As far as convenience of the parties and conduct of the
accused is concerned, it is seen from the records that the accused,
after receiving the summons from the Ponda Court, appeared and
furnished the required bond with surety and even participated in the
proceedings by pleading not guilty to the substance of accusation
explained to him and in the part of the trial completed. The evidence
of the complainant has been closed. The learned Advocate for the
accused has cross-examined the power of attorney holder of the
complainant. He has given his statement under section 313 of the Cr.
P. C. He has furnished the copy of his affidavit-in-evidence to the
learned Advocate for the complainant. All the above has been done
without raising any objection about the territorial jurisdiction of the
trial Magistrate. Only when the case was pending for cross examination of the accused, he filed the application challenging the
territorial Jurisdiction of the trial Magistrate. Sections 177 to 188 of Cr.
P. C. contain the provisions regarding the place of trial. However,
section 462 of Cr. P. C. says that no proceedings in a wrong place shall
be set aside unless it appears that such error has occasioned a failure
of justice. Thus, without prejudice to what has been held above, the
trial,even it is was held to be within a wrong territorial jurisdiction
would not vitiate the same unless such error, if any, occasioned
failure of justice.
IN THE HIGH COURT OF BOMBAY AT GOA
CRIMINAL APPEAL NO. 77 OF 2009
Crompton Greaves Limited,
Versus
1) Shri Kantibhai, Prop. Mahavir
S.
CORAM : U. V. BAKRE, J.
PRONOUNCED ON : 20th APRIL,2012.
citation 2013(1)crimes 300 bombay
This is complainants' appeal from Order dated 9th April, 2
2009 passed by the learned Judicial Magistrate First Class, Ponda (trial
Magistrate, for short) in Criminal Case No.582/OA/2006/C holding that
he has no territorial jurisdiction to entertain the said complaint.
2. The said complaint is in respect of the offence punishable
under Section 138 of the Negotiable Instruments Act, 1881 ( the Act,
for short).
3. The complainant is a company registered under the
Companies Act, 1956 and having its registered office at Worli, Mumbai
and various divisions including Fan and Electrical Division at
Bethoda, Ponda Goa. The accused was the authorized dealer of the
complainant for various ranges of electrical items. The accused had
from time to time placed orders with the complainant and the
complainant had sold, supplied and delivered to the accused various
electrical items. According to the complainant, the accused had
accepted the delivery of the same without raising any dispute as to its
quality and/or quantity thereof and the complainant thereafter had
raised, issued and delivered to the accused their invoices, which
were accepted by the accused, and the complainant was assured that
the amount thereunder will be paid very shortly. The complainant has
alleged that after a number of requests and reminders being made by3
the complainant, the accused effected various part payments from
time to time and towards the balance payment, the accused issued in
favour of the complainant a cheque No. 318590 duly signed and
filled in, except the amount in figures and words and the date, as the
accused was not aware of the exact amount due and payable by him
to the complainant on the day when he issued the said cheque. The
complainant has further stated in the complaint that the accused
requested the sales representative of the complainant to fill the
amount after adjusting various credit notes etc. and had assured that
the said cheque will be honoured on its presentation. The said
cheque was drawn on C. K. P. Co-Operative Bank Ltd., Thane. It is
submitted by the complainant that later on the amount of Rs.
1,05,892.82 paise was found legally due and payable by the accused
to the complainant and therefore the blanks in the said cheque were
filled in. The cheque was presented by the complainant to their
bankers namely ICICI Bank Ltd., Ponda Branch for realization. The
said cheque was returned unpaid on 20/07/2006. A legal notice was
therefore sent from Ponda by the complainant which is dated
26/07/2006 and the same was received by the accused at Thane on
03/08/2006. The accused failed to make the payment of the cheque
amount which was demanded and replied the said notice by letter
dated 09/08/2006. Therefore, the complainant lodged the complaint
on 04/09/2006 in the Court of Judicial Magistrate First Class at Ponda,
Goa, under section 138 of the Act.4
4. Process was issued by the trial Magistrate against the
accused, who pleaded not guilty to the substance of accusation that
was explained to him. The complainant adduced its evidence and
tendered the affidavit-in-evidence of its power of attorney holder. He
was cross-examined. He has produced various documents on record.
