* IN THE HIGH COURT OF DELHI AT NEW DELHI + CRL.REV.P. No 171/2009 Decided on 23.09.2010 IN THE MATTER OF M/S RELIGARE FINVEST LIMITED Petitioner Through: Mr. Vijay Aggarwal, Advocate with Mr.Gurpreet Singh, Mr.Manoj Taneja and Mr. Amit Shrivastava, Advocates versus STATE AND ANR. Respondents Through: Mr. M.N. Dudeja, APP for the State. None for R-2. CORAM * HONBLE MSJUSTICE HIMA KOHLI Whether Reporters of Local papers may be allowed to see the Judgment? To be referred to the Reporter or not? Whether the judgment should be reported in the Digest? HIMA KOHLI, J. (Oral) Despite service, none appears on behalf of the respondent Nd.2. Therefore the said respondent is proceeded against ex-parte. For orders, see Crl.Rev.P.No.179/2009. Registry is directed to place a copy of the order passed in Crl.Rev.P.No.179/2009 in this file. (HIMA KOHLI) SEPTEMBER 23, 2010 JUDGE rkb Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified 0 • IN THE HIGH couRT or DELHI AT NEW DELHI + CRL REV P 17912009, 166/2009, 16912009 and 17112009 Dedded on 23.09.2010 IN THE MATTER OF NI/S RELIGARE FINVEST LIMITED Petitioner Through: Mr. Vijay Aggarwal, Advocate with Mr.Gurpreet Singh, Mr.. Manoj Taneja and Mr. Amit Shrivastava, Advocates versus STATE AND ANR. Respondents, Through: Mr. M.N. Dudeja, APP for the State, Mr. Buddy A. Ranganadhan, Advocate for R-2 in CrLRP-179/2009. CORAM * HON'BLE MSJUSTICE HIMAKOHLI 1, Whether Reporters, of Ldcal papers may be aHbwed to seethe Judgment? 2. To be refrred to the Reporter or not? 3 Whether the judgment should be reportedin the Digest? • HIMA KOHLI, 1 (Ora): 1 This common oi der shaH dispose of the petitons filed by the • •• petitionet as the facts of these cases are identical' and raise common q.uesdor of law. For the sake,oi convenience, facts of Crl.Rev..P.No.179/2009 are heinq taken note of. 2 fhe present petition is filed by the petitioner Lnder Section 397 read with Section 401 of the Cr PC, against the judgment dated oq 03 200 • " •passed by the learned M'etrQolitan Magistrate in a complaint'. dase No.10621/2009 under Section '138 'of the' Negotiable Instruments Act; 1881'. (hereinaht'r tefrbed to as 'the Act') ho'dng trite a(ia that the court didno have thn tori iw i tr isdiction to entertain crie comolaini and retui ning the F CRL,REV.P. 179/2009 • • • Page 1 of/iS same to the complainant/petitioner, for being presented before the cour1 having, territorial jurisdiction to try the same. It is', averred in the complaint petition that the petitioner/complainant is a public limited company having its registered and corporate office at New Delhi and is dealing with the business of pro\iding its customers various types of joans. It is further, stated that the respondent/accused availed loan facility from the petitioner/complainant but the account became irregular. Towards discharge of part of the debts, the espondent/accUsed issued cheques; dwhich when presented by the petitioner/complainant to its bankers namely, H'DFC Bank Ltd., ConnaugIt Place, New Delhi, were returned unpaid by the bankers of the accused unde the return memo dated 29 12 2008, with the remarks, "insufficient funds" The return memo was received by the petitioner/com'pIainant at Delhi. para 4 of the complaint, it is stated that the aforesaid cheques were submitted by the respondent/accused at the corporate and registered office of the complainant/petitioner. Thereafter, a legal demand notice was issu€!d by the .petitioner/ompl'ainant to the respondnt/accused from Delhi, duly dispatched • on 14.01.2009. As the respondent/accused failed to make the payments 'of the cheque amount, demanded through the legal notice within the stipulated period,, the petitioner/complainant filed the aforesaid complaint before the court of the learned Metropolitan Magistrate. The impugned order came to be passed at the pre'-cognizance stage. in other words, notices were no issued on the complairt to the accused and : instad, the complaint was eturned at the pre-summoning stage by the lerned Metropolitan Magistrate to the petitioner/complainant for want of territorial jurisdiction. " I , .Counsel for the petitioner/complainant submits that the Iearne( Metropolitin Magistrate erred in arriving at the conclusion that his Court did CRL.REV.P179/2OO9 . . . . Page2of18 , I-A not have the territoriljurisdiction to entertain the cornplaint He states that a perusal of the complaint itself indicates that part of the cause of actibn arose in Delhi, and the following, acts were done in Delhi:- That the registered and corporate office of the petitionr/cornplainant is at New Delhi. That the cheqUes were submitted by the respondent/accused at th corporate and registered office of the complainant/company situated at Delhi (iii') That the petitioner/complainaht presented. the cheques for encashment to its banker situated at Delhi. That the cheques upon being dishonoured when presented to the bankers of the respondent/accused, were returned to the petitioner/complainant through its bankers at Delhi. That the legal notice was dispatched by the petitioner/corn plainant to the respondent/accused from Delhi. 