CRIMINAL MISCELLANEOUS NO.10446 OF 2009 WITH CRIMINAL MISCELLANEOUS NO. 10406 OF 2009 ********** MD.IMRAN, SON OF PEER GULAM, PROPRIETOR OF M/S IMRAN AND CO. HAVIN G OFFICE AT 37/2, PARADE POULTRY MARKET (MURGA MANDI, PARADE), POLICE STATION KOTWALI, KANPUR - 208001 (UTTAR PRADESH) ……………………………………………………………….PETITIONER ( in both cases) VERSUS 1. THE STATE OF BIHAR 2. M/S AMRICON AGROVET (P) LTD., THROUGH ITS MARKETING MANAGER DR. SUBHRADEEP PAUL, 33 SURYA APARTMENT, 3RD FLOOR, FRASER ROAD, PATNA - 800001 …………………………………………………OPPOSITE PARTIES (in both cases) *********************** FOR THE PETITIONER :- MR. ABHAY SHANKAR SINGH, ADVOCATE FOR THE OP NO. 2. :- MR. Y.V.GIRI, SENIOR ADVOCATE MR. NARESH DIKSHIT, ADVOCATE ********** P R E S E N T THE HON'BLE JUSTICE SMT. SHEEMA ALI KHAN Sheema Ali Khan, J. By these two applications, the petitioner who is the proprietor of M/s Imram and Co. having its office at 37/2, Parade Poultry Market, Police Station Kotwali, Kanpur has challenged the order dated 10.03.2008 by which the Judicial Magistrate, Patna has taken cognizance for the offences punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred to as “the Act”) and Section 422 of the Indian Penal Code in Complaint Case Nos. 2364(C) and 2363(C) of 2007 on the ground that the Courts at Patna did 2 not have the territorial jurisdiction to conduct an enquiry and trial at Patna under Section 177 and 178 of the Code of Criminal Procedure. The facts are that the complainant-M/s Amricon Agrovet (P) Ltd. is a registered company under the Companies Act and has its office at Fraser Road, Patna. The company promotes the business of production and selling of poultry feeds. The petitioner no. 1 is the company and the petitioner no. 2 is the proprietor of the company which used to purchase poultry feed from the complainant company. It is said during the course of business, a huge credit became due from the petitioners. When the credit balance reached to a sum of Rs. 7,98,000/-, the complainant asked the petitioner to clear off all the dues. In view of the aforesaid request, the petitioner issued 9 post-dated cheques of State Bank of India, Kanpur branch (which are the subject matter of Complaint Case No. 2363C of 2007) and 4 post-dated cheques of State Bank of India, Kanpur branch (which are the subject matter of complaint case no. 2364C of 2007). The details of the cheques are given in the complaint petition. The complainant deposited the aforesaid cheques in the Punjab National Bank, Birhana Road branch, Kanpur which were dishonored on 18.05.2007 and 24.05.2007 respectively. The complainant thereafter served legal notice on 21.06.2007. It is alleged that after receiving the legal notice, no steps were taken by the 3 petitioner to make payment of the said credit amount, and as such the two complaints cases have been instituted. The petitioners have taken a defence that the legal notice was not sent within one month as provided under Section 122 of the Act and as such the order of cognizance is barred under Section 142 of the Act. It has also been contended that the Court taking cognizance did not have the territorial jurisdiction to enquire and try the said complaint cases. The undisputed facts are that the cheques were issued by the petitioner on various dates with respect to the credit amount. Out of the 13 cheques, 4 cheques were presented for encashment in the Punjab National Bank, Kanpur on 18.05.2007 whereas the rest 9 cheques were presented for encashment on 24.05.2007. When the cheques got dishonored, the complainant sent legal notice on 16.06.2007 with respect to the 4 cheques and 21.06.2007 with respect to the 9 cheques, whereas the complaints were filed on 17.08.2007. It is contended on behalf of the petitioner that he gave a reply to the legal notice which of course is not accepted by the complainant. It is also stated that after the bouncing of the cheques, the petitioner paid a sum of Rs. 5,91,446/- by cash between 16.05.2007 to 24.05.2007 and he has been granted receipts for the said payment. It is said that actually 4 nothing is due to the complainant as after the bouncing of the cheques, the complainant has accepted a sum of Rs. 5,91,446/- as settlement of accounts. The defence on behalf of the petitioner, however, cannot be considered by this Court at this stage of the case. The next contention raised by the learned Counsel for the petitioner is that the case has been filed after a delay and ought to be quashed in lieu of the provisions of Section 142 of the Act. Section 138 of the Act reads as follows:- “138. Dishonour of cheques for insufficiency, etc., of funds in the account.