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Friday, July 12, 2013

whether the Court, where a cheque is deposited for collection, would have territorial jurisdiction to try the accused for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (in short “the N.I.Act”) or would it be only the Court exercising territorial jurisdiction over the drawee bank or the bank on which the cheque is drawn? = whether the sending of notice from Delhi itself would give rise to a cause of action in taking cognizance under the N.I. Act. In such circumstances, we are of the view that Harman Electronics (supra) is only an authority on the question where a court will have jurisdiction because only notice is issued from the place which falls within its jurisdiction and it does not deviate from the other principles laid down in K. Bhaskaran (supra). This Court has accepted that the place where the cheque was presented and dishonoured has jurisdiction to try the complaint. In this way, this Court concluded that issuance of notice would not by itself give rise to a cause of action but communication of the notice would. In other words, the court clarified only on the service in such notice and failure on the part of the accused to pay the demanded amount within a period of 15 days, thereafter, the commission of an offence completes. We are of the view that this Court in Harman Electronics (supra) affirmed what it had said in K. Bhaskaran (supra) that court within whose jurisdiction the cheque is presented and in whose jurisdiction there is failure to make payment within 15 days of the receipt of notice can have jurisdiction to try the offence under Section 138 of the N.I. Act. It is also relevant to point out that while holding that the Chandigarh Court has jurisdiction, this Court in Harman Electronics (supra) observed that in the case before it, the complaint was silent as to whether the said cheque was presented at Delhi. In the case on hand, it is categorically stated that the cheque was presented at Bhiwani whereas in Harman Electronics (supra) the dishonour had taken place at Chandigarh and this fact was taken into account while holding that Chandigarh court has jurisdiction. In the complaint in question, it is specifically stated that the dishonour took place at Bhiwani. We are also satisfied that nothing said in Harman Electronics (supra) had adverse impact on the complainant’s case in the present case. we must note that in K. Bhaskaran (supra), this Court has held that Section 178 of the Code has widened the scope of jurisdiction of a criminal court and Section 179 of the Code has stretched it to still a wider horizon. Further, for the sake of repetition, we reiterate that the judgment in Ishar Alloy (supra) does not affect the ratio in K. Bhaskaran (supra) which provides jurisdiction at the place of residence of the payer and the payee. We are satisfied that in the facts and circumstances and even on merits, the High Court rightly refused to exercise its extraordinary jurisdiction under Section 482 of the Code and dismissed the petition filed by the appellantaccused. In the light of the above discussion, we hold that the ratio laid down in K.Bhaskaran (supra) squarely applies to the case on hand. The said principle was correctly applied by the learned Sessions Judge as well as the High Court. Consequently, the appeal fails and the same is dismissed. In view of the dismissal of the appeal, the interim order granted by this Court on 09.12.2011 shall stand vacated.

published in http://judis.nic.in/supremecourt/filename=40477
Page 1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL No. 808 OF 2013
(Arising out of S.L.P. (Crl.) No. 9434 of 2011)
Nishant Aggarwal .... Appellant(s)
Versus
Kailash Kumar Sharma .... Respondent(s)
J U D G M E N T
P.Sathasivam,J.
1) Leave granted.
2) The question which has to be decided in this appeal is
whether the Court, where a cheque is deposited for
collection, would have territorial jurisdiction to try the
accused for an offence punishable under Section 138 of the
Negotiable Instruments Act, 1881 (in short “the N.I.Act”) or
would it be only the Court exercising territorial jurisdiction
over the drawee bank or the bank on which the cheque is
drawn?
1Page 2
3) This appeal is directed against the final judgment and
order dated 31.10.2011 passed by the High Court of Punjab
& Haryana at Chandigarh in Criminal Misc. No. M-32542 of
2011 whereby the High Court dismissed the petition filed by
the appellant herein on the ground that it is not a fit case for
invoking Section 482 of the Code of Criminal Procedure,
1973 (hereinafter referred to as “the Code”).