5. . counsel for the petitioner/complainant submits that while passinc the impugned order, the learned Metropolitan Magistrate misinterpreted the judgment of the Supreme Court in the case of M/s Harman Electronics Pvt Ltd. v. M/s National Panasonic India Ltd. reported as 2009 H AD SC 21. Fc states that the aforesaid judgment was in fact not applicable to the facts of the present case. It is further stated that the judicial pronouncement in the case of K. Bhaskaran vs. Sankaran Vaidhyan Balan and Anr. reported p (1999) 7 5CC 510 still holds the field and has not been watered down by any of the subsequent decisions on the point of territorial jurisdiction. Rathr if the subsequent decisions down the years are perused., the .cae of K. Ehaskaran (supra), remains the fountainhead . and has been reiterated from CRL.REVP;179/2OO9 . . Page3ofi8; time to time It is further urged that the aspect of territorial jurisdiction ought not to have been 'gone into by the learned Metropolitan Magistrate at the pre summoning stage, and the said aspect could have been considered and decided either wys, even after cognizance was taken. 6. In support of his submission that the averments contained in the complaint petition prirha fade revealed that it was maintainable within the territorial jurisdiction of Delhi, counsel for the petitioner relied on the followincj judgments: K. Bhaskaran vs. Sankaran Vaidhyan Balan and Anr. (199) 7 SCC 510 Trisuns Chemical Industry vs. Ralesh Agarwal and Ors. (1999) 8 SCC686. Alchemist Ltd. vs. State Bank of Sikkim, (2007) 11 SCC 335 Smt Shamshad Beum vs. B. Mohammd 2008 (13) SCALE 669 'i. Rajiv Modi vs. Sanjay Jam •V (2009) SLI 725 Religare Finvest Limited vs. Sambath Kumar A (2010) JICC (N) 26 Patiala Casting P. Ltd. & Ors. vs. Bhushan Steel Ltd. 2010 IV AD f (CRL)(DH'C) 266. 7. Per contra, counsel for the respondent supports the impugnd judgment and submits that the, same does not deserve interference. He states that in the present case, the distinction between the term, "cause1of' action" and "offence" must be understood. He relies on the provision Section 142(b) of the Act to urge that the aforesaid provision alone deals with the issue of cause of action and that the proviso (c) tb Section 138,of the Act postulates that the said Section would 'not apply until the drawer of the CRL.REVP. 17912009 Page 4 of 18 'cheque fails to make payment of the amount to the holder in due course of the heq'u, within 15 days of the recei5t of the said notice. He, therefore submits that the location where the major part of the cause of action arises, i.e., the place where the cheque on presentatioi, is dishonour.ed. has to be examined for deciding the issue of territorial jurisdiction.. To fortify his submission that the offence under Section 138 is completed only on non- payment of the amount, as contemplated in proviso(c) and the locality wher. the drawer fails to make the payment within 15 days .of the receipt of the notice, is of primary consideration, he relies on the following judgments: Shri Ishar Alloy Steels Ltd. vs. Jayaswals NECO Ltd; 2001 (3). SCC6ac ., . ICICI Bank 'Ltd. vs. Subhas Chand Bansal 160 (2009) DLT 379 Achintya Mandal:vs. Chaitanya Agro Pr'oducts & Ors. 2009 (108) DR3471 iv M/s Harri - n Electronics Pvt: Ltd. vs. M/s National Panasonic India •Ltd 2009 HAD'SC21 8. , In the case of K.Bhaskaran(supra), the question of territoril jurisdiction of the Magistrate's Court situated at Adoor in Pathanamthittá District, in the State of. Kerala, to try the case under Section 138 of the Adt, was under consideration 'where, the Cheque was dishonoued in anothr District in the State of Kerala. The'learned Magistrate held that the court dic not have the territorial jurisdiction to try the case as the cheque was dishonoured by the branch office of the coniplainant/bank situated in a different District,. On an appeal preferred by the complainant before the High Court of Kerala,, the Single Judge accepted complainant's version that the cheque was issued within the territorial lirrits of the trial court's'jurisdiction CRL.REV.P.179/2009 , Page5ofi8 and reversed the order of the Magistrate Aggrieved by the order of the High Court, the appellant/accused approached' the Supreme