Return of Cheque bounce complaints by Delhi High court -Metropolitan Magistrates in Delhi have taken cognizance only because the statutory notices in terms of proviso to Section 138 of the Act have been issued to the drawers of the cheque from Delhi. - Apex court held that we have no hesitation in holding that the issue of a notice from Delhi or deposit of the cheque in a Delhi bank by the payee or receipt of the notice by the accused demanding payment in Delhi would not confer jurisdiction upon the Courts in Delhi. What is important is whether the drawee bank who dishonoured the cheque is situate within the jurisdiction of the Court taking cognizance. In that view, we see no reason to interfere with the order passed by the High Court which simply requires the Magistrate to examine and return the complaints if they do not have the jurisdiction to entertain the same in the light of the legal position as stated in Harman’s case (supra). All that we need to add is that while examining the question of jurisdiction the Metropolitan Magistrates concerned to whom the High Court has issued directions shall also keep in view the decision of this Court in Dashrath’s case (supra).=
whereby the High Court has invoked its jurisdiction under Article
226 of the Constitution of India read with Section 482 of Cr.P.C. and
directed return of all complaints filed under Section 138 of the Negotiable
Instrument Act, 1881 in which the Metropolitan Magistrates in Delhi have
taken cognizance only because the statutory notices in terms of proviso to
Section 138 of the Act have been issued to the drawers of the cheque from
Delhi. =
The legal position on the subject was summed
up in the following words:
“To sum up:
(i) An offence under Section 138 of the Negotiable Instruments Act, 1881
is committed no sooner a cheque drawn by the accused on an account being
maintained by him in a bank for discharge of debt/liability is returned
unpaid for insufficiency of funds or for the reason that the amount exceeds
the arrangement made with the bank.
(ii) Cognizance of any such offence is however forbidden under Section 142
of the Act except upon a complaint in writing made by the payee or holder
of the cheque in due course within a period of one month from the date the
cause of action accrues to such payee or holder under clause (c) of proviso
to Section 138.
(iii) The cause of action to file a complaint accrues to a
complainant/payee/holder of a cheque in due course if
(a) the dishonoured cheque is presented to the drawee bank within a
period of six months from the date of its issue.
(b) If the complainant has demanded payment of cheque amount within thirty
days of receipt of information by him from the bank regarding the dishonour
of the cheque and
(c) If the drawer has failed to pay the cheque amount within fifteen days
of receipt of such notice.
(iv) The facts constituting cause of action do not constitute the
ingredients of the offence under Section 138 of the Act.
(v) The proviso to Section 138 simply postpones/defers institution of
criminal proceedings and taking of cognizance by the Court till such time
cause of action in terms of clause (c) of proviso accrues to the
complainant.
(vi) Once the cause of action accrues to the complainant, the jurisdiction
of the Court to try the case will be determined by reference to the place
where the cheque is dishonoured.
(vii) The general rule stipulated under Section 177 of Cr.P.C applies to
cases under Section 138 of the Negotiable Instruments Act. Prosecution in
such cases can, therefore, be launched against the drawer of the cheque
only before the Court within whose jurisdiction the dishonour takes place
except in situations where the offence of dishonour of the cheque
punishable under Section 138 is committed along with other offences in a
single transaction within the meaning of Section 220(1) read with Section
184 of the Code of Criminal Procedure or is covered by the provisions of
Section 182(1) read with Sections 184 and 220 thereof.”
6. In the light of the above pronouncement of this Court we have no
hesitation in holding that the issue of a notice from Delhi or deposit of
the cheque in a Delhi bank by the payee or receipt of the notice by the
accused demanding payment in Delhi would not confer jurisdiction upon the
Courts in Delhi. What is important is whether the drawee bank who
dishonoured the cheque is situate within the jurisdiction of the Court
taking cognizance. In that view, we see no reason to interfere with the
order passed by the High Court which simply requires the Magistrate to
examine and return the complaints if they do not have the jurisdiction to
entertain the same in the light of the legal position as stated in Harman’s
case (supra). All that we need to add is that while examining the question
of jurisdiction the Metropolitan Magistrates concerned to whom the High
Court has issued directions shall also keep in view the decision of this
Court in Dashrath’s case (supra).
7. With the above observations these appeals fail and are hereby
dismissed but in the circumstances without any orders as to costs.
2014 - Sept. Month - http://judis.nic.in/supremecourt/filename=41877
T.S. THAKUR, V. GOPALA GOWDA, C. NAGAPPAN
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8468 OF 2014
(Arising out of S.L.P. (C) No.29044 of 2009)
Vinay Kumar Shailendra …Appellant
Versus
Delhi High Court Legal Services Committee
and Anr. …Respondents
With
CIVIL APPEAL NO. 8469 OF 2014
(Arising out of SLP (C) No.35762/2009)
J U D G M E N T
T.S. THAKUR, J.
