Crl.Misc.No.M-21589 of 2009 1 IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH. Crl.Misc.No. M-21589 of 2009 Date of decision: 17.11.2009 Atul Nayyar ... Petitioner versus Satish Kumar Garg ... Respondent CORAM: HON'BLE MR. JUSTICE JORA SINGH. Present: Mr.Ashok Jindal, Advocate, for the petitioner. None for the respondent. ... JORA SINGH, J. Atul Nayyar filed this petition under Section 482 Cr.P.C. for quashing of the order dated 1.5.2009 passed by Additional Sessions Judge (Ad-hoc), Fast Track Court, Mansa, order dated 31.1.2008 passed by JMIC, Mansa, and the complaint under Section 138 of the Negotiable Instruments Act, 1881 (for short `the Act’). Satish Kumar filed complaint under Section 138 of the Act against Atul Nayyar (Annexure P-1) on the allegation that petitioner Atul Nayyar had borrowed a sum of Rs.1,90,000/- vide Demand Draft dated 9.2.2004 drawn at State Bank of Patiala, Main Branch, Mansa, from the complainant, with an undertaking to return the amount with interest @ 1.5% per month. To discharge legal liability, Cheque No.515609 dated 14.2.2006 for Rs.2,59,000/- drawn at Haryana State Co-operative Apex Bank, Ltd., Sector 15-D, Chandigarh, was issued. Crl.Misc.No.M-21589 of 2009 2 Cheque dated 14.2.2006 was presented on 15.2.2006 at Bank of Punjab, Sector 35-C, Chandigarh. Cheque was forwarded to the banker of the accused. But by the time the cheque was received by the banker of the accused, the accused had already stopped payment of the above said cheque. Banker of the accused failed to remit the payment of the cheque to the banker of the complainant and returned the cheque without encashment with remarks “payment stopped by drawer”. Banker of the complainant had returned the cheque in question with memo to the complainant on 17.2.2006. Complainant had issued legal notice dated 13.3.2006 from Mansa directing the accused to make payment of the cheque in question within 15 days from the receipt of notice, but accused failed to make the payment within the stipulated period. Ultimately, complaint under Section 138 of the Act (Annexure P-1) was instituted. Accused moved an application dated 3.10.2007 for dismissal of the complaint on the ground of jurisdiction, but ultimately, the application was dismissed vide order dated 31.1.2008 (Annexure P-2). Against the order dated 31.1.2008, revision was instituted but vide order dated 1.5.2009 (Annexure P-3), revision was also dismissed. Feeling dissatisfied with the order dated 1.5.2009, present petition under Section 482 Cr.P.C. was instituted. Learned counsel for the petitioner-accused argued that cheque in question dated 14.2.2006 alleged to have been issued by the petitioner- accused was drawn at Haryana State Co-operative Apex Bank, Ltd., Sector 15-D, Chandigarh. Cheque was in favor of the respondent-complainant. Respondent-complainant had presented the cheque at the Bank of Punjab, Crl.Misc.No.M-21589 of 2009 3 Sector 35-C, Chandigarh. Court at Chandigarh has the jurisdiction. According to the respondent, legal notice dated 13.3.2006 was issued from Mansa but by issuing the notice from Mansa, Mansa Court has no jurisdiction to entertain the complaint under Section 138 of the Act. Reliance has been placed on 2009(1) PLR 525, M/s Harman Electronics (P) Ltd. and another vs. M/s National Panasonic India Ltd.. Learned counsel for the respondent argued that the respondent is a resident of Mansa. Payment of Rs.1,90,000/- vide demand draft dated 9.2.2004 was made at Mansa. Legal notice after the cheque in question was dishonoured was also issued from Mansa. Complaint under Section 138 of the Act was maintainable at Mansa. Trial Court as well as the first Revisional Court rightly opined that the Court at Mansa has the jurisdiction to entertain the complaint under Section 138 of the Act. From the pleadings of the parties, one thing is clear that demand draft dated 9.2.2004 worth Rs.1,90,000/- issued by the respondent- complainant was drawn at State Bank of Patiala, Main Branch, Mansa. Payment was to be returned with interest @ 1.5% per month. To discharge legal liability, cheque in question dated 14.2.2006 for Rs.2,59,200/- was issued by the petitioner-accused. But the cheque in question was drawn at Haryana State Co-operative Apex Bank, Ltd., Sector 15-D, Chandigarh. Petitioner had an account in the above said bank. Cheque in question was presented by the respondent on 15.2.2006 at Bank of Punjab, Sector 35-C, Chandigarh. Respondent had an account in the Bank of Punjab, Sector 35-C, Chandigarh. Cheque was sent to the banker of the petitioner, but the same was dishonoured with remarks “payment stopped by drawer”. Crl.Misc.No.M-21589 of 2009 4 Now the point in dispute is whether the Court at Mansa has the jurisdiction to entertain the complaint or not. According to the respondent, legal notice dated 13.3.2006 was issued from Mansa. Vide demand draft worth Rs.1,90,000/-, drawn at State Bank of Patiala, Bain Branch, Mansa, payment was made to the petitioner. But by issuing legal notice from Mansa, after the cheque was dishonoured, the Court at Mansa has no jurisdiction, because the cheque in question issued by the petitioner was drawn at Haryana State Co-operative Apex Bank, Ltd., Sector 15-D, Chandigarh. Secondly, cheque was presented by the respondent on 15.2.2006 at Bank of Punjab, Sector 35-C, Chandigarh. But