company's operations are in ahmedabad, cheque is issued at ahmedabad, cheque deposited in vapi, cheque bounces, notice served at ahmedabad.
are all the aspects governing jurisdiction approriate ?
tanya singh (self employed) 07 January 2010
company's operations are in ahmedabad, cheque is issued at ahmedabad, cheque deposited in vapi, cheque bounces, notice served at ahmedabad.
are all the aspects governing jurisdiction approriate ?
Devajyoti Barman (Advocate) 07 January 2010
In either of the places as mentioned above the case u/s 138 NI Act can be filed.
S.138 of N.I. Act can be invoked in four regions. A complaint can be filed under the areas where the following are situated: Complainant address, Accused address, Complainant Bank address, Accused Bank address. Plz consult a lawyer for your / your lawyer's convenience in attending hearings of cases.
Parveen Kr. Aggarwal (Advocate) 07 January 2010
The Judgment dated 12.12.2008 passed by the Supreme Court of India in case titled 'Harman Electronics Pvt. Ltd. Versus National Panasonic India Limited' bearing Criminal Appeal No. 2021 of 2008 contains detailed discussion about the territorial jurisdiction in cases of complaints under section 138 of the Negotiable Instruments Act.
Parveen Kr. Aggarwal (Advocate) 08 January 2010
The Judgment has been reported in all the major journals reporting criminal cases and is easily traceable the same being a landmark judgment on the point of territorial jurisdiction.
R.K.SUNDERRAJ (LAWYER HUBLI,KARNATAKA) 09 January 2010
dharminder malik (advocate) 09 January 2010
whether payment stopped is treated as cheque dishonoured
Parveen Kr. Aggarwal (Advocate) 09 January 2010
Yes. Certainly a cheque dishonoured for the reason 'stop payment' is covered under section 138 of the N. I. Act.
PJANARDHANA REDDY (ADVOCATE & DIRECTOR) 10 January 2010
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 2021 OF 2008
[arising out of SLP (Criminal) No. 1712 of 2004]
M/S. HARMAN ELECTRONICS (P) LTD.
& ANR. ... APPELLANTS
M/S. NATIONAL PANASONIC INDIA LTD. ... RESPONDENT
S.B. SINHA, J.
1. Leave granted.
2. Territorial jurisdiction of a court to try an offence under Section 138
of the Negotiable Instruments Act, 1881 (for short, "the Act") is in question
in this appeal.
The said question arose in the following circumstances.
Appellants and respondent entered into a business transaction.
Appellant is a resident of Chandigarh. He carries on business in
Chandigarh. The cheque in question admittedly was issued at Chandigarh.
Complainant also has a branch office at Chandigarh although his Head
Office is said to be at Delhi. It is stated that the cheque was presented at
Chandigarh. However, it is in dispute as to whether the said cheque was
sent for collection to Delhi. The cheque was dishonoured also at
Chandigarh. However, the complainant - respondent issued a notice upon
the appellant asking him to pay the amount from New Delhi. Admittedly,
the said notice was served upon the respondent at Chandigarh. On failure on
the part of the appellant to pay the amount within a period of 15 days from
the date of communication of the said letter, a complaint petition was filed
at Delhi. In the complaint petition, it was stated:
"10. That the complainant presented aforesaid
cheque for encashment through its banker Citi
Bank NA. The Punjab & Sind Bank, the banker of
the accused returned the said cheque unpaid with
an endorsement "Payment stopped by drawer"
vide their memo dated 30.12.2000. The aforesaid
memo dated 30.12.2000 was received by the
complainant on 3.1.2001.
11. Upon dishonour of the above mentioned
cheque, the complainant sent notice dt. 11.1.2001
in terms of section 138 of Negotiable Instruments
Act to the accused persons demanding payment of
aforesaid cheque amount at Delhi. The accused
persons were served with said notice by registered
12. By the said notice the accused persons were
called upon to pay to the complainant the sum of
Rs.5,00,000/- within 15 days of the receipt of said
13. Despite the service of notice dt. 11.1.2001
the accused persons have failed and/or neglected
to pay amount of aforesaid cheque within the
stipulated period of 15 days after the service of the
14. Accused persons clandestinely/deliberately
and with malafide intention and by failing to make
the payment of the said dishonoured cheque within
the stipulated period have committed the offence
under Section 138 read with Section 141 of the
Negotiable Instruments Act, 1881.
15. The complainant further submit that the
complaint is being filed within 1 month from the
date of expiring of the 15 days grace time given
under the notice for payment of said amount.