1. Leave granted.
2. These appeals arise out of a judgment dated 23rd September, 2009
passed by a Division Bench of the High Court of Delhi in W.P. (C) No. 11911
of 2009 whereby the High Court has invoked its jurisdiction under Article
226 of the Constitution of India read with Section 482 of Cr.P.C. and
directed return of all complaints filed under Section 138 of the Negotiable
Instrument Act, 1881 in which the Metropolitan Magistrates in Delhi have
taken cognizance only because the statutory notices in terms of proviso to
Section 138 of the Act have been issued to the drawers of the cheque from
Delhi. The matter arose out of a writ petition filed by the Delhi High
Court Legal Services Committee in public interest pointing out that a very
large number of complaints under Section 138 of the Act were pending in
Courts of Metropolitan Magistrates in Delhi in which cognizance had been
taken although the Courts concerned had no territorial jurisdiction to do
so. The Committee’s case before the High Court was that such complaints
were filed among others by financial institutions and banks only on the
ground that the statutory notices demanding payment against the dishonoured
cheque had been issued from Delhi. Issue of a notice demanding payment of
the dishonoured cheque was not, however, sufficient to confer jurisdiction
upon the Courts in Delhi argued the Committee. Reliance in support was
placed upon the decision of this Court in Harman Electronics Private
Limited and Anr. v. National Panasonic India Private Limited (2009) 1 SCC
720. The Committee’s grievance was that notwithstanding a clear exposition
of law on the subject by this Court in Harman’s case (supra) complaints
had been filed and cognizance taken by the Courts in Delhi, relying upon
the decision of this Court in K. Bhaskaran v. Sankaran Vaidhyan Balan
(1999) 7 SCC 510. It was in terms contended before the High Court that in
the light of the pronouncement of this Court in Harman’s case (supra) the
complaints could not have been entertained nor could the accused persons be
summoned for trial in the Courts in Delhi. It was also argued that number
of such complaints is so large that the Magistrates in Delhi were unable to
handle and effectively manage the docket explosion and attend to what was
otherwise within their jurisdiction and called for their immediate
attention.
3. The contentions urged by the Committee found favour with the High
Court who relying upon the decisions of this Court in Dwarka Nath v. Income-
tax Officer, Special Circle, D Ward, Kanpur and Anr. (AIR 1966 SC 81) and
Air India Statutory Corporation and Ors. V. United Labour Union and Ors.
(1997) 9 SCC 377 held that the Constitution did not place any fetters on
the extraordinary jurisdiction exercisable by the High Court in a situation
where Courts are flooded with complaints which they had no jurisdiction to
entertain. The High Court further held that a direction for return of the
complaints for presentation before the competent Courts was in the
circumstances necessary, as Magistrates who had issued the summons were
unable to dismiss the complaints suo moto in the light of the decision of
this Court in Adalat Prasad Rooplal v. Jindal & Ors. (2004) 7 SCC 338. The
High Court accordingly allowed the writ petition with the following
directions:
“Consequently, in exercise of power under Article 226 of the Constitution
read with Section 482 of Code of Criminal Procedure, we direct return to
the complainants for presentation in the Court of competent jurisdiction
all those criminal complaints filed under Section 138 of NI Act that are
pending in the courts of Metropolitan Magistrates in Delhi in which
cognizance has been taken by them without actually having territorial
jurisdiction.”
4. The appellant who is a practicing Advocate of the High Court of Delhi
has, with the permission of this Court, filed this appeal which was
referred for hearing to a three-Judge Bench by an order dated 3rd November,
2009. That is precisely how the present appeal alongwith the connected
appeal filed by Indiabulls Financial Services Ltd. against the very same
order passed by the High Court have come up before us.
5. We have heard learned counsel for the parties at some length. The
order passed by the High Court simply directs return of complaints in cases
where the same have been filed only because the statutory notices have been
issued from Delhi. The direction proceeds on the basis that issue of
statutory notices from Delhi by itself is not sufficient to confer
jurisdiction on the Delhi Courts to entertain the complaints. Reliance has
been placed for that proposition upon the decision of this Court in
Harman’s case (supra). In Dashrath Rupsingh Rathod v. State of Maharashtra
and Anr. (2014) 9 SCALE 97 we have had an occasion to consider whether the
view expressed by this Court in K. Bhaskaran’s case (supra) was sound and
whether complaints under Section 138 could be maintained at a place other
than the place where the drawee bank is situate. Answering the question in
the negative this Court held that an offence under Section 138 is committed
no sooner the cheque issued on an account maintained by the drawer with a
bank and representing discharge of a debt or a liability in full or part is
dishonoured on the ground of insufficiency of funds or on the ground that
the same exceeds the arrangements made with the banker. Prosecution of the
offender and cognizance of the commission of the offence is, however,
deferred by the proviso to Section 138 till such time the complainant has
the cause of action to institute such proceedings. This Court found that
the proviso to Section 138 does not constitute ingredients of the offence
punishable under Section 138. The legal position on the subject was summed
up in the following words:
“To sum up:
(i) An offence under Section 138 of the Negotiable Instruments Act, 1881
is committed no sooner a cheque drawn by the accused on an account being
maintained by him in a bank for discharge of debt/liability is returned
unpaid for insufficiency of funds or for the reason that the amount exceeds
the arrangement made with the bank.
(ii) Cognizance of any such offence is however forbidden under Section 142
of the Act except upon a complaint in writing made by the payee or holder
of the cheque in due course within a period of one month from the date the
cause of action accrues to such payee or holder under clause (c) of proviso
to Section 138.
(iii) The cause of action to file a complaint accrues to a
complainant/payee/holder of a cheque in due course if
(a) the dishonoured cheque is presented to the drawee bank within a
period of six months from the date of its issue.
(b) If the complainant has demanded payment of cheque amount within thirty
days of receipt of information by him from the bank regarding the dishonour
of the cheque and
(c) If the drawer has failed to pay the cheque amount within fifteen days
of receipt of such notice.
(iv) The facts constituting cause of action do not constitute the
ingredients of the offence under Section 138 of the Act.
(v) The proviso to Section 138 simply postpones/defers institution of
criminal proceedings and taking of cognizance by the Court till such time
cause of action in terms of clause (c) of proviso accrues to the
complainant.