The statement of the accused came to be recorded under section 313
of the Code of Criminal Procedure. When the case was pending for
defence evidence, the accused filed an application dated 20/03/2009
thereby challenging the territorial jurisdiction of the trial Magistrate.
5. The contention of the accused was that the the cheque in
question was drawn on C. K. P. Co-Operative Bank Ltd., Gokhale Road,
Thane and was handed over to the complainant at its office at Worli
and the payment against the said cheque was stopped at Thane and
therefore the Trial Magistrate had no jurisdiction to entertain the
complaint. The accused prayed that the complaint be returned to the
complainant for presentation to the proper Court. He placed reliance
on the Judgment of the Aurangabad Bench of this Court in Criminal W.
P. No. 497 of 2008 and Criminal Revision Application Nos. 250 and 251
of 2007 (Dipti Kumar Monhanty v/s. Videocon Industries Ltd.
and Kitchen Appliances (India) Ltd. v/s. Mrs. Manisha
Choudhary).5
6. The learned trial Magistrate, after hearing the parties on
the said application, held that the transaction pertaining to the said
cheque took place out side the jurisdiction of his Court. He held that
he has no territorial jurisdiction to entertain the complaint. The trial
Magistrate further held that under the Code of Criminal Procedure, he
has no powers to direct transfer of cases from one Court to another.
He therefore dismissed the same.
8. Mr. S. D. Lotlikar, learned Senior Counsel on behalf of the
complainant, at the outset, urged that the point of territorial
jurisdiction could not have been decided by the trial Magistrate
independently. He pointed out that the evidence on behalf of the
complainant was recorded; the statement of accused under Section
313 of Cr. P. C. was recorded; the copy of the affidavit-in-evidence of
the accused was furnished to the counsel for the complainant and the
matter was fixed for cross-examination of the accused. Therefore,
according to the counsel, the trial Magistrate had to look into the
evidence and decide the case on merits. The learned Senior counsel
submitted that the accused, after receiving summons had not raised
the question of jurisdiction and after completion of evidence, he could
not have raised the said point. Without prejudice to his contention, as
above, he then submitted that the learned trial Magistrate could not
have dismissed the case and had to return the complaint to the
complainant in order to file it before the Court having jurisdiction. He6
pointed out that a cross cheque was issued to the complainant and
this cheque was presented for encashment in the Bank of the
complainant at Ponda and it was dishonoured at Ponda. He
contended that the offence arises because the account of the
complainant has not been credited. The learned senior counsel
submitted that the complainant would have got the money at the
place where the cheque was presented and the interest of the
complainant was in fact that its account is credited with the cheque
amount. According to Shri Lotlikar, learned Senior Counsel, the fact
that the banker of the complainant demands the cheque amount from
the drawee bank which is at Thane, has nothing to do with the
complainant. He also pointed out that the legal notice dated
26/07/2006 was issued from Ponda. He further argued that the goods
were supplied to the accused from Bethoda, Ponda; the invoices have
been raised from Ponda; the cheque has been presented and
dishonoured at Ponda and the legal notice has been issued from
Ponda. He contended that the dishonour of the cheque may not give
the complainant the cause of action but the intimation given to him
by the ICICI Bank, Ponda about the dishonour, gives him the cause of
action. The learned Senior Counsel has relied upon “Preetha S.
Babu of District Ernakulam versus Voltas Limited and
another” [ 2010(1) Bom C.R. (Cri.) 744], in support of his contention
that since the cheque was presented and dishonoured at Ponda, the
complaint could have been filed there. He relied upon “Shamshad7
Begum(Smt) Vs. B. Mohammed” [2000(5) Bom.C.R. 178(S.C.)] and
argued that since the legal notice dated 26/7/2006 was sent from
Ponda, the Ponda Court has jurisdiction.
9. Per contra, Shri A. D. Bhobe, learned counsel for the
accused, argued that the case of “Preetha S. Babu” (supra) was a
Writ Petition filed under Articles 226 and 227 of the Constitution. He
further argued that the learned Single Judge dealing with the present
Criminal Appeal had made a reference regarding conflicting views and
the Division Bench by Judgment dated 29/08/2011 has decided the
said reference and the view of the Division Bench of this Court in the
case of “Preetha S. Babu” (supra), that the collecting bank has
jurisdiction, has not been accepted by the Division (Reference) Bench.
He further contended that the place of sending of notice does not give
Jurisdiction, but the place of receipt of the notice is relevant.