4) Brief facts:
a) The appellant herein is the Director of M/s Byrni Steel
Private Limited and his father Mr. B.L. Aggarwal is the
Managing Director of M/s Mechfeb Engineering Industries
Private Limited situated at Meghalaya and Guwahati. The
respondent was associated with both the abovementioned
firms as he used to bring business from various private firms
and Government Departments on commission basis.
b) During the course of business, the appellant herein
issued a post-dated cheque bearing No. 925504 dated
01.08.2009 drawn on Standard Chartered Bank, Guwahati,
for Rs. 28,62,700/- in favour of the complainant-respondent
herein in order to discharge his legal enforceable liabilities.
2Page 3
Vide letter dated 21.01.2006, the appellant informed the
Branch Manager, Standard Chartered Bank, Guwahati, as
well as the officer in-charge, Dispur Police Station, Guwahati
regarding missing of the said cheque. Thereafter, on
28.03.2008, the appellant wrote a letter to the Standard
Chartered Bank for stop payment of the said cheque as the
same was missing. 
c) According to the respondent, on 13.08.2009, when he
presented the same for collection through its bankers, viz.,
Canara Bank, Bhiwani, Haryana, it was returned unpaid on
11.09.2009 due to stop payment by the appellant. When the
respondent approached the appellant about dishonour of the
same, he was told to present the same again for collection
after one month. On 15.10.2009, the respondent again
presented the cheque for collection but the same was again
returned unpaid on 14.12.2009. 
d) On 11.01.2010, the respondent sent a legal notice to
the appellant asking him to pay Rs. 28,62,700/- within a
period of 15 days from the date of the receipt of the notice
3Page 4
along with the interest, failing which, he shall be liable to be
prosecuted under Section 138(b) of the N.I. Act. 
e) On 05.02.2010, the appellant herein filed a complaint
petition being C.R. No. 340 of 2010 in the Court of Addl.
Chief Judicial Magistrate, Kamrup at Guwahati under
Sections 379, 381,411 and 420 of the Indian Penal Code,
1860 (in short “the IPC”) against the respondent. 
On
05.03.2010, the respondent filed a complaint being C.R. No.
9 of 2010 before the Court of J.M.I.C., Bhiwani under Section
190 of the Code for taking cognizance of the offence
committed by the appellant under Sections 138 and 141 of
the N.I. Act. 
f) The Additional Chief Judicial Magistrate, Kamrup, by
order dated 15.06.2010, in C.R. No. 340 of 2010, issued
bailable warrants against the respondent. Thereafter, on
06.08.2010, the respondent filed an application for recall of
the bailable warrants issued against him.
Ultimately,
learned Judicial Magistrate, Bhiwani, vide order dated
05.03.2011, accepted the application with the observation
that the Court at Bhiwani has no jurisdiction and the
4Page 5
complaint was returned for presentation before the proper
Court having jurisdiction.
g) Dissatisfied with the order dated 05.03.2011, the
respondent filed Criminal Revision Petition being No. 35 of
2011 before the Court of Additional Sessions Judge IV,
Bihwani. By order dated 12.05.2011, the Additional Sessions
Judge set aside the order of the Judicial Magistrate, Bhiwani
and allowed the revision. 
h) Aggrieved by the said order, the appellant herein filed
Crl. Misc. No. M-32542 of 2011 before the High Court. The
High Court, by impugned order dated 31.10.2011, dismissed
the petition. 
i) Against the said order, the appellant has preferred this
appeal by way of special leave before this Court.
5) Heard Mr. Huzefa Ahmadi, learned senior counsel for
the appellant-accused and Mr. Mahabir Singh, learned senior
counsel for the respondent-the complainant.
6) It is the claim of the appellant that the present case is
not covered by the judgment of this Court in K. Bhaskaran
vs. Sankaran Vaidhyan Balan and Another, (1999) 7 SCC
5Page 6
510. On the other hand, it is the specific claim of the
respondent that insofar as territorial jurisdiction of the case
on hand, namely, complaint filed under Section 138 of the
N.I. Act is concerned, the decision of this Court in K.
Bhasaran (supra) squarely applies, accordingly, the Court
at Bhiwani is competent to try and dispose of the complaint
filed by him. It is also pointed out that the said issue was
rightly considered and accepted by the Additional Sessions
Judge, Bhiwani as well as by the High Court.