Cou'rt. While dealing with the submissions of both the parties on the question of territorial jurisdiction, the Supreme Court observed as below - "ii. We fail to comprehend as to how the trial court could have found so regarding the, jurisdiction question. Under Sectibn 177 of the Code "every offence shall ordinarily, be enquired into and tried in a •court within whose jurisdiction it was committedT. The Ocallity where the bank (which dishonoured the cheque) .s situated cannot be regarded as the soDe criterion to determine the pDace'of offence. ft. miuist be remembered that offence under Section 138 'wouDd not be compDeted with the dis,honour of the cheque. It attains completion 'I only with the failure of the drawer of. the cheque to pay the cheqe.amount within the ex'piry of 15 days mentioned in Clause (c) of the proviso to Section 138'of the Act. It is nOrmally difficult' to fix up a particular locality as the place of failure to pay the amoiLmt covered by the cheque. A place, for that purpose, would depend upon 'a '.variety of 'factors. It can 'either be at the place Where the' drawer resides or at the place where the payee'resides orat the'place' where,either of them carries on business'. Hence, the difficulty'to fix up any particular locality as the place of occurrence for the offence under Section 138 of the Act 12. Even otherwise the rule that every offence shall be . -41 tried by a court within whose jurisdiction it was committed is not an unexceptional or: Linchangeable pinciple. Section 177 its&f has been framed by, the legislature thoughtfully . by using the ' precautionary word .'ordin'arily'' to indicate that the ruDe is not invariable in all cases Section 178, of the Code suggests that if there is uriicertãinty as to where, 'among different. localities, the offence woUld have been committed the triaD can be had'in a court having jurisdiction over any of those localities. The provision has further widened the, scope by, stating that in case where the offence, was committed partly in one local area and partly in ' another' local area the court in either of the localities can exercise jurisdiction to try the case Further again, Section '17.9 of the Code stretches its scope to a stillI wnder horcizon It reads thus CRL RE V.P. 17912009 Pa'ge6ofl8 (70 • "179. Offence triable where act is done or consequence ensues - When an act is an offence by reason of anything which has been done and of a consequence which has ensued, the offence may be enquired Jnto or tried by.a court within whose local jurisdiction such thing has been done or such consequence has ensued." 13. The aboveprdvisions in the Code should have been borne in mind when the question regarding territorial jurisdiction of the, courts to try the offence was sought to be determined. The offence u,der Section 138 of the Act cthi • be cometed only with the cdncatenatan of a ntimber of acts. The foowng are the acts whch are components of the said offeice': (L) drwng of the chequer '(2) presehtaUon of the cheque to the bank, (3) returnhig the che.qUe'unpad by the drawee bank s. (4) giv.i,ng noUce hi wrfthig to the • drawer of the cheque demand ñg payment of the • cheque amount, (5) faure of the drawer to make payment wfthhi 15 days of the recept of • the notce. It is not ncessary that alli the ,above five acts shoud have been perpetrated at the same llocallty. It s possiibe.that each of those five acts coffid be done at 5 different llocates. But concatenation of all the above five is a sine qua non for the. completion of the offence under Section 138 of the Code. In this context a reference to Section 178(d) of the Code is useful: It is extracted below: 178. (a)-(c) (d) •where the offence consists of several acts done in different local areas, " • it may be enquired into or' tried by ; a', court - having jurisdiction over any of such locaVareas." Thus ft s dear; of the five differn.t acts were done 'On five different iocaftOes.anj one of the • coirts exercOsOng'.jurOsdctOoñ On: one of. the.five. • llocall areas can become the pace of trOaF for the offence under SectOon 138 of the Act. In other' words, the complainant can choose any one of. those courts having jurisdictioH. over any one of the local • areas within the territorial lmits of which any one of, those five acts was done. As the amplitude stands so widened and so expansive it is an idle exercise to raise jurisdictional question regarding the offence under • SectiOn 138 of the Act." (emphasis added) CRLREVP. 