According to the learned counsel, the facts of this case are exactly
similar to the case of “Diptikumar Mohanti Vs. Videocon Industries
Ltd.” relied upon by the trial Magistrate. He therefore urged that the
impugned order insofar as it holds that the Ponda Court has no
territorial Jurisdiction is proper. He fairly agreed that the complaint
could not have been dismissed on that ground but the same should
have been returned to the complainant for filing the same in Court
having jurisdiction. Shri A. D. Bhobe, learned counsel, has relied upon
various cases namely: 8
1. K. Bhaskaran V/s. Sankaran Vaidhyan Balan
(AIR 1999 SC 3762)
2. Lok Housing and Constructions Ltd. V/s. Raghupati
Leasing and Finance Ltd. and another
[2002 (4) ALL MR (Journal) 22]
3. Vuppala Venkata Nageshvar Roa V/s. Tulluri Chit
Funds Pvt. Ltd. and anr. [2005 All MR (Cri) 65]
4. Laxmi Travels V/s. G. E. Countrywide Consumer
[2006 All MR (Cri) 2482]
5. Ahuja Nandkishore Dongre V/s. State of Maharashtra
and anr. [ 2006 (6) AIR Bom. R 201]
6. Nutan Damodar Prabhu and anr. V/s. Ravindra
Vassant Kenkre and anr.
[ Cri. W. P. No. 34/07]
7. Damodar S. Prabhu V/s. Balkrishna R. Naik
[Cri. W. P. No. 7/08]
8. M/s. Harman Electronics (P) Ltd. V/s. M/s. National
Panasonic India Ltd. [ 2009(1) All MR 479]
9. Dipti Kumar Mohanty V/s. Videocon Industries Ltd.
[Cri. W. P. No. 497/08]
10. Shah and Modi Developers V/s. State of Maharashtra
[2009 All MR (Cri) 3038]
11. Crompton Greaves Ltd. V/s. Shivam Traders
[Cri. Rev. Appl. 7/09]9
12. Kusum Ingots and Alloys Ltd. V/s. Pennar Peterson
Securities Ltd. [AIR 2000 SC 954]
13. Shri Ishar Alloys Steels Ltd. V/s. Jayaswals NECO Ltd.
[ AIR 2001 SC 1161]
11. I have perused the entire records and proceedings in the
light of the arguments advanced by the learned counsel and I have
also gone through all the judgments which have been cited by them.
12. In the case of “K. Bhaskaran”(supra), the Hon'ble Apex
Court has held thus:
“ The offence under Section 138 of the Act can be
completed only with the concatenation of a number of acts.
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. It is not necessary that all the
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 concatenation of all the
above five is a sine qua non for completion of the offence 10
under S. 138 of the Act. Referring to section 178(d) of Code
it is clear that if the five different acts were done in five
different localities any one of the Courts exercising
jurisdiction in one of the five different local areas can
become the place of trial for the offence under S. 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 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.”
13. The complainant has its registered office at Worli, Mumbai
and the accused has his shop at Thane (West). The complainant may
have its Fan and Electrical division at Bethoda, Ponda Goa, however,
the complainant has its divisions at various other places also. The
accused has his establishment only at Thane(West) and has nothing
at Goa. It is pertinent to note that the complainant has its Depot at
Thane, Bhiwandi. The submission of the learned senior counsel for the
complainant that the goods were supplied to the accused from Ponda
and the invoices were also raised from Ponda does not appear to be
true. Neither in the complaint nor in the affidavit-in-evidence of the
power of attorney holder, the complainant has stated that the goods11
were supplied from Ponda or the invoices were raised at Ponda.
Admittedly, as stated by the attorney of the complainant, in his crossexamination, the cheque was issued and delivered to the complainant
at Mumbai. Admittedly, as stated by the said attorney, the
complainant has bank account at Mumbai. The invoices-cum-challans
at Exhibit 33-colly show that they are issued from Mumbai branch.
The letter dated 14/06/2006 ( Exhibit 37-colly) demanding
Rs.1,06,000/- from the accused has been sent by the complainant,
from Mumbai, to the accused at Thane(west), as is evident from the
said letter and the postal receipt, which has the address of Bhandup
West Post Office. The learned trial Magistrate has observed in the
impugned order that in the present case, there was no delivery of
goods and/or any part of transaction between the two parties, which
has taken place within the jurisdiction of his Court. The trial
Magistrate has therefore held that only because the complainant has
a branch in Goa, it does not become a good ground to drag the
accused to Goa.