7) We have already narrated the case of both the parties
in the pleadings portion. In order to answer the only
question, it is relevant to note that the undisputed facts in
the context of territorial jurisdiction of the learned
Magistrate at Bhiwani are that the drawee of the cheque i.e.,
the respondent/complainant is a resident of Bhiwani. The
native village of the respondent, namely, village Barsana is
situated in District Bhiwani. The respondent owns ancestral
agricultural land at village Barsana, District Bhiwani. It is
also asserted that the respondent is running his bank
account with Canara Bank, Bhiwani and is also residing at
6Page 7
the present address for the last about two decades. In view
of the same, it is the claim of the respondent that he
bonafidely presented the cheque in his bank at Bhiwani
which was further presented to the drawer’s Bank at
Guwahati. The cheque was returned uncashed to the
respondent’s bank at Bhiwani with the endorsement
“payment stopped by drawer”. The respondent received the
bounced cheque back from his bank at Bhiwani. Thereafter,
the respondent sent a legal notice under Section 138 of the
N.I. Act to the appellant from Bhiwani. In turn, the appellant
sent a reply to the said notice which the respondent received
at Bhiwani. In view of non-payment of the cheque amount,
the respondent filed a complaint under Sections 138 and 141
of the N.I. Act before the learned Magistrate at Bhiwani.
8) Inasmuch as the issue in question is directly considered
by this Court in K. Bhaskaran (supra), before going into
the applicability of other decisions, it is useful to refer the
relevant portion of the judgment in paras 10 and 11 of the
said case which reads thus:
“10. Learned counsel for the appellant first contended that
the trial court has no jurisdiction to try this case and hence
7Page 8
the High Court should not have converted the acquittal into
conviction on the strength of the evidence collected in
such a trial. Of course, the trial court had upheld the pleas
of the accused that it had no jurisdiction to try the case.
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
the 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 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.
It is clear that this Court also discussed the relevant
provisions of the Code, particularly, Sections 177, 178 and
179 and in the light of the language used, interpreted
Section 138 of the N.I. Act and laid down that Section 138
has five components, namely,
i) drawing of the cheque;
ii) presentation of the cheque to the bank;
iii) returning the cheque unpaid by the drawee bank;
8Page 9
iv) giving notice in writing to the drawer of the cheque
demanding payment of the cheque amount; and
v) failure of the drawer to make payment within 15 days
of the receipt of the notice.
After saying so, this Court concluded that the complainant
can choose any one of the five places to file a complaint.
The further discussion in the said judgment is extracted
hereunder:
“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 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 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
9Page 10
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.”
9) Para 11 of K. Bhaskaran (supra), as quoted above,
clarified the place in the context of territorial jurisdiction as
per the fifth component, namely, “failure of the drawer to
make payment within 15 days of the receipt.” As rightly
pointed out by learned senior counsel for the respondent,
the place of failure to pay the amount has been clearly
qualified by this Court as the place where the drawer resides
or the place where the payee resides. In view of the same
and in the light of the law laid down by this Court in
K.Bhaskaran (supra), we are of the view that the learned
Magistrate at Bhiwani has territorial jurisdiction to try the
complaint filed by the respondent as the respondent is
undisputedly a resident of Bhiwani. Further, in K.
Bhaskaran (supra), while considering the territorial
jurisdiction at great length, this Court has concluded that the
amplitude of territorial jurisdiction pertaining to a complaint
10Page 11
under the N.I. Act is very wide and expansive and we are in
entire agreement with the same.
10) Mr. Ahmadi, learned senior counsel for the appellant in
support of his claim that the Court at Bhiwani has no
jurisdiction heavily relied on the decision of this Court in
Shri Ishar Alloy Steels Ltd. vs. Jayaswals Neco Ltd.,
(2001) 3 SCC 609. We were taken through the entire
judgment. Though the case is also related to N.I. Act, the
issue of territorial jurisdiction was not the subject-matter
thereof. In Ishar Alloy Steels (supra), a three-Judge
Bench of this Court defined the term “the bank” appearing in
clause (a) of Section 138 of the N.I. Act as the drawer’s bank.
