Criminal Misc. No. M- 10453 of 2011 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Criminal Misc. No. M- 10453 of 2011 Date of decision:- 16.5.2011 M/s Atma Tube Products Ltd. And another ...Petitioners Versus M/s Hero Cycles Limited ...Respondent CORAM: HON'BLE MS. JUSTICE RITU BAHRI Present:- Mr. V.K. Sachdeva, Advocate for the petitioners. RITU BAHRI J. Challenge in this petition is to the order dated 11.3.2011 whereby the application filed by the petitioner company challenging the complaint under Section 138 of Negotiable Instruments Act, 1881 on the ground that the trial Court at Ludhiana has no jurisdiction to entertain the complaint, has been dismissed. The complainant company M/s Hero Cycles Limited was engaged in the business of sale of its goods from Ludhiana to M/s Atma Tube Products Limited, Mohali. The goods against which the cheques were issued by the accused were purchased by the accused from the complainant Company at Ludhiana. The cheques in question were handed over to the complainant company at Ludhiana and the same were also presented by the complainant company with their banker at Ludhiana for encashment. After the cheques were dishonoured, the legal notice were issued from Ludhiana. Mr. V.K. Sachdeva, Advocate counsel for the petitioners has vehemently argued that all the cheques have been issued from the bank at Criminal Misc. No. M- 10453 of 2011 -2- Chandigarh, they were dishonoured at Chandigarh and legal notice had also been received by the company at Chandigarh. Mere issuance of legal notice from Ludhiana will not create a jurisdiction for the complaint to be entertained. As per law laid down in the case of M/s Harnam Electronics versus National Panasonic Ltd. 2009(1) RCR Criminal 458 the jurisdiction at the Courts at Chandigarh is not made out. Section 138 of the Act is reproduced as under :- “Dishonour of cheques 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 dateon 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 be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of 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 Criminal Misc. No. M- 10453 of 2011 -3- 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 the present case : (1) All the business transactions were conducted from Ludhiana. (2) There was no branch office at Chandigarh. (3) All the payments were made to the complainant at Ludhiana. (4) The cheques were presented at Ludhiana. (5) It was dishonoured by the collecting bank of the accused at Chandigarh and it was presented at Ludhiana for collection. (6) The legal notice was sent by the complainant from Ludhiana and was duly received by the petitioners at Chandigarh. Therefore, since all the business transactions have been conducted by the complainant from Ludhiana, the jurisdiction as per the law laid down in M/s Harnam Electronics's case (supra) would be at the Courts at Ludhiana. In M/s Harnam Electronics's case (supra) all the transactions had taken place at Chandigarh and the complainant company had its head office at Delhi, therefore, it was held that Delhi Courts had no jurisdiction to entertain the complaint under Section 138 of Negotiable Instruments Act. No merits. Dismissed. 16.5.2011 ( RITU BAHRI ) Vijay Asija JUDGE