17912009 Page 7of18 • 9. The aforesaid judgment thus clarifies that the five essential • . ingredehts for completing the offence under Section 138 of the Act are as • •below- (I) Drawing of the cheque,. (ii) Presentation of the cheque with the bank, . ... • (iii) Returning ofthe cheque unpaid by the drawee bank, Giving notice in writing to the drawer of the cheque demanding payment of the cheque amOunt, and. . Failure of the drawer to make payment within 15 da.ys of the receipt of the notice. . The aforesaid judgment was echoed by the Supreme Court in the case of Smt. Shamshad Begum (sura), wherein it was reiterated that: ."8. It us not necessary that the above five acts shoukil have, been perpetrated at the same ocallUty. It is possUbe that each of those five acts coud be done at five dUffeirent DocallUtes. But concatenaton of aill the àbbve five s sUne qua non for coriplletUon of the offence under Secton 138 of the Act " ( emphasis added) • In the case of Trisuns Chemical Industry (supra),. while examining the judgment of the Gujarat High Court, passed in a revision petition, wherein, it was held that a perusal of the complaint filed.before the trial court showed that there was nothing to reflect that any part of the transaction took place within the territories of the State of Gujarat and the Judicial. Magistrate, Gandhidham ought not to have taken cognizance of the matter and ought not had directed issuance of process, the Supreme Court held that the Magistrate erroneously, assumed that for the purpose of taking cognizance of an offence, . the Court must necessarily have the teritorial jurisdiction to try the case as well Adverting to Chapter XIII of the Code CRL.REV.P.179/2009 . . • . . . Page8ofl8 I r ll~ i Criminal Procedure, relating to "Jurisdiction of Criminal Courts in Enquiries and Trials", the Court held that the jurisdictional aspect becomes relevant only when the question of enquiry and trial arises In this regard, reference may be made to the following dbservations: 13. ...... .... Therefore, when there is nothing in Chapter XIV of the Code to impair the power of a Judicial Magistrate of the First Class taking cognizance of the offence on the strength of any territorial reason it is impermissible to deprive such a Magistrate of the power to take cognizance of an offence - of course, in certin special enactments special. provisions ' are incorporated for restricting the power of taking cognizance of offences falling, under such aáts.. But such pi'ovjsions are protected by non obstante cluses. Anyway this is a different matter . 14. The jurisdktonaE aspect betomes r&evara .ony when the qu'eston of enqUfry or trall arses. ft is therefOre a faadoUs thnkng that ony a. . lMa.gstrate having jursdcton to try the case has the power to take cognzance of the offence If he sa Magistrate of the Ffr.st Cilass hs.powerto 'take cogifizance of the Offence is not iimpa i red by territor ial resfflctons. 'After takng cognzance. he may have to dec'de as to the court whkh has or try the offence and that sftuaton woud reach only diurhig the post- cogniizance. stage and not earDer." (emphasis added) 12. In the case of Rajiv'Modi (supra)., the SuPreme. Court formulatë1 the following question for consideration:- "10. The issue 'b'efore us is, whether the High court under Section 482 Cr..P.C; was justified in quashing the complaint on the ground that no cause of action has arisen in Patna in respect of the alleged Offences under the provisions of IPC 11. . The learned Counsel •for the appellant would . submit, that, the cognizance stage and the.trial stage are two different aspects of criminal jurisprudence and under the Code, 'there is no territorial 'restriction for any Magistrate to take cognizance of an offence although' at the stage of trial, the said issue may become relevant in view of the provisions of Chapter XIII of the Code. The Counsel 'would also assert that CR4REV.P. 17912009 ' . ' , ' ' Page 9 of 18 Section 177 of the Code relatingto the jurisdiction of the Criminal Courts do not trammel the powers of any Court to take cognizance of the offence and; thus, would apply to Sectiors 190 and 200 as well. ......... .. 12. In order to .appreciate the jurisdictional aspect, it wOuld be relevant to discuss the meaning of the expression ca use' of action". This Court has laid down that the cause of action is a fundarpental element to confer the jurisdiction upon any Cort and which has to be proved by the plaintiff to support his right to a judgment of the Court. It is relevant.to take 'note of what was stated b' this Court in State of, Bombay v. Narottamdas Jethabhai, 1951 SCR 51. In this case, it is observed that the jurisdiction of the Courts epended in civil caes on a "cause of action" giving . • rise to a civil liability and in criminal cases' on the • .. . commission of an offence, and on the provisions made in the. two Codes of Procedure as to the venue of the trial and other relevant matters." 