It was defined in the context of the statutory period of six
months as mentioned in clause (a), hence, this Court held
that the date of presentation of the cheque for calculating
the statutory time period of six months will be the date of
presentation of the cheque to the drawer’s bank i.e. payee
bank and not the drawee’s bank i.e. collecting bank. This
Court has correctly applied the principle of strict
interpretation appreciating that Section 138 of the N.I. Act
11Page 12
creates an offence as the drawer of the cheque cannot be
expected or saddled with the liability to hold the cheque
amount in his account beyond six months. The reading of
the entire decision in Isher Alloy Steel (supra) shows that
jurisdiction of the Court to take cognizance arises only where
cheque is presented to the bank of drawer either by
drawee’s bank or the drawee/payee personally within six
months. In other words, the analysis of the said decision,
the ratio of Isher Alloy Steel (supra) deals with such a
situation where the cheque has been presented within six
months to the drawer’s bank by the payee in any manner.
Inasmuch as the interpretation relates to filing of complaint
within the statutory time period of six months, we are of the
view that the reliance on the law laid down in Isher Alloy
Steel (supra) has no relevance as far as the present case is
concerned. In fact, that is the reason that in Isher Alloy
Steel (supra), the judgment in K.Bhaskaran (supra) was
not discussed since territorial jurisdiction was not the issue
in that case. In view of the same, the definition of the term
“the bank” envisaged in Isher Alloy Steel (supra) cannot
12Page 13
be employed to decide the jurisdictional aspect and dilute
the ratio of the judgment in K. Bhaskaran (supra). Hence,
we are of the view that on the strength of the judgment in
Isher Alloy Steel (supra) defining the term “the bank”, it
cannot be said that jurisdiction to file a complaint under
Section 138 of the N.I. Act does not lie at the place of
drawee’s bank. To put it clearly, the judgment in Isher Alloy
Steel (supra) does not affect the ratio of the judgment in
K.Bhaskaran (supra) which provides for jurisdiction at the
place of residence of the payer and the payee. In such
circumstances, we are of the view that the judgment in
Isher Alloy Steel (supra) as well as judgments of various
High Courts relied on by the appellant cannot be read
against the respondent to hold that the Magistrate at
Bhiwani does not have the jurisdiction to try the complaint.
11) Though several decisions of various High Courts were
cited before us, we deem it appropriate to refer only one
Division Bench decision of the Bombay High Court rendered
in Criminal Writ Petition No. 3158 of 2009, Mrs. Preetha S.
Babu vs. Voltas Limited and Another, reported in 2010
13Page 14
(3) Maharashtra Law Journal 234. The Division Bench, after
analyzing the factual position of both sides, correctly applied
the ratio laid down in K. Bhaskaran (supra) finding that
the Mumbai Court has jurisdiction to entertain the complaint,
dismissed the said writ petition.
12) Mr. Ahmadi, learned senior counsel for the appellant
has also relied on a decision of this Court in Harman
Electronics Private Limited and Another vs. National
Panasonic India Private Limited, (2009) 1 SCC 720. In
Harman Electronics (supra), the complainant and the
accused entered into a business transaction. The accused
was a resident of Chandigarh. He carried on the business in
Chandigarh and issued a cheque in question at Chandigarh.
The complainant had a Branch Office at Chandigarh although
his Head Office was at Delhi. He presented the cheque given
by the accused at Chandigarh. The cheque was dishonoured
at Chandigarh. The complainant issued a notice upon the
accused asking him to pay the amount from New Delhi. The
said notice was served on the accused at Chandigarh. On
failure on the part of the accused to pay the amount within
14Page 15
15 days from the date of the communication of the said
letter, the complainant filed a complaint at Delhi. In the
complaint, it was stated that the Delhi Court has jurisdiction
to try the case because the complainant was carrying on
business at Delhi, the demand notice was issued from Delhi,
the amount of cheque was payable at Delhi and the accused
failed to make the payment of the said cheque within the
statutory period of 15 days from the date of receipt of
notice. It is further seen that the cognizance of the offence
was taken by the learned Magistrate at Delhi. The accused
questioned the jurisdiction of the Magistrate at Delhi before
the Addl. Sessions Judge, New Delhi. The Sessions Judge
held that the Magistrate at Delhi had jurisdiction to entertain
the complaint as, admitedly, the notice was sent by the
complainant to the accused from Delhi and the complainant
was having its Registered Office at Delhi and was carrying on
business at Delhi. The learned Judge has also observed that
the accused failed to make payment at Delhi as the demand
was made from Delhi and the payment was to be made to
the complainant at Delhi. The Delhi High Court dismissed
15Page 16
the petition filed by the accused. Thereafter, the accused
approached this Court.