(vi) Once the cause of action accrues to the complainant, the jurisdiction
of the Court to try the case will be determined by reference to the place
where the cheque is dishonoured.
(vii) The general rule stipulated under Section 177 of Cr.P.C applies to
cases under Section 138 of the Negotiable Instruments Act. Prosecution in
such cases can, therefore, be launched against the drawer of the cheque
only before the Court within whose jurisdiction the dishonour takes place
except in situations where the offence of dishonour of the cheque
punishable under Section 138 is committed along with other offences in a
single transaction within the meaning of Section 220(1) read with Section
184 of the Code of Criminal Procedure or is covered by the provisions of
Section 182(1) read with Sections 184 and 220 thereof.”
6. In the light of the above pronouncement of this Court we have no
hesitation in holding that the issue of a notice from Delhi or deposit of
the cheque in a Delhi bank by the payee or receipt of the notice by the
accused demanding payment in Delhi would not confer jurisdiction upon the
Courts in Delhi. What is important is whether the drawee bank who
dishonoured the cheque is situate within the jurisdiction of the Court
taking cognizance. In that view, we see no reason to interfere with the
order passed by the High Court which simply requires the Magistrate to
examine and return the complaints if they do not have the jurisdiction to
entertain the same in the light of the legal position as stated in Harman’s
case (supra). All that we need to add is that while examining the question
of jurisdiction the Metropolitan Magistrates concerned to whom the High
Court has issued directions shall also keep in view the decision of this
Court in Dashrath’s case (supra).
7. With the above observations these appeals fail and are hereby
dismissed but in the circumstances without any orders as to costs.
………………………………….…..…J.
(T.S. THAKUR)
.……………………………….…..…J.
(V. GOPALA GOWDA)
………………………..……………..J.
(C. NAGAPPAN)
New Delhi
September 4, 2014
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1911 OF 2014
(Arising out of S.L.P. (Crl.) No.5644 of 2010)
Times Business Solution Limited …Appellant
Versus
Databyte …Respondent
With
CRIMINAL APPEAL NO. 1912 OF 2014
(Arising out of S.L.P. (Crl.) No.5645 of 2010)
With
CRIMINAL APPEAL NO. 1913 OF 2014
(Arising out of S.L.P. (Crl.) No.5280 of 2010)
J U D G M E N T
T.S. THAKUR, J.
1. Leave granted.
2. These three appeals arise out of an order dated 1st February, 2010
passed by the High Court of Bombay whereby Criminal M.C. Nos. 281 of 2010,
282 of 2010 and 296 of 2010 filed by the appellants have been dismissed and
the orders passed by the Metropolitan Magistrate returning the complaints
filed by the appellants under Section 138 of the Negotiable Instrument Act,
1881 for presentation before the competent Court upheld.
3. It is common ground that the cheques in all the three cases had been
issued on different branches namely, Bank of India, Ruby Park and ICICI
Bank, Kolkata and Punjab National Bank, Chapraula, Gautam Budh Nagar, U.P.
which are outside Delhi. Complaints under Section 138 of the NI Act were
all the same filed in Delhi because the cheques had been deposited by the
complainants in their Delhi bank accounts for collection and because notice
of dishonour was issued to the accused persons from Delhi. Relying upon
the decision of this Court in Ishar Alloy Steels Ltd. v. Jayaswals Neco
Ltd. (2001) 3 SCC 609 the High Court held that mere presentation of cheques
before banks in Delhi when the drawee bank is situated outside Delhi will
not confer jurisdiction upon the Delhi courts nor will the issue of a
notice of dishonour from Delhi would do so. That view, in our opinion, is
unexceptionable having regard to the decision of this Court in Dashrath
Rupsingh Rathod v. State of Maharashtra and Another (2014) 9 SCALE 97. This
Court has in that case examined at length the principles underlying Section
138 and held that a unilateral act of presentation of the cheque anywhere
in the country or issue of a notice of dishonour from a place chosen by the
complainant does not by itself confer jurisdiction upon the Court from
within whose jurisdiction such presentation is made or notice issued.
Following the view taken by this Court in Dashrath’s case (supra) we have
no hesitation in holding that the High Court was justified in refusing to
interfere with the orders passed by the Metropolitan Magistrate. These
appeals accordingly fail and are hereby dismissed but in the circumstances
without any no orders as to costs.
………………………………….…..…J.
(T.S. THAKUR)
.……………………………….…..…J.
(V. GOPALA GOWDA)
………………………..……………..J.
(C. NAGAPPAN)
New Delhi
September 4, 2014
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1914 OF 2014
(Arising out of S.L.P. (Crl.) No.690 of 2011)
M/s K K. Ploycolor India Ltd. & Ors. …Appellants
Versus
Global Trade Finance Ltd. & Anr. …Respondents
With
CRIMINAL APPEAL NO. 1915 OF 2014
(Arising out of S.L.P. (Crl.) No.718 of 2011)
With
CRIMINAL APPEAL NO. 1916 OF 2014
(Arising out of S.L.P. (Crl.) No.749 of 2011)
J U D G M E N T
T.S. THAKUR, J.
1. Leave granted.
2. These appeals arise out of an order dated 15th September, 2010 passed
by the High Court of Judicature at Bombay whereby Crl. Application
Nos.1491, 2759 and 2760 of 2010 have been allowed and the orders passed by
the Magistrate set aside and the matter remitted back to the Magistrate
with the direction that the criminal complaints filed by the complainants-
respondents herein shall be disposed of expeditiously.
