10 June 2014
Punjab-Haryana High Court
Shalini Enterprise & Anr vs Indiabulls Financial Services ... on 5 September, 2012
Crl.Misc. No. 35842 of 2011 1 IN THE HIGH COURT OF PUNJAB AND HARYANA
Crl.M. No. 35842 of 2011
Date of decision:5.9.2012
Shalini Enterprise & Anr. Petitioners vs.
Indiabulls Financial Services Ltd. Respondents CORAM: HON'BLE MR. JUSTICE JITENDRA CHAUHAN
Present: Mr. Akashdeep Singh, Advocate for the petitioners Mrs. Kiran Bala Jain, Advocate for the respondent ....
This petition under section 482 Cr.P.C has
been filed for quashing of complaint No. 5091 dated 11.10.2010/15.12.2010 titled as Indiabulls Financial Services Ltd. v. Shalini Enterprise & Anr. under section 138/142 of the Negotiable Instruments Act, (hereinafter referred to as the 'Act') Crl.Misc. No. 35842 of 2011 2 pending in the court of Judicial Magistrate Ist Class, Gurgaon, (Annexure P-4); summoning order dated 11.10.2010 (Annexure P- 5) and all the subsequent proceedings arising therefrom. The brief facts of the case, as set out in the complaint are that the petitioners availed loan of Rs. 20 lacs from the respondent-Company, engaged in the business of disbursement of various kinds of loans and promised to make regular EMI for the return of loan. The respondent-company is having its Corporate office at Indiabulls House, 448-451, Udyog Vihar, Phase-V, Gurgaon. In discharge of aforesaid loan liability, the petitioner issued cheque No. 854718 dated 27.7.2010 for a sum of Rs. 20 lacs drawn on Canara Bank, Sealdah, Kolkata in favour of the respondent-company. The petitioner assured that the cheque would be honoured on presentation. The respondent-company presented the cheque with its Banker ING Vysya Bank Ltd. Gurgaon for encashment. The said cheque was dishonoured and returned vide memo dated 10.8.2010 with the remarks "Insufficient Funds". The respondent-company issued legal demand notice to the petitioner. Despite the notice, the petitioners did not pay the cheque amount to the respondent-company, even after the statutory period of 15 days. Thus, a complaint (Annexure P4) under section 138 of the Act was filed against the petitioners in the court of Judicial Magistrate Ist Class, Gurgaon. The Judicial Magistrate, Ist Crl.Misc. No. 35842 of 2011 3 Class, Gurgaon vide order dated 11.10.2010 (Annexure P5) summoned Shalini Enterprise and Shalini Mehra (petitioners herein) to face trial under section 138 of the Act. Subsequently the present petition was filed for quashing the complaint (Annexure P4) and summoning order (Annexure P5). In the background of the factual matrix detailed herein before, the short issue that arises for consideration is whether the Court at Gurgaon is competent to try the Complaint u/s 138 of the Act.
It is not in dispute that the cheque was presented for encashment at Gurgaon. The plea of the petitioner is that the entire business transaction including the taking of the loan and deposit of security cheques took place in Kolkata and hence, the respondent can not create jurisdiction of the Gurgaon Court simply because depositing the cheque (for encashment) at a place, other than the place of its issuance. In support of his plea, the Ld. Counsel for the Petitioner principally relies on M/s Harman Electronics (P) Ltd. And another Vs. M/s National Panasonic India Limited 2009 (1) RCR (Criminal) 458. His additional plea is that the cheque which was presented for encashment was actually a security cheque and hence no liability would arise by dishonour of such a cheque.
Crl.Misc. No. 35842 of 2011 4 The Learned Counsel for the Respondent on the other hand contends that as per the decision of the Hon'ble Apex Court in K. Bhaskaran Vs. Sankaran Vaidhya Balan 1999 SCC (Criminal) 1284, a complaint u/s 138 Negotiable Instruments Act can be filed at any of the five places where the acts, which constitute the offence, are committed/ done. These five acts are: - drawing of the cheque
- - presentation of the cheque to the bank - returning of the cheque unpaid by the drawee bank - giving notice in writing to drawer of the cheque amount demanding payment of the cheque amount
- failure of the drawee to make payment within 15 days of the receipt of the notice.