unfortunately, the cheque was dishonoured. In M/s Harman Electronics (P) Ltd.'s case (supra), Hon'ble Supreme Court held that jurisdiction to try a criminal case is governed by the provisions of Criminal Procedure Code and not on common law principle. Hon'ble Supreme Court observed as under:- “2. Territorial jurisdiction of a court to try an offence under Section 138 of the Negotiable Instruments Act, 1881 (for short “the Act”) is in question in this appeal. The said question arose in the following circumstances. Appellants and respondent entered into a business transaction. Appellant is a resident of Chandigarh. He carries on business in Chandigarh. The cheque in question admittedly was issued at Chandigarh. Complainant also has a branch office at Chandigarh although his Head Office is said to be at Delhi. It is stated that the cheque was presented at Chandigarh. However, it is in dispute Crl.Misc.No.M-21589 of 2009 5 as to whether the said cheque was sent for collection to Delhi. The cheque was dishonoured also at Chandigarh. However, the complainant-respondent issued a notice upon the appellant asking him to pay the amount from New Delhi. Admittedly, the said notice was served upon the respondent at Chandigarh. On failure on the part of the appellant to pay the amount within a period of 15 days from the date of communication of the said letter a complaint petition was filed at Delhi. In the complaint petition, it was stated: “10. That the complainant presented aforesaid cheque for encashment through its banker Citi Bank NA. The Punjab & Sind Bank, the banker of the accused, returned the said cheque unpaid with an endorsement “Payment stopped by drawer” vide their memo dated 30.12.2000. The aforesaid memo dated 30.12.2000 was received by the complainant on 3.1.2001. 11. Upon dishonour of the above mentioned cheque, the complainant sent notice dt. 11.1.2001 in terms of Section 138 of Negotiable Instruments Act to the accused persons demanding payment of aforesaid cheque amount at Delhi. The accused persons were served with said notice by registered A/D. 12. By the said notice the accused persons were called upon to pay to the complainant the sum of Rs.5,00,000/- within 15 days of the receipt of said notice. 13. Despite the service of notice dt. 11.1.2001 the Crl.Misc.No.M-21589 of 2009 6 accused persons have failed and/or neglected to pay amount of aforesaid cheque within the stipulated period of 15 days after the service of the notice.” In the above cited case, an application was filed questioning the jurisdiction of the Court of Additional Sessions Judge, New Delhi, and the same was disposed of by stating as under:- “2. The main grievance of the accused is that the accused persons, as well as the complainant are carrying their business at Chandigarh. The cheque in question was given by the accused to the complainant in Chandigarh, and it was presented to their banker at Chandigarh. Only notice was given by the complainant to the accused persons, from Delhi. That the same was served on the accused admittedly, at Chandigarh and that both the parties are carrying out their business also at Chandigarh. Therefore, it is contended that it would amount to absurdity if the complaint of the complainant is entertained, in Delhi, in view of the case law reported in AIR 1999 Supreme Court 3782, K.Bhaskaran V. Sankaran Vaidyyan Balan and another. 6. I have considered the arguments advanced at the bar, and I am of the considered opinion that this court has jurisdiction to entertain this complaint, as admittedly the notice was sent by the complainant to the accused persons from Delhi, and the complainant is having its registered office at Delhi, and that they are carrying out the business at Delhi. Admittedly, it is also evident from the record that accused allegedly failed to Crl.Misc.No.M-21589 of 2009 7 make the payment at Delhi, as the demand was made from Delhi and the payment was to be made to the complainant at Delhi.” Facts of the above cited judgment are fully applicable to the facts of the present case, because cheque in question dated 14.2.2006 issued by the petitioner was drawn at Haryana State Co-operative Apex Bank, Ltd., Sector 15-D, Chandigarh. Cheque was presented by the respondent on 15.2.2006 at Bank of Punjab, Sector 35-C, Chandigarh, but the cheque was not honoured. In the present case, respondent is the resident of District Mansa. Legal notice was issued from Mansa. Contention of learned counsel for the respondent is that the Court at Mansa has the jurisdiction but if by issuing the notice from Mansa, Mansa Court has the jurisdiction, then by issuing a notice from Bombay or Calcutta, question is whether the Court at Bombay or Calcutta has the jurisdiction to entertain the complaint. Cheque in question was drawn at Haryana State Co-operative Apex Bank, Ltd., Sector 15-D, Chandigarh. Cheque was presented by the respondent at Bank of Punjab, Sector 35-C, Chandigarh. Cheque was returned unpaid by the drawee bank. After that, legal notice was issued from Mansa. In para No.6 of the complaint, allegation of the respondent is that cause of action arose in his favour of the complainant and against the petitioner on 14.2.2006 when the cheque in question was issued and on 17.2.2006 when the banker of the complainant returned the said cheque without encashed along with memo and also on 13.3.2006 when legal notice was served upon the petitioner- accused. Not a word in the complaint whether legal notice issued from Crl.Misc.No.M-21589 of 2009 8 Mansa was received by the petitioner or not, whether legal notice was received back unserved or with report of refusal or for want of complete address. Section 138 of the Act reads as under:- “138. Dishonour of cheque for insufficiency etc. of funds in the account.