3. Complaints under Section 138 of the Negotiable Instrument Act, 1880
appear to have been filed by the respondent-company in the Court of
Metropolitan Magistrate, Bandra which were entertained by the Magistrate
and process issued against the accused persons. Revision applications were
then filed before the Court of Sessions at Bombay challenging the
jurisdiction of the Magistrate to entertain the complaints. The Revisional
Court relying upon Harman Electronics Private Limited and Anr. v. National
Panasonic India Private Limited (2009) 1 SCC 720 held that the Magistrate
did not have the jurisdiction to entertain the complaints. The orders
passed by the Magistrate were set aside and the complaints directed to be
returned for presentation before the competent Court. Aggrieved by the said
orders the complainant preferred Criminal Applications No.1491, 2759 and
2760 of 2010 before the High Court who relying upon the decision of this
Court in K. Bhaskaran v. Sankaran Vaidhyan Balan (1999) 7 SCC 510 and three
other decisions of the Bombay High Court held that the Magistrate had the
jurisdiction to entertain the complaint as the cheque had been presented
before a bank at Bombay which fact was, according to the High Court,
sufficient to confer jurisdiction upon the Magistrate to entertain the
complaints and try the cases. The orders passed by the Revisional Court
were accordingly set aside and the Magistrate directed to proceed with the
trial of the cases expeditiously as already noticed. The present special
leave petitions have been filed by the accused persons assailing the view
taken by the High Court.
4. A plain reading of the orders passed by the High Court would show
that the judgment proceeds entirely on the authority of the decision of
this Court in K. Bhaskaran’s case (supra). That decision has been reversed
by this Court in Dashrath Rupsingh Rathod v. State of Maharashtra and Anr.
(2014) 9 SCALE 97. This Court has, on an elaborate consideration of the
provision of Section 138 and the law on the subject, held that presentation
of a cheque for collection on the drawee bank or issue of a notice from a
place of the choice of the complainant would not by themselves confer
jurisdiction upon the Courts where cheque is presented for collection or
the default notice issued demanding payment from the drawer of the cheque.
Following the said decision we have no hesitation in holding that the High
Court was wrong in interfering with the order passed by the Sessions Judge.
5. We accordingly allow these appeals and set aside the order passed by
the High Court and restore those passed by the Revisional Court. The
parties are, however, left to bear their own costs.
………………………………….…..…J.
(T.S. THAKUR)
.……………………………….…..…J.
(V. GOPALA GOWDA)
………………………..……………..J.
(C. NAGAPPAN)
New Delhi
September 4, 2014
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1917 OF 2014
(Arising out of S.L.P. (Crl.) No.7619 of 2011)
Suku …Appellant
Versus
Jagdish and Anr. …Respondents
With
CRIMINAL APPEAL NO. 1918 OF 2014
(Arising out of S.L.P. (Crl.) No.7772 of 2011)
J U D G M E N T
T.S. THAKUR, J.
1. Leave granted.
2. These appeals arise out of an order dated 15th June, 2011 passed by
the High Court of Kerala at Ernakulam whereby the High Court has held that
the presentation of a cheque by the complainant in a bank at Krishnapuram,
Kayamkulam, Kerala did not confer jurisdiction upon Courts at Kayamkulam to
entertain a complaint under Section 138 of the Negotiable Instruments Act
and try the accused persons for the offence.
3. It is not in dispute that the cheque in question was issued by the
respondent on Syndicate Bank, Gokaran branch in Karnataka which was
presented for collection by the complainant at Krishnapuram, Kayamkulam,
Kerala but dishonoured for insufficiency of funds. The complainant then
filed complaint at Kayamkulam in the State of Kerala which were returned by
the Magistrate to be filed before the proper Court as the Court at
Kayamkulam, Kerala, had no territorial jurisdiction to entertain the same.
The matter was taken up before the High Court by the complainants in Crl.
M.C. Nos.514 of 2011 and 1653 of 2011 which the High Court has dismissed by
the impugned order holding that the presentation of the cheque to a Bank in
Kerala would not by itself confer jurisdiction upon the Kerala Court. The
High Court has in support of that view relied upon the decision of this
Court in Harman Electronics Private Limited and Anr. v. National Panasonic
India Private Limited (2009) 1 SCC 720 where this Court held that the
issue of notice to the drawer of the cheque does not by itself give rise to
a cause of action to confer jurisdiction upon the Court to take cognizance.
4. The view taken by the Magistrate based as it is on the decision of
this Court in Harman’s case (supra) does not, in our opinion, call for any
interference by this Court, in the light of the pronouncement of this Court
in Dashrath Rupsingh Rathod v. State of Maharashtra and Another (2014) 9
SCALE 97 where this Court has examined the issue at some length and held
that presentation of a cheque by the complainant at a place of his choice
or issue of notice by him to the accused demanding payment of the cheque
amount are not sufficient by themselves to confer jurisdiction upon the
courts where such cheque was presented or notice issued. Following the
decision in Dashrath Rupsingh Rathod’s case (supra), we affirm the order
passed by the High Court.
5. These appeals accordingly fail and are, hereby, dismissed but in the
circumstances without any orders as to costs.
………………………………….…..…J.
(T.S. THAKUR)
.……………………………….…..…J.
(V. GOPALA GOWDA)
………………………..……………..J.
(C. NAGAPPAN)
New Delhi
September 4, 2014
REPPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL ORIGINAL JURISDICTION
TRANSFER PETITION (CRL.)NO. 338 OF 2010
T.A.M.A. Jawahar …Appellant
Versus
Arun Kumar Gupta …Respondent
AND
TRANSFERRED CASE (CRL.) NO.4 OF 2012
J U D G M E N T
T.S. THAKUR, J.
