the creditor should be applied in a case of this nature. 27. We regret that such a principle cannot be applied in a criminal case. Jurisdiction of the Court to try a criminal case is governed by the provisions of the Criminal Procedure Code and not on common law principle." In the said judgment, referring to earlier judgments of the Supreme Court wherein the scope of Sections 177 and 178 of the Criminal Procedure Code was considered, it was also held as follows:- https://hcservices.ecourts.gov.in/hcservices/ "A court derives a jurisdiction only when the cause of action arose within its jurisdiction. The same cannot be conferred by any act of omission or commission on the part of the accused. A distinction must also be borne in mind between the ingredient of an offence and commission of a part of the offence. While issuance of a notice by the holder of a negotiable instrument is necessary, service thereof is also imperative. Only on a service of such notice and failure on the part of the accused to pay the demanded amount within a period of 15 days, thereafter, commission of an offence completes. Giving of notice, therefore, cannot have any precedent over the service." 17. In Ahuja Nandkishore Dongre v. State of Maharashtra & Anr. reported in 2007 CRI.L.J. 115, Nagpur Bench of Bombay High Court has held that the jurisdiction of the court to entertain the complaint for an offence under Section 138 has to be gathered from the place where money was intended to be paid and that the court at another place within whose jurisdiction cheque was merely presented for realisation cannot be said to have jurisdiction to try the offence. 18. Similarly in Laxmi Travels, Nagpur versus G.E.Countrywide Consumer & Anr. reported in 2006 (5) AIR Bom R 316, Aurangabad Bench of Bombay High Court held that when the cheque was presented and dishonoured at Nagpur and except the fact that issuance of the demand notice was made from Aurangabad, all other transactions took place at Nagpur, the court at Nagpur and not at the court at Aurangabad had jurisdiction to try the offence. 19. On the other hand, the learned counsel for the respondent relies on the judgment of the Hon'ble Supreme Court in K.Bhaskaran versus Sankaran Vaidhyan Balan and Another reported in (1999) 7 Supreme Court Cases 510 and a judgment of a single judge of this court in Trilux Technologies Singapore P. Ltd. and Others v. Boon Technologies reported in (2005) 123 Comp. Cases 551 (Mad) and contends that the trial court very much does have jurisdiction to entertain the complaints preferred by the respondent and that the mere fact that the petitioners reside and carry on business in USA and the drawee bank is at USA will not take away the jurisdiction conferred on the court below when part of the cause of action, namely the issuance of statutory notice intimating the dishonour of cheques and demanding payment of amount covered by the dishonoured cheques, has arisen within the jurisdiction of the said court. The learned counsel for the respondent submits that in the above said case reported in (1999) 7 Supreme Court Cases 510, the Hon'ble https://hcservices.ecourts.gov.in/hcservices/ Supreme Court has held that a complainant can choose any one of the courts having jurisdiction over any one of the local areas in which any one of the five acts constituting the components of the offence took place. Five acts referred to in the said judgment are (i) drawing of the cheque, (ii) presentation of the cheque to the bank; (iii) returning of the cheque unpaid by the drawee bank; (iv) giving of notice in writing to the drawer of the cheque demanding payment of the cheque amount; and (v) failure of the drawer to make payment within 15 days of the receipt of the notice. 20. It must be noticed that a larger bench of the Supreme Court consisting of three Hon'ble Judges in Shri Ishar Alloy Steels Ltd vs. Jayaswals Neco Limited has impliedly overruled the view expressed by the Division Bench of the Supreme Court in K.Bhaskaran versus Sankaran Vaidhyan Balan and Another reported in (1999) 7 Supreme Court Cases 510 by holding that the criminal liability of the drawer of the cheque is attracted only, if the cheque is presented in the drawee bank within the period of six months from the date on which it is shown to have been issued and that it is not enough to have it presented in the collecting bank within the said period of six months. In view of the said judgment of a