Case: H.V. Jayaram Vs. The Industrial Credit and Investment Corporation of India Ltd

2. The appellant had lodged criminal cases before the Special Court for economic offences in Karnataka at Bangalore on the allegation that the respondent companies had committed offences punishable under Section 113(2) of the Companies Act. Criminal Petition Nos. 240, 1485, 1548, 1848 and 1849 of 1996 before the High Court of Karnataka at Bangalore challenged the order passed by the trial Court rejecting applications for the discharge on the ground that the Magistrate had no territorial jurisdiction to try the alleged offences. In some cases, companies straightaway approached the High Court questioning the order passed by the learned Magistrate issuing summons to them after taking cognizance of the offence. It was pointed out that admittedly the registered offices of the respondent companies are not located in the State of Karnataka but are located either at Bombay or at Gujarat. As against this, the appellant who is a practising advocate contended that he was a permanent resident of Bangalore and letters requesting the company to transfer the shares and to send memorandum, articles of association, balance sheets etc. were sent from Bangalore to the registered offices of the companies and, therefore, cause of action also arose at Bangalore. The High Court after considering the various decisions relied upon by the learned counsel for the parties arrived at the conclusion that under the provision of Section 53 of the Companies Act two modes are prescribed for serving the documents, one to serve personally and the other by post. As the documents were sent to the respondent by post, as requested by him, the cause of action would arise only where the head office is situated. The Court, therefore, arrived at the conclusion that having regard to Section 201 of the Cr.P.C., the Magistrate is required to return the complaint for presentation before the proper Court with an endorsement to that effect2. The appellant had lodged criminal cases before the Special Court for economic offences in Karnataka at Bangalore on the allegation that the respondent companies had committed offences punishable under Section 113(2) of the Companies Act. Criminal Petition Nos. 240, 1485, 1548, 1848 and 1849 of 1996 before the High Court of Karnataka at Bangalore challenged the order passed by the trial Court rejecting applications for the discharge on the ground that the Magistrate had no territorial jurisdiction to try the alleged offences. In some cases, companies straightaway approached the High Court questioning the order passed by the learned Magistrate issuing summons to them after taking cognizance of the offence. It was pointed out that admittedly the registered offices of the respondent companies are not located in the State of Karnataka but are located either at Bombay or at Gujarat. As against this, the appellant who is a practising advocate contended that he was a permanent resident of Bangalore and letters requesting the company to transfer the shares and to send memorandum, articles of association, balance sheets etc. were sent from Bangalore to the registered offices of the companies and, therefore, cause of action also arose at Bangalore. The High Court after considering the various decisions relied upon by the learned counsel for the parties arrived at the conclusion that under the provision of Section 53 of the Companies Act two modes are prescribed for serving the documents, one to serve personally and the other by post. As the documents were sent to the respondent by post, as requested by him, the cause of action would arise only where the head office is situated. The Court, therefore, arrived at the conclusion that having regard to Section 201 of the Cr.P.C., the Magistrate is required to return the complaint for presentation before the proper Court with an endorsement to that

Court's reasoning:
10. In our view, it appears that the attention of the learned Judge was not drawn to the decision rendered by this Court in H.P. Gupta v. Hiralal, 1970(1) SCC 437 and also to Section 113 of the Act, which inter alia provides that company shall deliver the documents, such as, certificates of shares, debentures and certificates of debenture stocks allotted or transferred in accordance with the procedure laid down in Section 53. Section 53 prescribe the mode of delivery inter alia by sending the document by post at registered address and sub-section (2) is the deeming provision for delivery of such letter. In Upendra Kumar Joshi v. Manik Lal Chatterjee and others, 1982 (Vol. 52) Company Cases 177 (Patna), the Patna High Court has followed the decision rendered by this Court in the case of H.P. Gupta (supra) and has rightly arrived at the conclusion that the cause of action would arise at the place where registered office of the company is situated.