Transfer Petition (Crl.) No.338 of 2010 and Transferred Case (Crl.) No.4 of
2012 are delinked and to be posted for hearing separately.
………………………………….…..…J.
(T.S. THAKUR)
.……………………………….…..…J.
(V. GOPALA GOWDA)
………………………..……………..J.
(C. NAGAPPAN)
New Delhi
September 4, 2014
whereby the High Court has invoked its jurisdiction under Article
226 of the Constitution of India read with Section 482 of Cr.P.C. and
directed return of all complaints filed under Section 138 of the Negotiable
Instrument Act, 1881 in which the Metropolitan Magistrates in Delhi have
taken cognizance only because the statutory notices in terms of proviso to
Section 138 of the Act have been issued to the drawers of the cheque from
Delhi. =
The legal position on the subject was summed
up in the following words:
“To sum up:
(i) An offence under Section 138 of the Negotiable Instruments Act, 1881
is committed no sooner a cheque drawn by the accused on an account being
maintained by him in a bank for discharge of debt/liability is returned
unpaid for insufficiency of funds or for the reason that the amount exceeds
the arrangement made with the bank.
(ii) Cognizance of any such offence is however forbidden under Section 142
of the Act except upon a complaint in writing made by the payee or holder
of the cheque in due course within a period of one month from the date the
cause of action accrues to such payee or holder under clause (c) of proviso
to Section 138.
(iii) The cause of action to file a complaint accrues to a
complainant/payee/holder of a cheque in due course if
(a) the dishonoured cheque is presented to the drawee bank within a
period of six months from the date of its issue.
(b) If the complainant has demanded payment of cheque amount within thirty
days of receipt of information by him from the bank regarding the dishonour
of the cheque and
(c) If the drawer has failed to pay the cheque amount within fifteen days
of receipt of such notice.
(iv) The facts constituting cause of action do not constitute the
ingredients of the offence under Section 138 of the Act.
(v) The proviso to Section 138 simply postpones/defers institution of
criminal proceedings and taking of cognizance by the Court till such time
cause of action in terms of clause (c) of proviso accrues to the
complainant.
(vi) Once the cause of action accrues to the complainant, the jurisdiction
of the Court to try the case will be determined by reference to the place
where the cheque is dishonoured.
(vii) The general rule stipulated under Section 177 of Cr.P.C applies to
cases under Section 138 of the Negotiable Instruments Act. Prosecution in
such cases can, therefore, be launched against the drawer of the cheque
only before the Court within whose jurisdiction the dishonour takes place
except in situations where the offence of dishonour of the cheque
punishable under Section 138 is committed along with other offences in a
single transaction within the meaning of Section 220(1) read with Section
184 of the Code of Criminal Procedure or is covered by the provisions of
Section 182(1) read with Sections 184 and 220 thereof.”
6. In the light of the above pronouncement of this Court we have no
hesitation in holding that the issue of a notice from Delhi or deposit of
the cheque in a Delhi bank by the payee or receipt of the notice by the
accused demanding payment in Delhi would not confer jurisdiction upon the
Courts in Delhi. What is important is whether the drawee bank who
dishonoured the cheque is situate within the jurisdiction of the Court
taking cognizance. In that view, we see no reason to interfere with the
order passed by the High Court which simply requires the Magistrate to
examine and return the complaints if they do not have the jurisdiction to
entertain the same in the light of the legal position as stated in Harman’s
case (supra). All that we need to add is that while examining the question
of jurisdiction the Metropolitan Magistrates concerned to whom the High
Court has issued directions shall also keep in view the decision of this
Court in Dashrath’s case (supra).
7. With the above observations these appeals fail and are hereby
dismissed but in the circumstances without any orders as to costs.
2014 - Sept. Month - http://judis.nic.in/supremecourt/filename=41877
T.S. THAKUR, V. GOPALA GOWDA, C. NAGAPPAN
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8468 OF 2014
(Arising out of S.L.P. (C) No.29044 of 2009)
Vinay Kumar Shailendra …Appellant
Versus
Delhi High Court Legal Services Committee
and Anr. …Respondents
With
CIVIL APPEAL NO. 8469 OF 2014
(Arising out of SLP (C) No.35762/2009)
J U D G M E N T
T.S. THAKUR, J.
1. Leave granted.
2. These appeals arise out of a judgment dated 23rd September, 2009
passed by a Division Bench of the High Court of Delhi in W.P. (C) No. 11911
of 2009 whereby the High Court has invoked its jurisdiction under Article
226 of the Constitution of India read with Section 482 of Cr.P.C. and
directed return of all complaints filed under Section 138 of the Negotiable
Instrument Act, 1881 in which the Metropolitan Magistrates in Delhi have
taken cognizance only because the statutory notices in terms of proviso to
Section 138 of the Act have been issued to the drawers of the cheque from
Delhi. The matter arose out of a writ petition filed by the Delhi High
Court Legal Services Committee in public interest pointing out that a very
large number of complaints under Section 138 of the Act were pending in
Courts of Metropolitan Magistrates in Delhi in which cognizance had been
taken although the Courts concerned had no territorial jurisdiction to do
so. The Committee’s case before the High Court was that such complaints
were filed among others by financial institutions and banks only on the
ground that the statutory notices demanding payment against the dishonoured
cheque had been issued from Delhi. Issue of a notice demanding payment of
the dishonoured cheque was not, however, sufficient to confer jurisdiction
upon the Courts in Delhi argued the Committee. Reliance in support was
placed upon the decision of this Court in Harman Electronics Private
Limited and Anr. v. National Panasonic India Private Limited (2009) 1 SCC
720. The Committee’s grievance was that notwithstanding a clear exposition
of law on the subject by this Court in Harman’s case (supra) complaints
had been filed and cognizance taken by the Courts in Delhi, relying upon
the decision of this Court in K. Bhaskaran v. Sankaran Vaidhyan Balan
(1999) 7 SCC 510. It was in terms contended before the High Court that in
the light of the pronouncement of this Court in Harman’s case (supra) the
complaints could not have been entertained nor could the accused persons be
summoned for trial in the Courts in Delhi. It was also argued that number
of such complaints is so large that the Magistrates in Delhi were unable to
handle and effectively manage the docket explosion and attend to what was
otherwise within their jurisdiction and called for their immediate
attention.