16. This Hon'ble Court has jurisdiction to
entertain the present complaint as complainant
carries on its business at Delhi. The demand notice
dt. 11.1.2001 was issued from Delhi and the
amount of cheque was payable at Delhi and
because accused failed to make the payment of
amount of said cheque within statutory period of
15 days from receipt of notice."
3. Cognizance of the offence was taken against the appellant by the
Questioning the jurisdiction of the court of Additional Sessions
Judge, New Delhi, an application was filed which was disposed of by the
learned Additional Sessions Judge, New Delhi in terms of an order dated
"2. The main grievance of the accused is that
the accused persons, as well as the complainant
are carrying their business at Chandigarh. The
cheque in question was given by the accused to the
complainant in Chandigarh, and it was present to
their banker at Chandigarh. Only notice was given
by the complainant to the accused persons, from
Delhi. That the same was served on the accused
admittedly, at Chandigarh and that both the parties
are carrying out their business also at Chandigarh.
Therefore, it is contended that it would amount to
absurdity if the complaint of the complainant is
entertained, in Delhi, in view of the case law
reported in AIR 1999 Supreme Court 3782, K.
Bhaskaran Vs. Sankaran Vaidyyan Balan and
6. I have considered the arguments advanced
at the bar, and I am of the considered opinion that
this court has jurisdiction to entertain this
complaint, as admittedly the notice was sent by the
complainant to the accused persons from Delhi,
and the complainant is having its registered office
at Delhi, and that they are carrying out the
business at Delhi. Admittedly, it is also evident
from the record that accused allegedly failed to
make the payment at Delhi, as the demand was
made from Delhi and the payment was to be made
to the complainant at Delhi."
4. By reason of the impugned judgment, Criminal Miscellaneous
Petition filed by the appellant has been dismissed.
5. Mr. Ashok Grover, learned Senior Counsel appearing on behalf of the
appellant would submit that as the entire cause of action arose within the
jurisdiction of the courts at Chandigarh, the learned Additional Sessions
Judge, New Delhi had no jurisdiction to take cognizance of the offence.
6. Mr. Sakesh Kumar, learned counsel appearing on behalf of the
respondent, on the other hand, would contend:
i. The cheque although was deposited at Chandigarh, the same
having been sent by Citi Bank NA for collection at Delhi, the
amount became payable at Delhi.
ii. Giving of a notice being a condition precedent for filing a
complaint petition under Section 138 of the Negotiable
Instruments Act, a notice having been issued from Delhi, the
Delhi Court had the requisite jurisdiction, particularly when
demand was made upon the appellant to pay the complainant at
7. Section 138 of the Negotiable Instruments Act reads as under:
"138. Dishonour of cheque for insufficiency,
etc., of funds in the account. - Where any cheque
drawn by a person on an account maintained by
him with a banker for payment of any amount of
money to another person from out of that account
for the discharge, in whole or in part, of any debt
or other liability, is returned by the bank unpaid,
either because of the amount of money standing to
the credit of that account is insufficient to honour
the cheque or that it exceeds the amount arranged
to be paid from that account by an agreement
made with that bank, such person shall be deemed
to have committed an offence and shall, without
prejudice to any other provisions of this Act, be
punished with imprisonment for a term which may
be extended to two years, or with fine which may
extend to twice the amount of the cheque, or with
Provided that nothing contained in this
section shall apply unless--
(a) the cheque has been presented to the
bank within a period of six months from the date
on which it is drawn or within the period of its
validity, whichever is earlier;
(b) the payee or the holder in due course of
the cheque, as the case may be, makes a demand
for the payment of the said amount of money by
giving a notice in writing, to the drawer of the
cheque, within thirty days of the receipt of
information by him from the bank regarding the
return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make
the payment of the said amount of money to the
payee or, as the case may be, to the holder in due
course of the cheque, within fifteen days of the
receipt of the said notice.
Explanation.-- For the purposes of this section,
"debt or other liability" means a legally
enforceable debt or other liability."
8. The proviso appended thereto imposes certain conditions before a
complaint petition can be entertained.
9. Reliance has been placed by both the learned Additional Sessions
Judge as also the High Court on a decision of this Court in K. Bhaskaran v.