This Court considered Section 138 of
the N.I. Act and also referred to K.Bhaskaran’s case
(supra) and quoted the five components of offence under
Section 138 which have been noted in paragraph supra. This
Court reiterated that the five different acts which are the
components of offence under Section 138 of the N.I. Act
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 N.I. Act and the complainant would be at liberty to file
a complaint at any of those places. Ultimately, this Court
held that the Chandigarh Court had jurisdiction to entertain
the complaint because the parties were carrying on business
at Chandigarh, Branch Office of the complainant was also in
Chandigarh, the transactions were carried on only from
Chandigarh and the cheque was issued and presented at
Chandigarh. This Court pointed out that the complaint did
not show that the cheque was presented at Delhi, because it
was absolutely silent in that regard and, therefore, there was
16Page 17
no option but to presume that the cheque was presented at
Chandigarh. 
It is not in dispute that the dishonour of the
cheque also took place at Chandigarh and, therefore, the
only question which arose before this Court for consideration
was
whether the sending of notice from Delhi itself would
give rise to a cause of action in taking cognizance under the
N.I. Act. In such circumstances, we are of the view that
Harman Electronics (supra) is only an authority on the
question where a court will have jurisdiction because only
notice is issued from the place which falls within its
jurisdiction and it does not deviate from the other principles
laid down in K. Bhaskaran (supra). 
This Court has
accepted that the place where the cheque was presented
and dishonoured has jurisdiction to try the complaint. In this
way, this Court concluded that issuance of notice would not
by itself give rise to a cause of action but communication of
the notice would. 
In other words, the court clarified only on
the service in such notice and failure on the part of the
accused to pay the demanded amount within a period of 15
days, thereafter, the commission of an offence completes.
17Page 18
We are of the view that this Court in Harman Electronics
(supra) affirmed what it had said in K. Bhaskaran (supra)
that court within whose jurisdiction the cheque is presented
and in whose jurisdiction there is failure to make payment
within 15 days of the receipt of notice can have jurisdiction
to try the offence under Section 138 of the N.I. Act.
 It is also
relevant to point out that while holding that the Chandigarh
Court has jurisdiction, this Court in Harman Electronics
(supra) observed that in the case before it, the complaint
was silent as to whether the said cheque was presented at
Delhi. 
In the case on hand, it is categorically stated that the
cheque was presented at Bhiwani whereas in Harman
Electronics (supra) the dishonour had taken place at
Chandigarh and this fact was taken into account while
holding that Chandigarh court has jurisdiction. 
In the
complaint in question, it is specifically stated that the
dishonour took place at Bhiwani. We are also satisfied that
nothing said in Harman Electronics (supra) had adverse
impact on the complainant’s case in the present case.
13) As observed earlier,
we must note that in K.
18Page 19
Bhaskaran (supra), this Court has held that 
Section 178 of
the Code has widened the scope of jurisdiction of a criminal
court and Section 179 of the Code has stretched it to still a
wider horizon. Further, for the sake of repetition, we
reiterate that the judgment in Ishar Alloy (supra) does not
affect the ratio in K. Bhaskaran (supra) which provides
jurisdiction at the place of residence of the payer and the
payee. We are satisfied that in the facts and circumstances
and even on merits, the High Court rightly refused to
exercise its extraordinary jurisdiction under Section 482 of
the Code and dismissed the petition filed by the appellantaccused. 
14) In the light of the above discussion, we hold that the
ratio laid down in K.Bhaskaran (supra) squarely applies to
the case on hand. 
The said principle was correctly applied
by the learned Sessions Judge as well as the High Court.
Consequently, the appeal fails and the same is dismissed. In
view of the dismissal of the appeal, the interim order
granted by this Court on 09.12.2011 shall stand vacated. 
………….…………………………J.
19Page 20
(P. SATHASIVAM)
 ………….…………………………J.
(JAGDISH SINGH KHEHAR)
NEW DELHI;
JULY 01, 2013.
20

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