1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE CRIMINAL APPLICATION NO.2674 OF 2008 Hemlata Raghunath Pendharkar : Applicant (Orig.Accused no.3) V/s. Jaswantsingh Rajaram Sonawane & Anr. : Respondents ... Mr.A.V.Anturkar i/b. Mr.S.B.Deshmukh for the applicant. Mr.J.Shekhar with Mr.Jitendra Pathade i/b. M/s.J.Shekhar & Co., for respondent no.1. Ms A.T.Jhaveri, Addl. Public Prosecutor for the State. .... WITH CRIMINAL APPLICATION NO.326 OF 2010 Mrs.Sangeeta Popat Kale : Applicant (Orig. Accused) V/s. Bharat Mahadeo Jadhav & Anr. : Respondents .... Mr.Ganesh Bhujbal for the applicant. Mr.P.S.Hingorani, Addl. Public Prosecutor for the State. .... CORAM : B.R. GAVAI, J. DATE : MARCH 31, 2010. 2 ORAL ORDER: Since the facts as well as the question of law involved in both the Criminal Applications are almost identical, they were heard together and are being disposed of by this common order. 2. In Criminal Application No.2674 of 2008, the applicant-accused had given a cheque bearing no.273003 dated 20.10.2007 for an amount of Rs.16,000/- drawn on Bank of Baroda, Senapati Bapat Road Branch, Pune, to the complainant. The respondent-complainant deposited the said cheque in his account with IDBI Bank, Phaltan Branch, on 20.12.2007. The said cheque in turn was forwarded for clearance by IDBI Bank, Phaltan Branch, to Bank of Baroda, Senapati Bapat Road Branch, Pune. The said cheque was dishonoured and the intimation regrading the same was given by the applicant’s Bank to the respondent-complainant’s Bank on 11.1.2008. Accordingly, a notice was issued by the respondent- complainant on 29.1.2008 calling upon him to make the payment of the dishonoured cheque. Though the notice was attempted to be served, it was refused by the accused. Since the accused did not comply with the notice, a complaint under section 138 of the Negotiable Instruments Act came to be filed in the Court of the learned Judicial Magistrate, First Class, Phaltan. In the said complaint, an application was filed by the applicant to the effect that the Court at Phaltan did not have jurisdiction. 3 The said application came to be rejected vide order dated 23.6.2008. Hence, the present Application. 3. In Criminal Application No.326 of 2010, the cheque in question was drawn on Pune Cantonment Co-operative Bank Ltd., Hadapsar Market Branch, Hadapsar, Pune. The respondent-complainant had presented the said cheque in Mohol Branch of Solapur District Co- operative Bank which in turn was forwarded to the applicant’s banker at Pune. The cheque returned dishonoured. Accordingly, a notice was served from Mohol. The notice was not claimed by the applicant. Since the payment was not made within the stipulated period, a complaint came to be filed. An identical application came to be filed to the effect that the learned trial Court at Mohol did not have jurisdiction, the said Application was rejected. A revision challenging the said order was filed before the learned Sessions Judge, Solapur. The same was also rejected. Hence, the present Application. 4. Mr.Anturkar, the learned counsel appearing on behalf of the applicant in Criminal Application No.2674 of 2008, submits that while determining the jurisdiction of a place where the proceedings under section 138 of the Negotiable Instruments Act are to be filed, place of residence of the complainant would be wholly irrelevant. The learned 4 counsel submitted that the place from where a notice is issued also is wholly irrelevant. He further submits that the place from where the payment is demanded by the complainant is also not relevant. The learned counsel submits that what is relevant is the place from where notice is received by the accused. The learned counsel submits that mere presentation of cheque in the Bank of the complainant would not give a cause of action. He submits that the complainant’s Bank only acts as an agent of the complainant. He submits that it is only the place at which the payment is intended to be made by the accused’s Bank which would be relevant for the purpose of determining the jurisdiction of the Court entertaining the complaint under section 138. The learned counsel submits that the view taken by the learned single Judge of this Court in Criminal Writ Petition No.1778 of 2008 and other connected matters vide judgement dated 13th & 17th August, 2009, to the extent that the Court within whose jurisdiction the notice is issued will have jurisdiction to entertain a complaint under section 138 of the Negotiable Instruments Act does not lay down the correct position of law. He submits that the only exception where the place of residence of the complainant is relevant is carved out under sub-section (4) of section 181 of the Cr.P.C., and in all other matters, the place of residence of the complainant is irrelevant. 5. The learned counsel appearing on behalf of the respondent- 5 complainant, on the contrary, submits that the place of residence of the complainant is a relevant factor for determining the jurisdiction of the Court entertaining a complaint under section 138. He submits that since the place at which the complainant resides is the place where payment is intended to be made, the same place will give the jurisdiction to the Court to entertain a complaint under section 138. 