14. When this appeal came for final hearing before the learned
Single Judge of this Court ( U. D. Salvi, J), he found that there was
conflict in view taken by him in the case of “Crompton Greaves Ltd.
V/s. Shivam Traders and others” ( Criminal Revision Application
no. 7 of 2009 decided on 17/11/2009) and view taken up by V. R.
Kingaonkar,J sitting at Aurangabad Bench, in the case of “Dipti12
Kumar Mohanty v/s. Videocon Industries Ltd.” ( Criminal Writ
Petition No. 497 of 2008) decided on 17/02/2009 on the material issue
as to whether the Court in whose jurisdiction the payee or holder in
due course of cheque ordinarily resides or carries on business or
works for gain or for that matter has a branch office shall have
jurisdiction to enquire into or try the offence under Section 138 of the
Act or nor. The matter was therefore referred to the Hon'ble the Chief
Justice for appropriate directions. The Hon'ble the Chief Justice
constituted the Division Bench for deciding the issue raised by the
Court (Coram: U. D. Salvi, J.). By judgment dated 29/08/2011, the
Division Bench of this Court answered the said reference and ordered
that the matter be placed before the Single Judge for decision in
accordance with law. It has been held as follows:
“14. In our view, the decision of the learned
Single Judge (U. D. Salvi, J ) in Crompton Greaves
Ltd. V/s M/s Shivan Traders ( supra ) in so far as it
holds “ that item no.5 in para 14 of K. Bhaskaran's
case would enable the payee or the holder of the
cheque to prosecute the drawer at any of the places,
where he either resides or carries on business or works
for gain” does not lay down the correct law and
stands overruled. The place where a civil suit can be
filed for recovery of money (due on cheque) in view of
Section 20 of the CPC, is not relevant for determining13
jurisdiction of the magistrate to entertain a
complaint for an offence under Section 138 of the
Negotiable Instruments Act. The jurisdiction of the
magistrate would necessarily depend only upon
Section 178 of the Cr. P. C. If the place where one of
the several acts which together constitute an
offence also happens to be a place where the cause
of action for filing of a suit has arisen or where the
accused resides that may be pure coincidence and in
which case both the civil suit as well as the prosecution
can be lodged before the civil court and the
magistrate having jurisdiction at that place. In a given
case the civil court may have jurisdiction to entertain
and try the suit for recovery of money due on negotiable
instrument based upon the place of residence of the
defendant or place of accrual of cause of action but that
would not be relevant for the purpose of determining
of the jurisdiction of the magistrate to try the accused
for an offence under Section 138 of Negotiable
Instruments Act.”
15. I therefore hold that merely because the complainant has
fan and electrical division at Bethoda, Ponda, where nothing has
happened concerning the accused, Ponda Court would not have14
territorial jurisdiction on this ground.
16. Indisputably, the signed cheque was issued by the accused
and delivered to the complainant at Worli, Mumbai and hence it was
drawn at Mumbai. Thus, the act of drawing of the cheque also does
not give jurisdiction to the Ponda Court.
17. It is true that legal notice dated 26/07/2006 has been sent by
the learned Advocate for complainant to the accused from Ponda
address. However, that cannot mean that it was given to the accused
at Ponda. The said notice has been sent to Thane (West) at the
address of the accused and has been received by the accused at the
said Thane address and further the accused had sent reply to the
said notice through his Advocate from Thane. In the case of “M/s.
Harman Electronics (P) Ltd.”(supra), [2009 (1) All MR 479], the
Hon'ble Supreme has Court held as follows :
"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 ingredients thereof
are required to be proved. What would constitute an
offence is stated in the main provision. The proviso15
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."
18. Since the notice in the present case was received by the
accused at Thane, in view of the above judgment of the Hon'ble
Supreme Court, the Ponda Court cannot be said to have jurisdiction on
the ground that the said notice was sent from Ponda.
19. The main question which arises for consideration, in the
present case, is whether the cheque was presented and dishonoured
at Ponda and whether this gives the jurisdiction to the trial Magistrate
to try the offence.