3. The contentions urged by the Committee found favour with the High
Court who relying upon the decisions of this Court in Dwarka Nath v. Income-
tax Officer, Special Circle, D Ward, Kanpur and Anr. (AIR 1966 SC 81) and
Air India Statutory Corporation and Ors. V. United Labour Union and Ors.
(1997) 9 SCC 377 held that the Constitution did not place any fetters on
the extraordinary jurisdiction exercisable by the High Court in a situation
where Courts are flooded with complaints which they had no jurisdiction to
entertain. The High Court further held that a direction for return of the
complaints for presentation before the competent Courts was in the
circumstances necessary, as Magistrates who had issued the summons were
unable to dismiss the complaints suo moto in the light of the decision of
this Court in Adalat Prasad Rooplal v. Jindal & Ors. (2004) 7 SCC 338. The
High Court accordingly allowed the writ petition with the following
directions:
“Consequently, in exercise of power under Article 226 of the Constitution
read with Section 482 of Code of Criminal Procedure, we direct return to
the complainants for presentation in the Court of competent jurisdiction
all those criminal complaints filed under Section 138 of NI Act that are
pending in the courts of Metropolitan Magistrates in Delhi in which
cognizance has been taken by them without actually having territorial
jurisdiction.”
4. The appellant who is a practicing Advocate of the High Court of Delhi
has, with the permission of this Court, filed this appeal which was
referred for hearing to a three-Judge Bench by an order dated 3rd November,
2009. That is precisely how the present appeal alongwith the connected
appeal filed by Indiabulls Financial Services Ltd. against the very same
order passed by the High Court have come up before us.
5. We have heard learned counsel for the parties at some length. The
order passed by the High Court simply directs return of complaints in cases
where the same have been filed only because the statutory notices have been
issued from Delhi. The direction proceeds on the basis that issue of
statutory notices from Delhi by itself is not sufficient to confer
jurisdiction on the Delhi Courts to entertain the complaints. Reliance has
been placed for that proposition upon the decision of this Court in
Harman’s case (supra). In Dashrath Rupsingh Rathod v. State of Maharashtra
and Anr. (2014) 9 SCALE 97 we have had an occasion to consider whether the
view expressed by this Court in K. Bhaskaran’s case (supra) was sound and
whether complaints under Section 138 could be maintained at a place other
than the place where the drawee bank is situate. Answering the question in
the negative this Court held that an offence under Section 138 is committed
no sooner the cheque issued on an account maintained by the drawer with a
bank and representing discharge of a debt or a liability in full or part is
dishonoured on the ground of insufficiency of funds or on the ground that
the same exceeds the arrangements made with the banker. Prosecution of the
offender and cognizance of the commission of the offence is, however,
deferred by the proviso to Section 138 till such time the complainant has
the cause of action to institute such proceedings. This Court found that
the proviso to Section 138 does not constitute ingredients of the offence
punishable under Section 138. The legal position on the subject was summed
up in the following words:
“To sum up:
(i) An offence under Section 138 of the Negotiable Instruments Act, 1881
is committed no sooner a cheque drawn by the accused on an account being
maintained by him in a bank for discharge of debt/liability is returned
unpaid for insufficiency of funds or for the reason that the amount exceeds
the arrangement made with the bank.
(ii) Cognizance of any such offence is however forbidden under Section 142
of the Act except upon a complaint in writing made by the payee or holder
of the cheque in due course within a period of one month from the date the
cause of action accrues to such payee or holder under clause (c) of proviso
to Section 138.
(iii) The cause of action to file a complaint accrues to a
complainant/payee/holder of a cheque in due course if
(a) the dishonoured cheque is presented to the drawee bank within a
period of six months from the date of its issue.
(b) If the complainant has demanded payment of cheque amount within thirty
days of receipt of information by him from the bank regarding the dishonour
of the cheque and
(c) If the drawer has failed to pay the cheque amount within fifteen days
of receipt of such notice.
(iv) The facts constituting cause of action do not constitute the
ingredients of the offence under Section 138 of the Act.
(v) The proviso to Section 138 simply postpones/defers institution of
criminal proceedings and taking of cognizance by the Court till such time
cause of action in terms of clause (c) of proviso accrues to the
complainant.
(vi) Once the cause of action accrues to the complainant, the jurisdiction
of the Court to try the case will be determined by reference to the place
where the cheque is dishonoured.
(vii) The general rule stipulated under Section 177 of Cr.P.C applies to
cases under Section 138 of the Negotiable Instruments Act. Prosecution in
such cases can, therefore, be launched against the drawer of the cheque
only before the Court within whose jurisdiction the dishonour takes place
except in situations where the offence of dishonour of the cheque
punishable under Section 138 is committed along with other offences in a
single transaction within the meaning of Section 220(1) read with Section
184 of the Code of Criminal Procedure or is covered by the provisions of
Section 182(1) read with Sections 184 and 220 thereof.”