6. With the assistance of the learned counsel for the parties, I have gone through the judgements of the Supreme Court and various judgements of the learned single Judges of this Court on the issue. 7. In the case of K. Bhaskaran v. Sankaran Vaidhyan Balan [(1999) 7 SCC 510], the proceedings under section 138 arose out of a dispute between two brothers. The appellant before the apex Court had issued a cheque to the respondent. The respondent presented the cheque to the Bank at Kayamkulam Branch of Syndicate Bank. The cheque was returned unpaid because of insufficiency of funds. The complainant issued a notice by registered post on 2.2.1993. The notice was returned with the endorsement “Addressee absent” for three dates and “Intimation served on addressee’s house”. The complaint was filed on 4.3.1993 in the Court of the J.M.F.C., Adoor. It was contended by the accused that the cheque had been dishonoured at Kayamkulam. It is also contended by the 6 accused that the cheque was snatched away by the complainant. The learned trial Court had acquitted the accused holding that it had no territorial jurisdiction in the case. The High Court set aside the acquittal and convicted the accused. The apex Court upheld the conviction and remanded the matter to the trial Court on the question of sentence. The apex Court observed thus:- “11. We fail to comprehend as to how the trial court could have found so regarding the jurisdiction question. Under Section 177 of the Code “every offence shall ordinarily be enquired into and tried in a court within whose jurisdiction it was committed”. The locality where the Bank (which dishonoured the cheque) is situated cannot be regarded as a sole criterion to determine the place of offence. It must be remembered that offence under Section 138 would not be completed with the dishonour of the cheque. It attains completion only with the failure of the drawer of the cheque to pay the cheque amount within the expiry of 15 days mentioned in clause (c) of the proviso to Section 138 of the Act. It is normally 7 difficult to fix up a particular locality as the place of failure to pay the amount 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 or at 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 tried by a court within whose jurisdiction it was committed is not an unexceptional or unchangeable principle. Section 177 itself has been framed by the legislature thoughtfully by using the precautionary word “ordinarily” to indicate that the rule is not invariable in all cases. Section 178 of the Code suggests that if there is uncertainty as to where, among different localities, the offence would have been committed the trial can be had in a court having jurisdiction over any of those localities. The provision has further 8 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 179 of the Code stretches its scope to a still wider horizon. It reads thus: “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 into or tried by a court within whose local jurisdiction such thing has been done or such consequence has ensued.” 13. The above provisions 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. 14. The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. The following are the acts which 9 are components of the said offence: (1) drawing of the cheque, (2) presentation of the cheque to the bank, (3) returning the cheque unpaid by the drawee bank, (4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, (5) failure of the drawer to make payment within 15 days of the receipt of the notice. 15. It is not necessary that all the above five acts should have been perpetrated at the same locality. It is possible that each of those five acts could be done at five different localities. But a 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 local 10 areas.” 16. Thus it is clear, if the five different acts were done in five different localities any one of the courts exercising jurisdiction in one of the five local areas can become the place of trial for the offence under Section 138 of the Act. In other words, the complainant can choose any one of those courts having jurisdiction over any one of the local areas within the territorial limits 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.” 8. It can thus clearly be seen that the apex Court has held that the complaint would be filed at any of the places where the five acts have taken place, viz.:- (1) drawing of the cheque, (2) presentation of the cheque to the bank, (3) returning the cheque unpaid by the drawee bank, (4) giving notice in writing to the drawer of the cheque 11 demanding payment of the cheque amount, (5) failure of the drawer to make payment within 15 days of the receipt of the notice. 