Sankaran Vaidhyan Balan and Anr. [(1999) 7 SCC 510]. This Court opined
that the offence under Section 138 of the Act can be completed only with
the concatenation of a number of acts, namely, (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 was opined that if
five different acts were done in five different localities, any one of the
courts exercising jurisdiction in one of the five local areas can become the
place of trial for the offence under Section 138 of the Act and the
complainant would be at liberty to file a complaint petition at any of those
places. As regards the requirements of giving a notice as also receipt
thereof by the accused, it was stated:
"18. On the part of the payee he has to make a
demand by "giving a notice" in writing. If that
was the only requirement to complete the offence
on the failure of the drawer to pay the cheque
amount within 15 days from the date of such
"giving", the travails of the prosecution would
have been very much lessened. But the legislature
says that failure on the part of the drawer to pay
the amount should be within 15 days "of the
receipt" of the said notice. It is, therefore, clear
that "giving notice" in the context is not the same
as receipt of notice. Giving is a process of which
receipt is the accomplishment. It is for the payee
to perform the former process by sending the
notice to the drawer at the correct address. "
10. The court, however, refused to give a strict interpretation to the said
provisions despite noticing Black's Law Dictionary in regard to the
meaning of the terms `giving of notice' and `receiving of the notice' in the
"19. In Black's Law Dictionary, 'giving of notice'
is distinguished from 'receiving of the notice.'
(vide page 621) "A person notifies or gives notice
to another by taking such steps as may be
reasonably required to inform the other in the
ordinary course, whether or not such other actually
comes to know of it." A person 'receives' a notice
when it is duly delivered to him or at the place of
20. If a strict interpretation is given that the drawer
should have actually received the notice for the
period of 15 days to start running no matter that
the payee sent the notice on the correct address, a
trickster cheque drawer would get the premium to
avoid receiving the notice by different strategies
and he could escape from the legal consequences
of Section 138 of the Act. It must be borne in mind
that Court should not adopt in interpretation which
helps a dishonest evader and clips an honest payee
as that would defeat the very legislative measure."
11. For the said purpose, a presumption was drawn as regards refusal to
accept a notice. We may, before proceeding to advert to the contentions
raised by the parties hereto, refer to another decision of this Court in M/s
Dalmia Cement (Bharat) Ltd. vs. M/s Galaxy Traders & Agencies Ltd. &
ors. [AIR 2001 SC 676], wherein this Court categorically held:
"6. Section 27 of the General Clauses Act deals
with the presumption of service of a letter sent by
post. The dispatcher of a notice has, therefore, a
right to insist upon and claim the benefit of such a
presumption. But as the presumption is rebuttable
one, he has two options before him. One is to
concede to the stand of the sendee that as a matter
of fact he did not receive the notice, and the other
is to contest the sendee's stand and take the risk for
proving that he in fact received the notice. It is
open to the despatcher to adopt either of the
options. If he opts the former, he can afford to take
appropriate steps for the effective service of notice
upon the addressee. Such a course appears to have
been adopted by the appellant-company in this
case and the complaint filed, admittedly, within
limitation from the date of the notice of service
conceded to have been served upon the
(Underlying is mine)
It was furthermore held:
"The payee or holder of the cheque may, therefore,
without taking peremptory action in exercise of his
right under clause (b) of Section 138 of the Act, go
on presenting the cheque so as to enable him to
exercise such right at any point of time during the
validity of the cheque. But once a notice under
clause (b) of Section 138 of the Act is 'received' by
the drawer of the cheque, the payee or the holder
of the cheque forfeits his right to again present the
cheque as cause of action has accrued when there
was failure to pay the amount within the
prescribed period and the period of limitation
starts to run which cannot be stopped on any
account. This Court emphasised that `needless to
say the period of one month from filing the
complaint will be reckoned from the date
immediately falling the day on which the period of
15 days from the date of the receipt of the notice
by the drawer expires'.
12. Indisputably, the parties had been carrying on business at Chandigarh.
The Head Office of the complainant - respondent may be at Delhi but it has
a branch office at Chandigarh. It is not in dispute that the transactions were
carried on only from Chandigarh. It is furthermore not in dispute that the
cheque was issued and presented at Chandigarh. The complaint petition is
totally silent as to whether the said cheque was presented at Delhi. As
indicated hereinbefore, the learned counsel appearing on behalf of the
complainant - respondent contended that in fact the cheque was put in a
drop box but as the payment was to be obtained from the Delhi Bank, it was
sent to Delhi. In support of the said contention, a purported certificate
issued by the Citi Bank NA has been enclosed with the counter affidavit,
which reads as under:
"This is to confirm that M/s National Panasonic
India Pvt. Ltd. (NPI) having registered office at
AB- 11, Community Centre, Safdarjung Enclave,
New Delhi - 110029 are maintaining a Current
Account No. 2431009 with our Bank at Jeevan
Bharti Building, 3, Parliament Street, New Delhi-
110001 only and not at any other place in India
Further confirmed that CITI bank has provided the
facility for collection of Cheques/Demand Drafts
from branches of NPI located at various
places/cities in India. However, all amounts of
cheques/Demand Drafts so collected on behalf of
National Panasonic India Private Limited are
forwarded and debited/credited to the aforesaid
Current Account No. 2431009 with our Bank at
Jeeval Bharti Building, 3, Parliament Street, New
Delhi - 110001."