6. In the light of the above pronouncement of this Court we have no
hesitation in holding that the issue of a notice from Delhi or deposit of
the cheque in a Delhi bank by the payee or receipt of the notice by the
accused demanding payment in Delhi would not confer jurisdiction upon the
Courts in Delhi. What is important is whether the drawee bank who
dishonoured the cheque is situate within the jurisdiction of the Court
taking cognizance. In that view, we see no reason to interfere with the
order passed by the High Court which simply requires the Magistrate to
examine and return the complaints if they do not have the jurisdiction to
entertain the same in the light of the legal position as stated in Harman’s
case (supra). All that we need to add is that while examining the question
of jurisdiction the Metropolitan Magistrates concerned to whom the High
Court has issued directions shall also keep in view the decision of this
Court in Dashrath’s case (supra).
7. With the above observations these appeals fail and are hereby
dismissed but in the circumstances without any orders as to costs.
………………………………….…..…J.
(T.S. THAKUR)
.……………………………….…..…J.
(V. GOPALA GOWDA)
………………………..……………..J.
(C. NAGAPPAN)
New Delhi
September 4, 2014
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1911 OF 2014
(Arising out of S.L.P. (Crl.) No.5644 of 2010)
Times Business Solution Limited …Appellant
Versus
Databyte …Respondent
With
CRIMINAL APPEAL NO. 1912 OF 2014
(Arising out of S.L.P. (Crl.) No.5645 of 2010)
With
CRIMINAL APPEAL NO. 1913 OF 2014
(Arising out of S.L.P. (Crl.) No.5280 of 2010)
J U D G M E N T
T.S. THAKUR, J.
1. Leave granted.
2. These three appeals arise out of an order dated 1st February, 2010
passed by the High Court of Bombay whereby Criminal M.C. Nos. 281 of 2010,
282 of 2010 and 296 of 2010 filed by the appellants have been dismissed and
the orders passed by the Metropolitan Magistrate returning the complaints
filed by the appellants under Section 138 of the Negotiable Instrument Act,
1881 for presentation before the competent Court upheld.
3. It is common ground that the cheques in all the three cases had been
issued on different branches namely, Bank of India, Ruby Park and ICICI
Bank, Kolkata and Punjab National Bank, Chapraula, Gautam Budh Nagar, U.P.
which are outside Delhi. Complaints under Section 138 of the NI Act were
all the same filed in Delhi because the cheques had been deposited by the
complainants in their Delhi bank accounts for collection and because notice
of dishonour was issued to the accused persons from Delhi. Relying upon
the decision of this Court in Ishar Alloy Steels Ltd. v. Jayaswals Neco
Ltd. (2001) 3 SCC 609 the High Court held that mere presentation of cheques
before banks in Delhi when the drawee bank is situated outside Delhi will
not confer jurisdiction upon the Delhi courts nor will the issue of a
notice of dishonour from Delhi would do so. That view, in our opinion, is
unexceptionable having regard to the decision of this Court in Dashrath
Rupsingh Rathod v. State of Maharashtra and Another (2014) 9 SCALE 97. This
Court has in that case examined at length the principles underlying Section
138 and held that a unilateral act of presentation of the cheque anywhere
in the country or issue of a notice of dishonour from a place chosen by the
complainant does not by itself confer jurisdiction upon the Court from
within whose jurisdiction such presentation is made or notice issued.
Following the view taken by this Court in Dashrath’s case (supra) we have
no hesitation in holding that the High Court was justified in refusing to
interfere with the orders passed by the Metropolitan Magistrate. These
appeals accordingly fail and are hereby dismissed but in the circumstances
without any no orders as to costs.
………………………………….…..…J.
(T.S. THAKUR)
.……………………………….…..…J.
(V. GOPALA GOWDA)
………………………..……………..J.
(C. NAGAPPAN)
New Delhi
September 4, 2014
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1914 OF 2014
(Arising out of S.L.P. (Crl.) No.690 of 2011)
M/s K K. Ploycolor India Ltd. & Ors. …Appellants
Versus
Global Trade Finance Ltd. & Anr. …Respondents
With
CRIMINAL APPEAL NO. 1915 OF 2014
(Arising out of S.L.P. (Crl.) No.718 of 2011)
With
CRIMINAL APPEAL NO. 1916 OF 2014
(Arising out of S.L.P. (Crl.) No.749 of 2011)
J U D G M E N T
T.S. THAKUR, J.
1. Leave granted.
2. These appeals arise out of an order dated 15th September, 2010 passed
by the High Court of Judicature at Bombay whereby Crl. Application
Nos.1491, 2759 and 2760 of 2010 have been allowed and the orders passed by
the Magistrate set aside and the matter remitted back to the Magistrate
with the direction that the criminal complaints filed by the complainants-
respondents herein shall be disposed of expeditiously.