- Where any cheques 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 cheques 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 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 amount of the cheques, or with both: Provided that nothing contained in this section 5 shall apply unless- (a) the cheques 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 cheques, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheques within fifteen days of the receipt of the information by him from the bank regarding the return of the cheques as unpaid; and (c) the drawer of such cheques 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 cheques within fifteen days of the receipt of the said notice.” Section 142 of the Act, on the other hand deals with cognizance of the offence to be taken under Section 138 of the Act, which reads as follows:- 142. Cognizance of offences- Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),- (a) no court shall take cognizance of any offence under Section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheques; (b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to Section 138: Provided that the cognizance of a complaint may 6 be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period. (c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under Section 138. It is, therefore, clear that sub section (b) of Section 142 of the Act provides that on non-payment of a cheques, the drawer of the cheques must give notice to the drawee within fifteen days of the receipt of the information by him from the bank regarding return of the cheques as unpaid and also provides that the drawer may file a reply on receipt of the notice within fifteen days of its receipt. Section 142 of the Act, on the other hand, provides that one may make a complaint within one month of the date on which the cause of action arises. It further provides that if a complaint is filed within time provided by sub section (b) of Section 142 of the Act, the Court would have the power to condone the delay on being satisfied and on an application filed by the complainant. The offence under Section 138 of the Act is made out as soon as the cheques are returned as unpaid and cause of action would arise after fifteen days of the receipt of the notice. Both these aspects are important for deciding the issues in question. 7 As stated, Section 138 of the Act requires that the demand should be made by “giving a notice” in writing. It also requires that there should be a failure on the part of the drawer to pay the amount within fifteen days “of the receipt” of the notice. Therefore, giving of notice is one thing and receipt of notice is distinguishable from the issuance of notice. The fact that the petitioner had not received the notice could only be established by leading evidence. In the present case, the petitioner has not been able to establish the date on which he has received the notice and, therefore, it would be difficult for this Court to enter into this question at this stage of the proceeding. Now, the Court shall examine the main contention of the Counsel appearing on behalf of the petitioner which is that the Court’s order of cognizance was barred by Section 177 of the Code of Criminal Procedure. Section 177 of the Code of Criminal Procedure reads as follows :- 177. Ordinary place of inquiry and trial.- Every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed.” The word `ordinarily’ means that the Section 177 of the Code of Criminal Procedure would apply except when provided otherwise. The Supreme Court in a case where the accused has been convicted under the provisions of the Act in the case 8 of K. Bhaskaran vs. Sankaran Vaidhyan Balan and Others, reported in 1999 (7) SCC 510 has discussed in details the circumstances under which the Court can interfere under Section 177 of the Code of Criminal Procedure. The issue in the case was that after several rounds of litigation, the appellant of the case raised the issue in the Apex Court with respect to the territorial jurisdiction of the Court trying the case. The facts are that the complainant presented the cheques signed by the accused (appellant) before the Syndicate Bank, Branch Office at Kayamkulam (Kerala) on 29.01.1993 for encashment. The cheques bounced due to insufficiency of funds in the account of the accused. The complainant sent notice by registered post on 02.02.1993. The notice was returned to the complainant on 15.02.1993 with an endorsement `addressee absent’. The complaint was filed on 04.03.1993 before the Judicial Magistrate, 1st Class, Adoor in the district of Pathanamthitta in Kerala against the accused under Section 138 of the Act. The cheques were issued at Pathanamthitta (Kerala) whereas it was presented before the Syndicate Bank branch at Kayamkullam (Kerala) on the basis of the aforesaid fact, the Apex Court held that the case could be tried at any of the two places by virtue of Section 178 of the Code of Criminal Procedure. While discussing the issue, the Apex Court held that the offence under Section 138 of the Act can be completed” only that the concatenation of number 9 acts. The following are the acts which are the component of the Act. (i) Drawing of the cheque, (ii) Presentation of the cheques to the bank, (iii) Returning the cheques unpaid by the drawee bank, (iv) Giving notice in writing to the drawer of the cheques demanding payment of the cheques amount, (v) Failure of the drawer to make payment within 15 days of the receipt of the notice. As stated above in the case of K. Bhaskaran, five different acts were done in five different localities, and therefore, any one of the Court exercising jurisdiction in any of the five areas can become the place of trial under Section 138 of the Act. In the present case, it is not in dispute that the five acts, i.e. drawing of the cheques, presentation of the cheques to the bank, returning the