20 Admittedly, the said cheque was presented for encashment16
by the complainant to its banker namely ICICI Bank Ltd., Ponda,
Branch. The said cheque is a cross cheque. However, it is not drawn
on ICICI Bank Ltd., Ponda branch but on the C.K.P. Co-Operative Bank
Ltd., Thane (West). The said cheque could have been presented for
encashment to any bank anywhere in India wherever the complainant
has its account. But the payment or the non payment of cheque or
the reason for non payment can occur only at one bank that is C.K.P.
Co-Operative Bank Ltd. Therefore, the ICICI Bank Ltd. had to send the
said cheque to the C.K.P. Co-Operative Bank Ltd. Thane, for clearance.
It is the said C.K.P. Co-Operative Bank which has issued the cheque
return memo on the ground that payment is stopped by the drawer.
Once the drawer's Bank, on which the cheque is drawn, refuses
payment, the Bank at which the cheque has been presented also
cannot credit the account of the drawee (holder of the cheque).
Therefore, the ICICi Bank, Ponda, by intimation dated 20/7/06 (Exhibit
36-colly), has informed the complainant that the cheque has been
returned unpaid for reason No. 28 i. e. “ Payment stopped by drawer”.
Hence, presentation as well as dishonour of the cheque, in the
present case, has taken place at Ponda.
21. In the case of “Vuppala Venkata Nageshwara
Rao”(supra), the learned Single Judge of the Andhra Pradesh High
Court has held that in 'K. Bhaskaran”, the Apex Court has held that
the Courts in whose jurisdiction the dishonoured cheque was17
presented for payment or the place where the cheque was returned
unpaid by the drawee bank etc., would have jurisdiction to entertain
the complaint under section 138 of the Act.
22. In the case of “Preetha S. Babu” (supra), the complainant's
registered office was at Mumbai. The cheque was drawn on Syndicate
Bank, Angamaly Branch, Ernakulum District, Kerala. The complainant
had presented the same for clearing, with their Bankers – Citibank, D.
N. Road, Fort, Mumbai. The said cheque was returned unpaid and
dishonoured by the banker of the accused i. e. Syndicate Bank. The
statutory notice was issued from Mumbai. Referring to almost all the
judgments cited by both the parties, It has been held by the Division
Bench of our High Court as follows :
“Therefore, the cheque can be presented at the
collecting bank of the payee. The collecting bank has
to then send it to the drawee bank. That must be
done within six months. If the cheque is dishonoured
and money is not paid within 15 days of the notice,
complaint can be filed at the place where the
collecting bank is situated. The idea is that the
cheque should reach the drawee bank within six
months. It can be directly presented to it or it can be
presented through the collecting bank.”
21. The Division Bench of our High Court, in the reference
made by the Single Judge, in the present appeal, has held as follows :18
“ Place No. 2 : Presentation of the cheque to the bank.
4. The determination of the place of presentation of
the cheque poses some difficulty, especially when
the cheque is drawn on a bank and the
branch where the accused ( drawer of the
cheque ) maintains his account is situate in a city or
town different than the city or town where the payee
(holder ) maintains his bank account and deposits the
cheque in his ( holder's ) bank for collection. The
question that arises is whether the presentation of
the cheque takes place in the city or town where
the holder deposits the cheque for collection in
his bank or the presentment takes place where the
cheque is presented to the drawee bank at its branch
on which it is drawn and where the drawer maintains
his account. The controversy is whether the cheque
is presented where the concerned branch of the
drawee bank is situate or where the concerned
branch of the collecting branch is situate.
5. In Shri Ishar Alloys Steel Limited V/s
Jayaswals NECO Ltd., AIR 2001 SC 1161, the
Supreme Court was required to consider inter
alia the time period within which a cheque
was required to be presented to the bank for
computing the period of validity of the cheque of six
months. In para 9 of the decision, the
Supreme Court observed :
“ A combined reading of Sections 2,
72 and 138 of the Act would leave no doubt
in our mind that the law mandates19
the cheque to be presented at the
bank on which it is drawn if the
drawer is to be held criminally liable.
