1 APPLN 1332/10 TO APPLN 1335/10 AND APPLN NO.1336/10TO APPLN NO.1338/10 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL APPLICATION NO.1332 OF 2010 WITH CRIMINAL APPLICATION NO.1333 OF 2010 WITH CRIMINAL APPLICATION NO.1334 OF 2010 WITH CRIMINAL APPLICATION NO.1335 OF 2010 Mrs. S. Jayanthi Senthil Nathan .... Applicant. V/s Kotak Mahindra Bank Ltd. and Anr. ..... Respondents WITH CRIMINAL APPLICATION NO.1336 OF 2010 WITH CRIMINAL APPLICATION NO.1337 OF 2010 WITH CRIMINAL APPLICATION NO.1338 OF 2010 Mr. (Dr.) M. Senthil Nathan .... Applicant. v/s Kotak Mahindra Bank Ltd. & Anr. ..... Respondents. Mr. N.K. Thakore i/b Mr. Prakash Naik for the applicants. Mr. Jatin P. Shah for Respondent No.1. Mr. P.S. Hingorani, APP for the State. CORAM: V. M. KANADE, J. DATE : 24TH SEPTEMBER, 2010. 2 APPLN 1332/10 TO APPLN 1335/10 AND APPLN NO.1336/10TO APPLN NO.1338/10 P.C.:- 1. Heard the learned Counsel for the Applicants, Respondent No.1 and the learned APP for the State. 2. Applicants have filed these applications for quashing the order of issuance of process passed by the learned Metropolitan Magistrate, 23rd Court, Esplanade, Mumbai on a complaint filed by Respondent No.1 herein for the offence punishable under section 138 of the Negotiable Instruments Act. 3. Respondent No.1 is the original complainant and it is a Banking Company within the meaning of the Banking Regulation Act, 1949 and it is also registered and incorporated under the Companies Act, 1956. According to the complainant, accused had approached the Bank in December, 2007 seeking financial assistance/funding facilities in the form of Term Loan. The complainant – Company agreed to extend the funding facilities in the form of Term Loan to her for an amount of Rs 600 lakhs. A sanction letter dated 5/1/2008 was also given wherein terms and conditions of the said facilities were mentioned. The accused accepted the said terms and conditions and signed on the duplicate copy of the sanction letter. Thereafter, the entire amount of Rs 600 lakhs was disbursed to the accused. 3 APPLN 1332/10 TO APPLN 1335/10 AND APPLN NO.1336/10TO APPLN NO.1338/10 The other documents were also signed and accepted by the accused in favour of the complainant – Company. The accused, however, failed and neglected to pay the installments of the amounts which were due and payable by her. The accused, therefore, issued several “At Par” Cheques in favour of the complainant – Company and assured the complainant that the said cheques would be honoured. Accordingly, three cheques were issued. The first cheque was dated 07/09/2008 for Rs 21,23,200/-, the second cheque was dated 07/10/2008 for Rs 21,06,400/- and the third cheque was dated 07/11/2008 for Rs 20,89,600/-. All these cheques were “At Par” cheques of ABN AMRO Bank. The complainant deposited the said “At Par” cheques in its Account maintained with HDFC Bank Limited, Mumbai Branch. All these cheques were returned dishonoured. A demand notice was sent to the accused. No reply was given by the accused and, thereafter, three complaints were filed on account of dishonour of three cheques. 4. Mr. Thakore, the learned Counsel appearing on behalf of the applicants submitted firstly that the learned Magistrate had not followed the procedure of postponement of the process and holding of separate inquiry as contemplated under section 202 of the Criminal Procedure Code. Secondly, it is submitted that service of demand notice is condition precedent for filing criminal complaint 4 APPLN 1332/10 TO APPLN 1335/10 AND APPLN NO.1336/10TO APPLN NO.1338/10 under section 138 of the Negotiable Instruments Act. It is submitted that the statutory notice which was sent to the accused at her Chennai address returned with the remark “left” and that though the notice was sent by Registered Post A.D. at London Address, the complainant – Company has neither received any intimation from the postal authorities in respect of service of notice, nor received any envelope with the remark “unserved” from the postal authorities. It is submitted that service of notice being one of the statutory requirements, for want of service of notice, the complaint itself was liable to be dismissed. It is submitted that the complainant had failed to prove the service of notice which is a mandatory requirement under the Act and, therefore, the order of issuance of process was liable to be quashed. Thirdly, it is submitted that the Metropolitan Magistrate’s Court did not have jurisdiction to try and decide the case since the cause of action had not arisen within the jurisdiction of this Court. In support of the said submission, the reliance was placed by the learned Counsel for the applicants on the judgment of the Apex Court in Sarav Investment & Financial Consultancy Private Limited and another vs. Llyods Registrar of Shipping Indian Office State Provident Fund and another1 and also in C.C. Alavi Haji vs. Palapetty Muhammed2. Reliance was also placed on the judgment of the Apex Court in Harman 1 (2009) SCC (Cri) 935 2 (2007) 14 sCC 750 5 APPLN 1332/10 TO APPLN 1335/10 AND APPLN NO.1336/10TO APPLN NO.1338/10 Electronics (P) Ltd. & Anr. Vs. National Panasonic (India) Ltd.1 and also on the judgment of Laxmi Travels vs. G.E. Countrywide Consumers and another2. Lastly, it is submitted that the cause of action had arisen at London and, therefore, in view of the provisions of section 188 of the Cr.P.C, since the accused was residing at London, without previous sanction of the Central Government, no offence could be inquired into or tried in India. 