13. The complaint petition does not show that the cheque was presented
at Delhi. It is absolutely silent in that regard. The facility for collection of
the cheque admittedly was available at Chandigrh and the said facility was
availed of. The certificate dated 24.6.2003, which was not produced before
the learned court taking cognizance, even if taken into consideration does
not show that the cheque was presented at the Delhi Branch of the Citi
Bank. We, therefore, have no other option but to presume that the cheque
was presented at Chandigarh. Indisputably, the dishonour of the cheque
also took place at Chandigarh. The only question, therefore, which arises
for consideration is that as to whether sending of notice from Delhi itself
would give rise to a cause of action for taking cognizance under the
Negotiable Instruments Act.
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 proviso 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.
15. It is in the aforementioned situation, the distinction noticed by the
Bench in M/s Dalmia Cement (Bharat) Ltd. (supra) and the meaning of
`giving of notice' and `receiving of notice' as contained in Black's Law
Dictionary assumes significant.
16. What is meant by `communication' albeit in different context, has
been considered by a Constitution Bench of this Court in State of Punjab vs.
Amar Singh Harika [AIR 1966 SC 1313] stating:
"It is plain that the mere passing of an order of
dismissal would not be effective unless it is
published and communicated to the officer
17. The distinction between passing of an order which is final and a
communication thereof is not necessary has been noticed by this Court
subsequently in State of Punjab vs. Khemi Ram [(1969) 3 SCC 28] stating:
"In our view, once an order is issued and it is sent
out to the concerned Government servant, it must
be held to have been communicated to him, no
matter when he actually received it. We find it
difficult to persuade ourselves to accept the view
that it is only from the date of the actual receipt by
him that the order becomes effective. If that be the
true meaning of communication, it would be
possible for a Government servant to effectively
thwart an order by avoiding receipt of it by one
method or the other till after the date of his
retirement even though such an order is passed
and despatched to him before such date. An officer
against whom action is sought to be taken, thus,
may go away from the address given by him for
service of such orders or may deliberately give a
wrong address and thus prevent or delay its receipt
and be able to defeat its service on him. Such a
meaning of the word 'communication' ought not to
be given unless the provision in question expressly
so provides. Actual knowledge by him of an order
where it is one of dismissal, may, perhaps, become
necessary because of the consequences which the
decision in The State of Punjab v. Amar Singh
(AIR 1966 SC 1313) contemplates. But such
consequences would not occur in the case of an
officer who has proceeded on leave and against
whom an order of suspension is passed because in
his case there is no question of his doing any act or
passing any order and such act or order being
challenged as invalid."
For constitution of an offence under Section 138 of the Act, the
notice must be received by the accused. It may be deemed to have been
received in certain situations. The word `communicate' inter alia means `to
make known, inform, convey, etc.'
18. This Court in Sultan Sadik vs. Sanjay Raj Subba and Ors [(2004) 2
SCC 377], held:
"33. The decision of this Court in Khemi Ram
[(1969) 3 SCC 28] relied upon by Mr. Bachawat is
not apposite as therein an order of suspension was
in question. This Court in the said decision itself
referred to its decision in State of Punjab v. Amar
Singh Harika [AIR 1966 SC 1313], which stated
that communication of an order dismissing an
employee from service is imperative. If
communication of an order for terminating the
jural relationship is imperative, a fortiori it would
also be imperative at the threshold."
19. Section 177 of the Code of Criminal Procedure determines the
jurisdiction of a court trying the matter. The court ordinarily will have the
jurisdiction only where the offence has been committed. The provisions of
Sections 178 and 179 of the Code of Criminal Procedure are exceptions to
Section 177. These provisions presuppose that all offences are local.
20. Therefore, the place where an offence has been committed plays an
important role. It is one thing to say that a presumption is raised that notice
is served but it is another thing to say that service of notice may not be held
to be of any significance or may be held to be wholly unnecessary.