Such presentation is necessarily to be
made within six months at the bank on
which the cheque is drawn, whether
presented personally or through another
bank, namely, the collecting bank of
the payee”. ( Under lining supplied )
This observation gives a clear indication that
the cheque must be presented for payment to the
bank on which it is drawn. Such presentment
would therefore, save and except where the
cheque is payable at par at all or multiple branches
of the bank on which the cheque is drawn,
is effected at the branch in which the drawer
of the cheque maintains his account. In this
regard, further observations made by the Supreme
Court in para 8 in the case of Shri Ishar Alloys Steel
Limited V/s Jayaswals NECO Ltd., (supra )
also needs to be quoted, they are :
“8. The use of the words “a bank” and “the
bank” in the section is indicator of
the intention of the Legislature. The
former is indirect article and the latter is
pre-fixed by direct article. If the
Legislature intended to have the same
meanings for “a bank” and “the bank”,
there was no cause or occasion for
mentioning it distinctly and differently by20
using two different articles. It is worth
noticing that the word “ banker” in section
3 of the Act is pre-fixed by the
indefinite article “a” and the word “bank”
where the cheque is intended to be
presented under section 138 is prefixed
by the definite article “the”. The same
section permits a person to issue a
cheque on an account maintained by
him with “a bank” and makes him
liable for criminal prosecution if it is
returned by “the bank” unpaid. The
payment of the cheque is contemplated by
“the bank” meaning thereby where
the person issuing the cheque has an
account. “The” is the word used before
nouns, with a specifying of
particularising effect opposed to the
indefinite or generalising force of “a”
or “an”. It determines what particular
thing is meant; that is, what
particular thing we are to assume to
be meant. “The” is always mentioned
to denote particular thing or a person.
“The” would, therefore, refer implicitly
to a specified bank and not any
bank. “The bank” referred to in
Clause (a) to the proviso to section
138 of the Act would mean the
drawee-bank on which the cheque is
drawn and not all banks where the
cheque is presented for collection21
including the bank of the payee, in whose
favour the cheque is issued.”
( Underlining supplied )
6. Despite the clear pronunciation of the law of the
Supreme Court that the expression “ the bank”
referred to in clause (a) to the proviso to
Section 138 of the Negotiable Instruments Act
would mean the drawee bank on which the cheque
is drawn and not all banks where the
cheque is presented for collection including the
bank of the holder, different Courts have
taken divergent views, some holding that the
presentment of the cheque is made only at
the drawee bank ( bank of the accused ) and others
taking the view that the presentment is made at
holder's bank i.e. the collecting bank where the
holder deposits the cheque.
In Mattathil Ouseph Ittira V/s State of Kerala
and anr., 2003 Cr. L.J. 514, the cheque in question
was drawn on M/s Abudabi Commerical Bank, Sharjah
and was presented to Tiruvale Branch of Indian
Overseas Bank. The cheque was dishonourned.
The Kerala High Court held that the fact that drawee
bank was outside India did not matter since
the cheque was presented for encashment within the
jurisdiction of the Court where the collecting
bank was situate, the complaint could be filed
before it. Dissenting from the view of the Kerala High
Court as also of the view taken by the Andra Pradesh
and Delhi High Court, a Single Judge of this22
Court ( R. C. Chavan, J ) in Ahuja Nandkumar Dongre
V/s State of Maharashtra, 2006(6) AIR Bom. R 201,
held that the cheque has to be presented to
the drawee bank at the place mentioned on
the cheque. The Court within whose jurisdiction the
cheque was merely presented for realization
( i.e. the place where the collecting bank was
situate ) would not have jurisdiction to entertain the
complaint. The deicision of R. C. Chavan J, in Ahuja
Nandkumar Dongre's case was followed by another
Single Judge of this Court ( Kingaonkar J ) in Dipti
Kumar Mohanty V/s Videocon Industries Ltd.
( MANU/MH/0120/2009). However in Shri Damodar S.
Prabhu V/s Balkrishna Naik ( Criminal W. P.
No.2/2008) another learned Single Judge of this
Court ( R. M. S. Khandeparkar J ) observed that the
view taken in Ahuja Dongre was contrary to the view
taken by the Supreme Court in K. Bhaskaran. He,
therefore referred the matter to a larger bench.