5. On the other hand it is submitted by the learned appearing on behalf of Respondent No.1 – original complainant that there was specific averment made in the complaint that the statutory notice dated 05/03/2009 which was posted on 06/03/2009 was deemed to be received by the accused on 11/03/2009. It is submitted that this question being a disputed question of fact, could be decided only at the time of trial. 6. So far as submission of the learned Counsel appearing on behalf of the applicants on the issue of postponement of process under section 202 is concerned, the learned Counsel for Respondent No.1 – complainant relied on the judgment of this Court in Bansilal S. Kabra vs Global Trade Finance Ltd. & Anr.3. He submitted that this Court has held that the said 1 2009 AIR SCW 410 2 2006 ALL MR (Cri) 2482 3 Order of this Court dated 9/7/2010 in Criminal Application No.1344 of 2010 6 APPLN 1332/10 TO APPLN 1335/10 AND APPLN NO.1336/10TO APPLN NO.1338/10 provision is directory and not mandatory. Secondly, it is submitted that the said cheques which were given by the accused were “At Par” cheques and, therefore, in view of the judgment in Ahuja S/o Nandkishore Dongre vs. State of Maharashtra & Anr.1, the said cheques could be deposited at any Branch of HDFC Bank and the complainant had deposited the said cheques in the HDFC Bank, Mumbai Branch. Counsel for the Respondent No.1 also submitted that in view of the judgment in K. Bhaskaran vs. Sankaran Vaidhyan Balan & Anr.2 since the complainant has registered office at Mumbai and the cheques have been deposited in Mumbai, the Mumbai Court has jurisdiction to try and decide the case. 7. So far as the submission of the learned Counsel appearing on behalf of the applicants that the previous sanction of the Central Government is required since the accused is residing at London is concerned, it is submitted by the Counsel for Respondent No.1 that the entire cause of action had arisen in Mumbai and, therefore, provisions of section 188 of the Criminal Procedure Code will not apply to the present case. 8. The learned Counsel appearing on behalf of Respondent No.1 also has given compilation of judgments on which he 1 2006 ALL MR (Cri) 3357 2 1999(4) ALL MR 452 7 APPLN 1332/10 TO APPLN 1335/10 AND APPLN NO.1336/10TO APPLN NO.1338/10 has placed reliance. In my view, it is not necessary to go into the judgments on which reliance is placed by both Counsel since there is no dispute about the ratio of the said judgments. In the present case, however, since the question of service of notice is disputed, accused/applicants will have to prove this fact during trial. The accused/applicants and the complainant will have to establish their respective contentions and, therefore, at this stage, it will not be open for the accused to raise the said issue. So far as the question of inquiry under section 202 is concerned, this Court has held in Bansilal Kabra1 (supra) that the said provision is directory and not mandatory. Further, in my view, provision of section 188 will not apply in the present case since the accused had taken facilities from the complainant – Bank at Mumbai and the entire transaction had taken place in Mumbai and, therefore, merely because the accused is NRI and residing at London, previous approval of the Central Government would not be necessary in such case. There is therefore no merit and substance in the submissions made by the learned Counsel appearing on behalf of the applicants. 9. Applications are dismissed. Hearing of the Trial is expedited. Plea of the applicants is already recorded. The statement of the applicants under section 313 of the Cr.P.C. 1 Order of this Court dated 9/7/2010 in Criminal Application No.1344/10 8 APPLN 1332/10 TO APPLN 1335/10 AND APPLN NO.1336/10TO APPLN NO.1338/10 may be recorded through their advocates, provided that undertaking is given that the applicants will not dispute the correctness of the answers recorded in the statement under section 313 of the Cr.P.C and also correctness of the evidence which is led in their absence. The Trial Court shall follow the procedure laid down under section 313(5) of the Cr.P.C. Applicants, therefore, are exempted from appearing in Trial Court in the aforesaid terms. 10. Counsel for the applicants, however, shall cooperate with the learned Magistrate and if the counsel for the accused does not appear on more than two dates before the learned Magistrate, appropriate orders may be passed including orders for cancellation of exemption granted by this Court. 11. Applications are disposed of in the aforesaid terms. (V.M. KANADE, J.) 9 APPLN 1332/10 TO APPLN 1335/10 AND APPLN NO.1336/10TO APPLN NO.1338/10