The question of jurisdiction of criminal courts to hear complaints of bounced cheques was once again answered by the Supreme Court in the judgment, Indiabulls Financial Services Ltd vs Delhi High Court Legal Services Committee. The committee had moved a public interest litigation in the high court pointing out that a large number of complaints under Section 138 of the Negotiable Instruments Act were pending in the courts of metropolitan magistrates, though they had no territorial jurisdiction to take cognizance of them. They took cognisance only because the statutory notices to the drawers of the cheques were issued from Delhi. The high court ordered that all such complaints should be returned. This was done because of the huge number of complaints over bad cheques which flooded the criminal courts. The Supreme Court upheld the high court view, and pointed out the propositions made recently in the case, Dashrath vs State of Maharashtra.
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)
Dated;September 4, 2014
T.S. THAKUR, J.
1. Leave granted.
2. These appeals arise out of a judgment dated 23 rd
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
2
Page 2
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
3
Page 3
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
Page 4
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 3 rd 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.
5
Page 5
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
6
Page 6
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.”
7
Page 7
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.
8
Page 8
................................................J.
(T.S. THAKUR)
..............................................J.
(V. GOPALA GOWDA)
..............................................J.
(C. NAGAPPAN)
New Delhi
September 4, 2014
9
Page 9
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)
JUDGMENT
T.S. THAKUR, J.
1. Leave granted.
2. These three appeals arise out of an order dated 1 st
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
10
Page 10
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
11
Page 11
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
12
Page 12
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)
JUDGMENT
T.S. THAKUR, J.
1. Leave granted.
2. These appeals arise out of an order dated 15 th
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
13
Page 13
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
Magistrate,
Bandra
in
the
which
Court
were
of
Metropolitan
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
competent
be
Court.
returned
for
Aggrieved
presentation
by
the
said
before the
orders the
complainant preferred Criminal Applications No.1491, 2759
and 2760 of 2010 before the High Court who relying upon
14
Page 14
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
15
Page 15
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
16
Page 16
September 4, 2014
17
Page 17
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)
JUDGMENT
T.S. THAKUR, J.
1. Leave granted.
2. These appeals arise out of an order dated 15 th June,
2011 passed by the High Court of Kerala at Ernakulam
whereby the High Court has held that the presentation of a
18
Page 18
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
19
Page 19
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
jurisdiction
not
upon
sufficient
the
by
courts
presented or notice issued.
themselves
where
such
to
confer
cheque
was
Following the decision in
Dashrath Rupsingh Rathod’s case (supra), we affirm the
order passed by the High Court.
20
Page 20
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
Print Page
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)
Dated;September 4, 2014
T.S. THAKUR, J.
1. Leave granted.
2. These appeals arise out of a judgment dated 23 rd
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
2
Page 2
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
3
Page 3
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
Page 4
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 3 rd 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.
5
Page 5
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
6
Page 6
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.”
7
Page 7
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.
8
Page 8
................................................J.
(T.S. THAKUR)
..............................................J.
(V. GOPALA GOWDA)
..............................................J.
(C. NAGAPPAN)
New Delhi
September 4, 2014
9
Page 9
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)
JUDGMENT
T.S. THAKUR, J.
1. Leave granted.
2. These three appeals arise out of an order dated 1 st
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
10
Page 10
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
11
Page 11
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
12
Page 12
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)
JUDGMENT
T.S. THAKUR, J.
1. Leave granted.
2. These appeals arise out of an order dated 15 th
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
13
Page 13
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
Magistrate,
Bandra
in
the
which
Court
were
of
Metropolitan
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
competent
be
Court.
returned
for
Aggrieved
presentation
by
the
said
before the
orders the
complainant preferred Criminal Applications No.1491, 2759
and 2760 of 2010 before the High Court who relying upon
14
Page 14
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
15
Page 15
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
16
Page 16
September 4, 2014
17
Page 17
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)
JUDGMENT
T.S. THAKUR, J.
1. Leave granted.
2. These appeals arise out of an order dated 15 th June,
2011 passed by the High Court of Kerala at Ernakulam
whereby the High Court has held that the presentation of a
18
Page 18
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
19
Page 19
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
jurisdiction
not
upon
sufficient
the
by
courts
presented or notice issued.
themselves
where
such
to
confer
cheque
was
Following the decision in
Dashrath Rupsingh Rathod’s case (supra), we affirm the
order passed by the High Court.
20
Page 20
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
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