However, the reference did not materialize as
the dispute between the parties was settled. The
decision of the Single Judge in Ahuja Dongre's case
came up for consideration before a Division
Bench of this Court in Preetha S. Babu V/s Voltas
Ltd.,2009 (3) Mah. L. J. 234 in a petition filed under
Article 226 and 227 of the Constitution of India for
quashing and setting aside of a complaint pending
before the Metropolitan Magistrate. The decision of
the Division Bench in this regard is equivocal. The
first sentence of para 28 of the judgment in the
Preetha's case indicates that the Division Bench has
agreed with the view of the Single Judge in Ahuja23
Dongre's case that the expression “the bank”
referred to in clause (a) to proviso to Section 138 of
the Negotiable Instruments Act would mean
the drawee bank on which the cheque is
drawn. However, in the next sentence the
Division Bench has observed that the view
expressed by the learned Single Judge that
only the Court within whose jurisdiction the drawee
bank is situate will have the jurisdiction to entertain
the complaint and not the Court where it is presented
for realization needs to be reconsidered by a larger
bench in an appropriate case. Again in para 31, the
Division Bench has observed :
“If the cheque is dishonoured and
money is not paid within 15 days of the
notice, complaint can be filed at the
place where collecting bank is
situated”.
The view expressed in para 31 however
is not emphatic and it is clear from further
observations made in para 33 of the decision
which are to the following effect :
“We respectfully agree with learned
Single Judge when he states in
Ahuja Dongre that if the Courts at
the place where the cheque was
presented were to have jurisdiction,
drawer of the cheque would be
harassed by unscrupulous litigants by
presenting the cheque at a place far
away from the place at which it was24
meant to be paid. But we must refer to
the Supreme Court's observation in
Harman that in such cases, it is
necessary to strike a balance
between the right of the complainant
and the right of the accused vis-a-vis
the provisions of the Code. It is
possible to urge that whereas the
accused can take exemptions from
appearance in the Court, the
complainant runs the risk of his complaint
being dismissed in his absence and,
therefore, hardship caused to the
complainant is more. Therefore, though
we are not expressing a total voice
of dissent, in our opinion, learned Single
Judge's view that the words “the bank” in
item no.2 of paragraph 14 of K. Bhaskaran
mean the “drawee bank” needs to be
referred to a larger bench in an appropriate
case so that it can be more
advantageously heard and decided.
With respect, we feel that learned
Single Judge's view that practice of
presenting a cheque to the payee's or
holder's own banker does not make such
banker “the drawee” needs to be
considered by a larger bench in the
context of K. Bhaskaran. We have not
given necessary direction to the Registry
because for the disposal of this petition, the
decision on the said issue is not25
necessary”. ( Underlining supplied )
Since the Division Bench has held that
the question whether the Court having
jurisdiction over a place where “the bank”
(collecting bank ) is situate, is required to be referred
to a larger bench, it would not be appropriate for us
to express our view on the issue and the matter
would be finally decided by a larger bench when a
reference is made on an appropriate occasion.
22. The Division Bench of our High Court in the said
reference, in so far as the return of the cheque unpaid by the
drawee bank, has held as follows:
“Place No.3 – Returning the cheque unpaid by
the drawee bank.
8. Cheque may be presented by the holder
of the cheque to the drawee bank in person if the
cheque is payable to the bearer or order.
However, where the cheque is crossed, it would
be required to be presented by the holder to the
drawee bank only through a bank for being credited
to his account. Where the holder of the
cheque maintains an account in the same branch
of the bank on which the cheque is drawn the
drawee bank would credit the account of the
holder if there is available balance in the
account of the drawee. In case of insufficiency of
funds in the account of the drawer, the drawee bank26
would return it to the holder in that very branch and
that very place. This situation presents no difficulty
as the cheque is returned to the holder at
the branch on which the cheque is drawn.
However, when the holder of the cheque has
an account in a different bank, perhaps in a
different town, he would deposit the cheque in his
bank ( collecting bank). The collecting bank would
then present the cheque to the drawee bank
either by itself or through the network of its
branches. The cheque would be presented at the
branch of the drawee bank where the drawer of the
cheque maintains the account. If the
balance in drawee's account is adequate, the
drawee bank would pay the amount of the cheque
when the cheque is presented to it by the collecting
bank through clearing house or through any
other mechanism of payment recognised and
approved by the banking system. Where however
the balance in the account of the drawer is
inadequate, the drawee bank would return the
cheque unpaid to the collecting bank; the
cheque is returned and delivered to the collecting
bank there and then or through the clearing
house in the same town, in the ordinary
course. When the collecting bank presents
the cheque to the drawee bank, it acts an agent of
the holder of the cheque and not as an agent of the
drawer of the cheque. The return of the cheque by
the drawee bank to the collecting bank is thus a
return of the cheque to the agent of the holder of the
cheque. The cheque is returned unpaid at the27
branch of the drawee bank on which cheque
is drawn. It is, therefore, the Court which
has jurisdiction over the place where the
branch of the drawee bank on which cheque
is drawn is situate that would have jurisdiction to
inquire into and try the accused for an
offence under Section 138 of Negotiable
Instruments Act.”