3. Complaints under Section 138 of the Negotiable Instrument Act, 1880
appear to have been filed by the respondent-company in the Court of
Metropolitan Magistrate, Bandra which were entertained by the Magistrate
and process issued against the accused persons. Revision applications were
then filed before the Court of Sessions at Bombay challenging the
jurisdiction of the Magistrate to entertain the complaints. The Revisional
Court relying upon Harman Electronics Private Limited and Anr. v. National
Panasonic India Private Limited (2009) 1 SCC 720 held that the Magistrate
did not have the jurisdiction to entertain the complaints. The orders
passed by the Magistrate were set aside and the complaints directed to be
returned for presentation before the competent Court. Aggrieved by the said
orders the complainant preferred Criminal Applications No.1491, 2759 and
2760 of 2010 before the High Court who relying upon the decision of this
Court in K. Bhaskaran v. Sankaran Vaidhyan Balan (1999) 7 SCC 510 and three
other decisions of the Bombay High Court held that the Magistrate had the
jurisdiction to entertain the complaint as the cheque had been presented
before a bank at Bombay which fact was, according to the High Court,
sufficient to confer jurisdiction upon the Magistrate to entertain the
complaints and try the cases. The orders passed by the Revisional Court
were accordingly set aside and the Magistrate directed to proceed with the
trial of the cases expeditiously as already noticed. The present special
leave petitions have been filed by the accused persons assailing the view
taken by the High Court.
4. A plain reading of the orders passed by the High Court would show
that the judgment proceeds entirely on the authority of the decision of
this Court in K. Bhaskaran’s case (supra). That decision has been reversed
by this Court in Dashrath Rupsingh Rathod v. State of Maharashtra and Anr.
(2014) 9 SCALE 97. This Court has, on an elaborate consideration of the
provision of Section 138 and the law on the subject, held that presentation
of a cheque for collection on the drawee bank or issue of a notice from a
place of the choice of the complainant would not by themselves confer
jurisdiction upon the Courts where cheque is presented for collection or
the default notice issued demanding payment from the drawer of the cheque.
Following the said decision we have no hesitation in holding that the High
Court was wrong in interfering with the order passed by the Sessions Judge.
5. We accordingly allow these appeals and set aside the order passed by
the High Court and restore those passed by the Revisional Court. The
parties are, however, left to bear their own costs.
………………………………….…..…J.
(T.S. THAKUR)
.……………………………….…..…J.
(V. GOPALA GOWDA)
………………………..……………..J.
(C. NAGAPPAN)
New Delhi
September 4, 2014
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1917 OF 2014
(Arising out of S.L.P. (Crl.) No.7619 of 2011)
Suku …Appellant
Versus
Jagdish and Anr. …Respondents
With
CRIMINAL APPEAL NO. 1918 OF 2014
(Arising out of S.L.P. (Crl.) No.7772 of 2011)
J U D G M E N T
T.S. THAKUR, J.
1. Leave granted.
2. These appeals arise out of an order dated 15th June, 2011 passed by
the High Court of Kerala at Ernakulam whereby the High Court has held that
the presentation of a cheque by the complainant in a bank at Krishnapuram,
Kayamkulam, Kerala did not confer jurisdiction upon Courts at Kayamkulam to
entertain a complaint under Section 138 of the Negotiable Instruments Act
and try the accused persons for the offence.
3. It is not in dispute that the cheque in question was issued by the
respondent on Syndicate Bank, Gokaran branch in Karnataka which was
presented for collection by the complainant at Krishnapuram, Kayamkulam,
Kerala but dishonoured for insufficiency of funds. The complainant then
filed complaint at Kayamkulam in the State of Kerala which were returned by
the Magistrate to be filed before the proper Court as the Court at
Kayamkulam, Kerala, had no territorial jurisdiction to entertain the same.
The matter was taken up before the High Court by the complainants in Crl.
M.C. Nos.514 of 2011 and 1653 of 2011 which the High Court has dismissed by
the impugned order holding that the presentation of the cheque to a Bank in
Kerala would not by itself confer jurisdiction upon the Kerala Court. The
High Court has in support of that view relied upon the decision of this
Court in Harman Electronics Private Limited and Anr. v. National Panasonic
India Private Limited (2009) 1 SCC 720 where this Court held that the
issue of notice to the drawer of the cheque does not by itself give rise to
a cause of action to confer jurisdiction upon the Court to take cognizance.
4. The view taken by the Magistrate based as it is on the decision of
this Court in Harman’s case (supra) does not, in our opinion, call for any
interference by this Court, in the light of the pronouncement of this Court
in Dashrath Rupsingh Rathod v. State of Maharashtra and Another (2014) 9
SCALE 97 where this Court has examined the issue at some length and held
that presentation of a cheque by the complainant at a place of his choice
or issue of notice by him to the accused demanding payment of the cheque
amount are not sufficient by themselves to confer jurisdiction upon the
courts where such cheque was presented or notice issued. Following the
decision in Dashrath Rupsingh Rathod’s case (supra), we affirm the order
passed by the High Court.
5. These appeals accordingly fail and are, hereby, dismissed but in the
circumstances without any orders as to costs.
………………………………….…..…J.
(T.S. THAKUR)
.……………………………….…..…J.
(V. GOPALA GOWDA)
………………………..……………..J.
(C. NAGAPPAN)
New Delhi
September 4, 2014
REPPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL ORIGINAL JURISDICTION
TRANSFER PETITION (CRL.)NO. 338 OF 2010
T.A.M.A. Jawahar …Appellant
Versus
Arun Kumar Gupta …Respondent
AND
TRANSFERRED CASE (CRL.) NO.4 OF 2012
J U D G M E N T
T.S. THAKUR, J.
Transfer Petition (Crl.) No.338 of 2010 and Transferred Case (Crl.) No.4 of
2012 are delinked and to be posted for hearing separately.
………………………………….…..…J.
(T.S. THAKUR)
.……………………………….…..…J.
(V. GOPALA GOWDA)
………………………..……………..J.
(C. NAGAPPAN)
New Delhi
September 4, 2014