13. After taking into consideration a, catena of decisions on the point. of "cause of action", while tracing the decisions starting from. thO year 1950s right uptb 2009, including judgments rehdered in the cases of, State of Bombay vs. Narottamdas Jethabhai, 1951 5CR 51; State of Madras vs. V.P. Agencies, AIR 1960 SC 1309, Gurdit Singh \!S Munsha Singh, (1977) , SCC 791; State of Ralästhan vs. SAiaika Proerties, (i85) 3 SCC 21;. ONGC vs. Utal Kumar B'asu, (1994) 4 SCC.'711; Bloorh Dekor Ltd. vd. Subash Himatlal Desai, (1994) 6 5CC 322; Rajasthan High Court Advocate' Assn. vs. Union of India, (2.001) 2 5CC .294; Y. Abraham Alith vs. Inspectdr of Police, (204) 8 SCC 100; and Alchemist 'Ltd. vs. 'State Bank.of Sikkim, (2007) 115CC 335, the Supreme Court crystallized the law as follows:- "22. . It is evident from the above decsons, that, to constftrute the terriitoriall jurisdiction, the whoe or a part of "cause of action" must have arisen *thn the terrftora1l 'jursdcton of the Court and the sammust be dedded on the bass of the averménts .rn.ade'ln the compant wthout • enbirkng upon an hqry as o the, . correctness or 'otherwse of the said fact." • • . • X)(X ' XXX. XXX 29.'In Ve*of the above prindpEes, the Court on baslls of thE averments made in the compDahit, if it is prIma fade of the opnon that the whofle or a part of cause of action has arsen, in its jursdcton it can certahiy take cognzance of the compOahit. There is no need to ascertan that the aUegations made are true in fact." (emphasis added) 14. The attention of this Court has been drawn to the two recent • decisions of Single Benches of this Court in the cases of Religare Finvest: Limited vs. Sanbath Kumar A repoted as (2010) .]CC (NI) 266and Patiala Casting P. Ltd. & Ors.. vs. Bhushan Steel Ltd. reported as 2010 IV AD (CRL)(DHC) 266.. In both the cases, the Single Benches noticed the judgment in the case of, Harman Electronics (supra), and held that mer€ sending of notice from Delhi would itself not gNYe rise to a cause of action in Delhi, for taking cognizance under the Act and the said act ought to be • acompanied by soThe othe act(s), for vesting territorial jurisdiction in pa rticul'ar court. In the case of ReligareFinvest Limited (supra), the ,SingI Judge also considered the judgment in the cases of Mosaraf Hossain Khan VS. Bhagheeratha Engg Ltd reported as (2006) 3 SCC 658 and Lok Housing and Constructions Limitec vs Raghupati Leasing and Finance Limited and Anr reported as, 100 (2002) DLT 38tOhold that a complaint .under Section 138 • of the Act could be filed in any of the five local areas where any of the five different.acts constituting the offence under Setion 138 of the NI Act were done The judgment in the case of Delhi High Court Legal Services Committee vs. Government of N:C.T. of Delhi reportedas 163(2009) DLT 56 was als distinguished by holding that the same had no applicaticn to the facts of th said case as the said judgment directed return of complaints in cases, in ( which Delhi courts did not have territorial jurisdictioh to try the complaints. I:L may be n.otd that the aforesaid, judghent is stated to have been taken irl CRL.REV.P.179/2009 . Pagellofl8 appeal to the Supreme Court and status quo was ordered to be maintained until further orders and the matter has been directed to be posted before a three Judges Bench. It is stated that the said matter is sUN pending disposal. 15. Asregards the submission of the counsel for the respondent that territorial jurisdiCtion vests in a Court in whose jurisdiction, the major portion of the cause of action arises, i.e., the locality where the bank of the accused hich has dishonoured the cheque is situated, th:e Supreme Court has clarified in the case of K. Bhaskaran (supra), that the locality where the bank of the accused, which has dishonoured the cheque, is situated cannot be regarded a the sole criteria 'to determine 'the 'place of offence and that a place, for the purpose of invoking. th provisions of Section 138 of the Act, would depend on a variety of facts. Pertinently, the term, used by the Supreme Court in the aforesaid case for completing the offence under Section 138 of the Act is "acts" and, not "cause Of action". The said position emerges clearly from a bare reading of'paras. 11, 14 and' 16 of the aforesaid judgment reproduced hereinabove. Therefore this Court is not indined to agree with the submission of, the counsel for the respondent that the major portion of the caus,e of action in the present case arose only afte the 'cheque issued by the respondent/accused was forwarded by