23. The reference made to the Hon'ble Division Bench, in the
present appeal,was only on a limited point as to whether the Court in
whose jurisdiction the payee or holder in due course of cheque
ordinarily resides or carries on business or works for gain or for that
matter has a branch office shall have jurisdiction to enquire into or try
the offence under section 138 of the Act or not. It is seen that the
Division Bench, to which the reference was made in this appeal, has
not held that the complaint cannot be filed at the place of the
collecting bank. A perusal of the Judgment of the Hon'ble Division
Bench of our High Court in “Preetha S. Babu”(supra), reveals that
the Division Bench has agreed with the learned Single Judge's view in
the case of “Ahuja Nandkishore Dongre Vs. State of
Maharashtra”, [2007 (1) Bom. C.R. (Cri.) 1031], to the extent that
'the bank' referred to in Clause (a) to proviso to section 138 of the Act
would mean the drawee-bank on which the cheque was drawn. But
the Division Bench has observed that the view taken by the learned
Single Judge in that case in the context of jurisdiction of the Court to28
entertain complaint under section 138, that the cheque has to be
presented to the drawee-bank at the place mentioned in the cheque
and only the Court within whose jurisdiction, the drawee bank is
situated will have jurisdiction to entertain the complaint and not the
Court at another place where it is presented for realization needs to
be reconsidered by a larger bench in an appropriate case. The
Judgment of the Hon'ble Division bench in the case of “Preetha S.
Babu” (supra), is an authoritative pronouncement based on the
Judgment of the Hon'ble Supreme Court in the case of “K.
Bhaskaran”(supra). It is an accepted rule or principle that the
statement of law by a Bench is considered binding on a Bench of the
same or lesser number of Judges. The principle held in paragraph 31
of the Judgment in “Preetha's case is binding on this Court.
Therefore I hold that since the cheque was presented and returned
unpaid/dishonoured by ICICI Bank at Ponda, the Ponda Court has
jurisdiction to entertain and try the case.
24. As far as convenience of the parties and conduct of the
accused is concerned, it is seen from the records that the accused,
after receiving the summons from the Ponda Court, appeared and
furnished the required bond with surety and even participated in the
proceedings by pleading not guilty to the substance of accusation
explained to him and in the part of the trial completed. The evidence
of the complainant has been closed. The learned Advocate for the29
accused has cross-examined the power of attorney holder of the
complainant. He has given his statement under section 313 of the Cr.
P. C. He has furnished the copy of his affidavit-in-evidence to the
learned Advocate for the complainant. All the above has been done
without raising any objection about the territorial jurisdiction of the
trial Magistrate. Only when the case was pending for crossexamination of the accused, he filed the application challenging the
territorial Jurisdiction of the trial Magistrate. Sections 177 to 188 of Cr.
P. C. contain the provisions regarding the place of trial. However,
section 462 of Cr. P. C. says that no proceedings in a wrong place shall
be set aside unless it appears that such error has occasioned a failure
of justice. Thus, without prejudice to what has been held above, the
trial,even it is was held to be within a wrong territorial jurisdiction
would not vitiate the same unless such error, if any, occasioned
failure of justice.
25. The impugned Order, therefore is not in accordance with the
settled principles of law and hence the same is required to be
quashed and set aside.
26. In the result, I pass the following:
ORDER
(a) The appeal is allowed.
(b) The impugned order is quashed and set aside. 30
(c) The Criminal Case No. 582/OA/2006 is restored to
the file of the trial Magistrate.
(d) The trial Magistrate shall proceed with the said case
from the stage at which it was pending prior to the
filing of the application Exhibit 43 by the accused and
shall dispose of the same in accordance with the law.
(e) The disposal of the case shall be expedited.
(f) The parties shall appear before the trial Magistrate on
the 11th of June 2012 at 10.00 a.m.
U.V. BAKRE,J.
MV
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