Learned counsel for the respondent further
contends that in the present case, two of the above mentioned acts were done at Gurgaon i.e. Presentation of the cheque and issuance of notice to the drawer. Accordingly, the exercise of jurisdiction by the Court at Gurgaon is in accordance with the mandate of the Hon'ble Supreme Court's judgment in K. Bhaskaran's case (supra). In the considered opinion of this Court, the ratio of the judgment delivered by the Hon'ble Supreme Court in K. Bhaskaran's case (supra) is squarely applicable to the facts of the present petition. In the above referred judgment of the Hon'ble Crl.Misc. No. 35842 of 2011 5 Apex Court, it has been clearly laid down that jurisdiction of the Court to try cases arising under Section 138 of the Negotiable Instruments Act will vest in any of the places where any of the component acts i.e acts constituting the offence, are committed. It is relevant to highlight that the Hon'ble Apex Court referred to the provisions of the Criminal Procedure Code while arriving at the above mentioned finding i.e. Section 178 (d) of the Code of Criminal Procedure, which deals with the jurisdiction of the Court to try cases in which an offence consists of several acts done in different local areas. The Hon'ble Apex Court in K. Bhaskaran's case (supra) has held that the offence u/s 138 of the Negotiable Instruments Act is complete only when all the five ingredients (referred above) are present i.e the constituent acts have been committed. Hence, if the acts that constitute the offence are committed in different areas, over which different courts have appropriate jurisdiction, there is no reason to restrict the jurisdiction of such courts to only one court. In other words, offence u/s 138 of the Negotiable Instruments Act would fall in the procedural purview of Section 178 (d) of the Cr. P.C in case the acts constituting the offence are committed in courts of different territorial jurisdiction.
In order to make the aforesaid principle more comprehensible, let us take the help of an illustration. Supposing A Crl.Misc. No. 35842 of 2011 6 and B are two companies which enter into a commercial contract. Company A is to supply some goods to Company B for which B is to make a wired transfer from its account to that of A i.e. Electronic transfer of funds from one bank account to another. However, as a matter of caution, A also seeks a cheque from B as security for the price of goods supplied presuming that there might arise a situation where the wired transfer is not made or is stopped for certain reasons by B. Further particulars of this transaction are as follows - both Company A and Company B have their registered /head offices at different places i.e. A at Delhi and B at / Chennai; both A and B have branch offices at Mumbai where the contract is entered into and security cheque drawn as well as handed over to the authorized representatives of Company A. Official Bankers of both A and B are different. In due course, A supplies contracted goods to B but B defaults in authorizing a wired transfer (reasons of which are not important, suffice to say that it makes a deliberate default). Authorized representative of A presents the cheque to its official Banker 'C' for encashment in Delhi where its head office is situate. Bank 'C' sends it for clearance but the same is also dishonored and consequently Bank 'C' returns the same to A at Delhi. The Legal Cell of Company A is in Gurgaon to which are forwarded all the documents of the said transaction for appropriate legal action. The Legal Cell of Crl.Misc. No. 35842 of 2011 7 Company A at Gurgaon thereupon issued a Notice to Company B, as envisaged under the Negotiable instruments Act and addresses it to the Head office of Company B at Madras/ Chennai. Company B does not make the payment with in the prescribed period of 15 days.
Superimposing the facts of this illustration on the principle of law as enunciated by the Hon'ble Apex Court in K. Bhaskaran's case (supra), the jurisdiction will vest in any of the following competent court to entertain a complaint u/s 138 of the negotiable Instruments Act:
- drawing of the cheque - i.e. at Bombay/ Mumbai - - presentation of the cheque to the bank - i.e. at Delhi - returning of the cheque unpaid by the drawee bank - i.e. at Delhi - giving notice in writing to drawer of the cheque amount demanding payment of the cheque amount - i.e. at Gurgaon - failure of the drawee to make payment within 15 days of the receipt of the notice - i.e. at Madras/ Chennai. Hence, the determining factor to exercise the jurisdiction is the place of commission of any of the five acts which constitute the offence itself, as detailed above in the illustration.
Therefore, keeping in view K. Bhaskaran's case (supra), it is held that complaint Aannexure P4 is maintainable Crl.Misc. No. 35842 of 2011 8 within the territorial jurisdiction of Gurgaon as the complainant company ( respondent herein) has its corporate office at Gurgaon and the collecting bank with regard to the cheque in question is situated at Gurgaon. The criminal courts at Gurgaon have territorial jurisdiction to try and decide the complaint. Additional plea of the petitioner that dishonour of a security cheque can not fasten the liability on the drawer under the Negotiable Instruments Act is also not acceptable. There can be no doubt regarding the fact that the security cheque is an integral part of the commercial process entered into between the Petitioner and Respondent/ Complainant. The security cheque is not only a deterrent for the drawer against dishonoring his financial commitment but can also be legally and validly utilized towards the discharging of the liability of the Drawer. It cannot by any stretch be argued that a security cheque is not handed over or issued in pursuance of any undischarged liability. To hold so would defeat the whole purpose of a security cheque. In the considered opinion of the Court, a security cheque is an acknowledgment of liability on the part of the drawer that the cheque holder may use the security cheque as an alternate mode of discharging his/its liability. Thus the argument of the learned counsel for the petitioner that on dishonouring of a security cheque no offence punishable under section 138 of the Negotiable Crl.Misc. No. 35842 of 2011 9 Instruments Act is made out.
Consequently, this petition is dismissed.
September 5, 2012