9. In the case of Harman Electronics (P) Ltd. v. National Panasonic India Ltd. (2009 (1) All MR 479), the cheque in question was issued at Chandigarh. The complainant also had a branch office at Chandigarh, although his Head Office was at Delhi. The cheque was presented at Chandigarh. The cheque was dishonoured also at Chandigarh. However, the complaint-respondent issued a notice upon the accused asking to make payment from New Delhi. The said notice was served upon the accused at Chandigarh. The complaint came to be filed at Delhi. An application came to be filed before the learned Judge on the issue of jurisdiction of the Court at Delhi. The learned trial Judge observed that since the payment was made from Delhi and the payment was to be made to the complainant at Delhi and since the accused failed to make the payment at Delhi, the Court at Delhi had jurisdiction. It will be relevant to refer to the following observations of the Supreme Court in the said matter:- “13. The complaint petition does not show that the cheque was presented at Delhi. It is absolutely silent in that regard. The facility for collection of 12 the cheque admittedly was available at Chandigarh and the said facility was availed of. The certificate dated 24.6.2003, which was not produced before the learned court taking cognizance, even if taken into consideration does not show that the cheque was presented at the Delhi Branch of the Citi Bank. We, therefore, have no other option but to presume that the cheque was presented at Chandigarh. Indisputably, the dishonour of the cheque also took place at Chandigarh. The only question, therefore, which arises for consideration is that as to whether sending of notice from Delhi itself would give rise to a cause of action for taking cognizance under the Negotiable Instruments Act. 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 the purpose of proving its case that the accused had committed an offence under Section 138 of the Negotiable Instruments Act, the 13 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 cognizance 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 complaint. As it is only on receipt of the 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.” It has been specifically observed by the apex Court in the said case that the complainant-petitioner does not say that the cheque was presented at 14 Delhi. In this factual background, the apex Court found that dishonour of the cheque also took place at Chandigarh. The apex Court, therefore, held that mere issuance of a notice from Delhi would not by itself give rise to a cause of action but communication of the notice would. The apex Court further observed in paragraph 25 as under:- “25. We cannot, as things stand today, be oblivious of the fact that a banking institution holding several cheques signed by the same borrower can not 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.” It will thus be seen that the apex Court taking notice of a situation wherein a cantankerous complainant may present the cheque at four 15 different places and may also serve notice from four different places and file complaints at four different places. It was, therefore, observed that in order to avoid harassment to the accused, the mere sending of a notice from a particular place would not give a cause of action to file a complaint at that place. At the cost of repetition, it is to be noticed that in the said case, except issuance of a notice, nothing had taken place at Delhi and the entire transaction had taken place within the territorial jurisdiction of the Court at Chandigarh. 10. A reference to the judgement of the Supreme Court in Shamshad Begum v. B. Mohammed [(2008) 13 SCC 77] would also be necessary. In the said case, the agreement between the parties was entered at Bangalore and the cheque was also returned at Bangalore. However, the complainant issued the notice of dishonour of cheque from Mangalore and the reply was also given to him at Mangalore address. A complaint was, therefore, filed at Mangalore. The contention of the appellant that the Court at Mangalore did not have jurisdiction was rejected by the trial Court as also by the apex Court. The apex Court following the view taken in K. Bhaskaran’s case held that since the notice was issued at Mangalore and since the accused had given reply to the complainant at Mangalore address, one of the acts necessary to give jurisdiction to the Court had taken place within the jurisdiction of Mangalore Court, the 16 Court at Mangalore had jurisdiction to entertain the complaint. 11. Insofar as the judgement of the learned single Judge in the case of Ahuja Nandkishore Dongre v. State of Maharashtra & anr. (2007 (1) Bom.C.R. (Cri.) 1031) is concerned, the complainant was a resident of village Soyjana, taluka Manora, dist. Wasim. He was working at Bhandara. The accused was also a resident of Bhandara and a hand loan was given to the accused by the complainant at Bhandara. The cheque which was dishonoured was drawn on Bank of India, Bhandara Branch. The complainant presented the cheque at Digras Branch of Yavatmal Urban Co-operative Bank. Cheques were returned as account was closed. The complainant, therefore, sent a notice to the accused through a lawyer at Digras. The notice was not replied. A complaint came to be filed at Digras. In this factual background, the learned single Judge held that the accused was not a resident of Digras, but was a resident of Soyjana and, therefore, at the most, the payment could be considered to be demanded and required to be made at the place of residence of the complainant. In this factual background, it was held that mere issuance of notice by a lawyer from Digras would not give a ground to file the complaint at Digras. 