- 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 of the amount of money standing to the credit of that account is insufficient to honour the cheque or that 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 other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of Crl.Misc.No.M-21589 of 2009 9 the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and ( c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.- For the purposes of this section “debt or other liability” means a legally enforceable debt or other liability.” In paras No.14, 20, 25 and 28 of the above cited authority, Hon'ble Supreme Court has further held as under:- “14. It is one thing to say that sending of a notice is one of the ingredients for maintaining the complaint but it is another thing to say that dishonour of a cheque by itself constitutes an offence. For purpose of proving its case that the accused had committed an offence under Section 138 of the Negotiable Instruments Act, the ingredients thereof are required to be proved. What would constitute an offence is stated in the main provision. The proviso appended thereto, however, imposes certain further conditions which are required to be fulfilled before congnizance of the offence can be taken. If the ingredients for constitution of the offence laid down in the provisos (a), (b) and (c ) appended to Section 138 of the Negotiable Instruments Act intended to be applied in favour of the accused, there cannot be any doubt that receipt of a notice would ultimately give rise to the cause of action for filing a Crl.Misc.No.M-21589 of 2009 10 complaint. As it is only on receipt of notice the accused at his own peril may refuse to pay the amount. Clauses (b) and ( c) of the proviso to Section 138 therefore must be read together. Issuance of notice would not by itself give rise to a cause of action but communication of the notice would. xxx xxx xxx 20. Therefore, the place where an offence has been committed plays an important role. It is one thing to say that a presumption is raised that notice is served but it is another thing to say that service of notice may not be held to be of any significance or may be held to be wholly unnecessary. xxx xxx xxx 25. We cannot, as things stand today, be oblivious of the fact that a banking institution holding several cheques signed by the same borrower cannot only present the cheque for its encashment at four different places but also may serve notices from four different places so as to enable it to file four complaint cases at four different places. This only causes grave harassment to the accused. It is, therefore, necessary in a case of this nature to strike a balance between the right of the complainant and the right of an accused vis-a-vis the provisions of the Code of Criminal Procedure. xxx xxx xxx 28. For the views we have taken it must be held that Delhi High Court has no jurisdiction to try the case. We, however, while exercising our jurisdiction under Article 142 of the Crl.Misc.No.M-21589 of 2009 11 Constitution of India direct that complaint Case No.1549 pending in the Court of Sh.N.K.Kaushik, Additional Sessions Judge, New Delhi, be transferred to the Court of the District and Sessions Judge, Chandigarh. The transferee court shall fix a specific date of hearing and shall not grant any adjournment on the date on which the complainant and its witnesses are present. The transferee court is further more directed to dispose of the matter within a period of six months from the date of receipt of the records of the case on assignment by the learned District and Sessions Judge, Chandigarh.” In view of the above cited authority, I am of the opinion that learned JMIC and learned Additional Sessions Judge (Ad-hoc), Fast Track Court, Mansa, failed to appreciate legal and factual position. Both the Courts below opined that with the issuance of legal notice from Mansa, particularly when demand draft was drawn at Mansa, the Court at Mansa has the jurisdiction to entertain the complaint. But in view of the latest authority of Hon'ble Supreme Court cited above, I am of the opinion that the Court at Mansa has no jurisdiction. In the light of above discussion, impugned order dated 1.5.2009 (Annexure P-3) passed by Additional Sessions Judge (Ad-hoc), Fast Track Court, Mansa, and order dated 31.1.2008 (Annexure P-2) passed by JMIC, Mansa, are set aside. Complaint under Section 138 of the Act (Annexure P-1) pending in the Court of JMIC, Mansa, while exercising powers under Section 407 Cr.P.C., is withdrawn from the Court of Mansa, and is transferred to the Court of District & Sessions Judge, Chandigarh. District & Sessions Judge, Chandigarh, is to assign the same to the Court of Crl.Misc.No.M-21589 of 2009 12 competent jurisdiction. The transferee Court is to dispose of the complaint as per law. The petition is allowed. 17.11.2009 ( JORA SINGH ) pk JUDGE