cheques unpaid by the drawee bank and failure of the drawer to make payment within 15 days of the receipt of the notice, took place within the local area of Kanpur (UP) and only the complainant issued notice from Patna which was served to the petitioner in Kanpur (UP). Apart from issuance of notice, all other acts were done at Kanpur. In Black’s Dictionary, there is a distinction between 10 giving of notice from receiving of notice. “A person notifies or gives notice to another by taking such steps as may be reasonably required to inform the other in the ordinary course, whether or not such other actually comes to know of it.” A person “receives” a notice when it is duly delivered to him or at the place of his business. Therefore, it cannot be said that merely because the notice was sent from Patna (Bihar), the cause of action arose at Patna. In this context of the matter, It may be said that the case ought to be tried before the Court at Kanpur (UP). The question, therefore, arises that whether the order of cognizance is bad by virtue of being passed by the Court which does not have the territorial jurisdiction to try a case. In this context, Section 462 of the Code of Criminal Procedure may be noted. “462. Proceedings in wrong place.- No finding, sentence or order of any Criminal Court shall be set aside merely on the ground that the inquiry, trial or other proceedings in the course of which it was arrived at or passed, took place in a wrong sessions division, district, sub- division or other local area, unless it appears that such error has in fact occasioned a failure of justice.” It has been argued on behalf of the complainant that the order of cognizance is not bad in view of the 11 provisions of Section 462 of the Code of Criminal Procedure. Learned Counsel for the complainant refers to the decision of Trisuns Chemical Industry vs. Rajesh Agarwal and Others, reported in AIR 1999 SC 3499. The Supreme Court has held that “it is erroneous view that the Magistrate taking cognizance of an offence must necessarily have territorial jurisdiction to try the case as well. Chapter XIII of the Code relates to jurisdiction of the criminal Courts “in enquiries and trials”. That chapter contains provisions regarding the place where the enquiry and trial are to take place. Section 177 says that “every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed. But Section 179 says that when an act is an offence by reason of anything which has been done and of a consequence which has ensued, the place of enquiry and trial can as well be in a Court “within whose local jurisdiction such thing has been done or such consequence has ensued. It cannot be overlooked that the said provisions do not trammel the powers of any Court to take cognizance of the Offence.” According to the decision aforesaid, the jurisdictional aspect became relevant only when the question of enquiry or trial arises. It is therefore a fallacious thinking that only a magistrate having jurisdiction to try the case has the power to take cognizance of the offence. If he is a Magistrate of the First Class his power to take cognizance of 12 the offence is not impaired by territorial restrictions. After taking cognizance he may have to decide as to the Court which has jurisdiction to enquire into or try the offence and that situation would reach only during the post cognizance stage and not earlier. The judgment aforesaid would lead this Court to hold that the order of cognizance in itself is not bad for the reason mentioned in the case of Trisuns Chemicals Industries and also because of the provisions of Section 462 of the Code of Criminal Procedure. However, in a later judgment in the case of M/s Harman Electronics Ltd. & Anr. Vs. M/s National Panasonic India Ltd. reported in 2009(2) PLJR 86 (SC), the Supreme Court held that the Court at Delhi had no jurisdiction to try the case and transferred the matter under Article 142 of the Constitution of India to the Court at Chandigarh. The facts of the case were that the main grievance raised on behalf of the accused is that the accused persons as well as the complainant were carrying out their business at Chandigarh and the cheques were also given at Chandigarh. Only notices were issued by the complainant to the accused persons from Delhi. The notice, however, was served at Chandigarh and, therefore, it is contended that the complaint would not have been filed at Delhi. In the present case, the facts are similar to the case of M/s Harman Electronics Ltd.. However, this Court 13 cannot transfer the case to the Court at Kanpur as the High Court does not have the power to transfer the case from one State to another. On the other hand, this Court cannot hold that the order of cognizance is bad on the ground that it suffers from the jurisdictional error. At the most this Court can observe that the case ought to be tried at Kanpur (UP) and the question of jurisdiction can be raised by the petitioner in the Court below or before the appropriate Court. The complainant would, however, also have the remedy of taking steps and getting the case registered at Kanpur (UP). This application is disposed of with the aforesaid observations. ( Sheema Ali Khan, J.) Patna High Court Dated, the 12th November, 2009 A.F.R./ANAND