12. In the case of Jinraj Paper Udyog v. Dinesh Associates & anr. 17 (2009 (2) Bom.C.R. 81), the cheques were issued at Delhi. Both the complainant and the accused had offices in Delhi. However, the complainant chose to deposit the cheque at Nagpur where he claimed to have an office. The proceedings were initiated from Nagpur instead of Delhi. The complaints were dismissed on the ground of jurisdiction. In the factual background of the case that the complainant had no registered office at Nagpur, that the notice was issued from an associate’s office at Nagpur when the complainant had an office in Delhi and the account in Nagpur was opened only a day before presentation of the cheque, it was held that the Court at Nagpur did not have jurisdiction. It can be seen from the judgement itself that the learned Judge has observed that since the “payee” is required to issue a notice demanding payment, such place of giving notice would be where, if payee is a company (or other registered establishment) it has a registered office, and in other cases, normally, where the payee ordinarily resides or works for gain. The learned Judge has observed that notice cannot be issued from any place from where the payee may choose to dispatch a notice. In the facts of the said case, the learned Judge found that the complainant had taken a detour of lodging the cheque for clearing at Nagpur and issued notice of demand showing the address of business associate in Nagpur only to have his case filed at Nagpur. 18 13. In the case of Nutan v. Ravindra (2008 (1) Mah.L.J. 889), both the complainant as well as the accused were residents within the jurisdiction of the J.M.F.C., Panaji. The cheques were given by the accused to the complainant drawn on a Bank which is also situated at Panaji. However, the complainant deposited the same at Margao on the cheques being dishonoured, a notice was given through a lawyer at Margao. However, it was stated in the notice that the notice was given at the instance of the complainant who was residing within the jurisdiction of the J.M.F.C., Panaji. The learned single Judge found that the payment was required to be made to the complainant at his residence which was within the jurisdiction of the J.M.F.C., Panaji and, therefore, mere presentation of the cheque at Margao and sending the notice through a lawyer at Margao did not give jurisdiction to the Court at Margao. 14. The facts in Criminal Writ Petition No.1778 of 2008 along with companion matters decided by the learned single Judge of this Court were thus: An agreement was entered into between the complainant and the accused under which the respondent-accused agreed to purchase the excess sugarcane available with the complainant. The cheque in dispute was drawn on Bank of Maharashtra, Sakharwadi Branch. The place of 19 business of the complainant was at Malinagar, taluka Malshiras. The cheque was presented by the complainant through his Bank at Malinagar Branch. On non-payment, a notice was issued through an Advocate at Malshiras. On non-compliance with the notice, a complaint also came to be filed at Malshiras. The learned single Judge found that since the place of business of the complainant was Malinagar, taluka Malshiras, as per notice of demand, the payment ought to have been made at the address of the complainant at Malinagar. The learned Judge found that the Court having jurisdiction over Malinagar area will have jurisdiction to entertain the complaint. 15. After considering the various judgments cited supra, the position appears to be as under:- The Supreme Court in the case of K. Bhaskaran (supra) has held that the following acts are components of the offence under section 138: (i) drawing of the cheque; (ii) presentation of the cheque to the Bank; (iii) returning the cheque unpaid by the drawee Bank; (iv) giving a notice in writing to the drawer of the cheque demanding payment of the cheque amount; and 20 (v) failure of the drawer to make payment within 15 days of the receipt of the notice. It has been further held in the case of K. Bhaskaran that if the aforesaid five different acts were done in five different localities, anyone of the Courts can be a place of the trial for the offence under section 138 of the Act. 16. In the case of M/s.Harman Electronics (P) Ltd. (supra), the apex Court, taking into consideration the fact that a banking institution holding several cheques signed by the same borrower can not only present the cheques 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 has been held that it was necessary 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. From the facts of the said case, it will be seen that in the said case, the apex Court was dealing with a matter wherein though the entire