21. In Mosaraf Hossain Khan vs. Bhagheeratha Engg. Ltd. [(2006) 3 SCC
658], this court held:
"30. In terms of Section 177 of the Code of
Criminal Procedure every offence shall ordinarily
be inquired into and tried by a court within whose
local jurisdiction it was committed. 178 provides
for place of inquiry or trial in the following terms:
`178. (a) When it is uncertain in which of
several local areas an offence was
(b) where an offence is committed partly in
one local area and partly in another, or
(c) where an offence is a continuing one,
and continues to be committed in more local
areas than one, or
(d) where it consists of several acts done in
different local areas.
31. A bare perusal of the complaint petition would
clearly go to show that according to the
complainant the entire cause of action arose within
the jurisdiction of the district courts of Birbhum
and in that view of the matter it is that court which
will have jurisdiction to take congnizance of the
offence. In fact the jurisdiction of the court of
CJM, Suri, Birbhum is not in question. It is not
contended that the complainant had suppressed
material fact and which if not disclosed would
have demonstrated that the offence was committed
outside the jurisdiction of the said court. Even if
Section 178 of the Code of Criminal Procedure is
attracted, the court of the Chief Judicial
Magistrate, Birbhum will alone have jurisdiction
in the matter.
32. Sending of cheques from Ernakulam or
the respondents having an office at that
place did not form an integral part of 'cause
of action' for which the complaint petition
was filed by the appellant and cognizance of
the offence under Section 138 of the
Negotiable Instruments Act, 1881 was taken
by the Chief Judicial Magistrate, Suri."
22. In Y.A. Ajit. v. Sofana Ajit [AIR 2007 SC 3151), this Court held:
"The crucial question is whether any part of the
cause of action arose within the jurisdiction of the
concerned Court. In terms of Section 177 of the
Code it is the place where the offence was
committed. In essence it is the cause of action for
initiation of the proceedings against the accused.
While in civil cases, normally the expression
"cause of action" is used, in criminal cases as
stated in Section 177 of the Code, reference is to
the local jurisdiction where the offence is
committed. These variations in etymological
expression do not really make the position
different. The expression "cause of action" is
therefore not a stranger to criminal cases."
23. Presumption raised in support of service of notice would depend upon
the facts and circumstances of each case. Its application is on the question
of law or the fact obtaining. Presumption has to be raised not on the
hypothesis or surmises but if the foundational facts are laid down therefor.
Only because presumption of service of notice is possible to be raised at the
trial, the same by itself may not be a ground to hold that the distinction
between giving of notice and service of notice ceases to exist.
24. Indisputably all statutes deserve their strict application, but while
doing so the cardinal principles therefor cannot be lost sight of. A Court
derives a jurisdiction only when the cause of action arose within his
jurisdiction. The same cannot be conferred by any act of omission or
commission on the part of the accused. A distinction must also be borne in
mind between the ingredient of an offence and commission of a part of the
offence. While issuance of a notice by the holder of a negotiable instrument
is necessary, service thereof is also imperative. Only on a service of such
notice and failure on the part of the accused to pay the demanded amount
within a period of 15 days thereafter, commission of an completes. Giving
of notice, therefore, cannot have any precedent over the service. It is only
from that view of the matter in Dalmia Cement (Bharat) Ltd. v. Galaxy
Traders & Agencies Ltd., [ (2001) 6 SCC 463 ] emphasis has been laid on
service of notice.
25. We cannot, as things stand today, be oblivious of the fact that a
banking institution holding several cheques signed by the same borrower
cannot only present the cheque for its encashment at four different places
but also may serve notices from four different places so as to enable it to file
four complaint cases at four different places. This only causes grave
harassment to the accused. It is, therefore, necessary in a case of this nature
to strike a balance between the right of the complainant and the right of an
accused vis-`-vis the provisions of the Code of Criminal Procedure.
26. Learned counsel for the respondent contends that the principle that
the debtor must seek the creditor should be applied in a case of this nature.
27. We regret that such a principle cannot be applied in a criminal case.
Jurisdiction of the Court to try a criminal case is governed by the provisions
of the Criminal Procedure Code and not on common law principle.
28. For the views we have taken it must be held that Delhi High Court
has no jurisdiction to try the case. We, however, while exercising our
jurisdiction under Article 142 of the Constitution of India direct that
Complaint Case No.1549 pending in the Court of Shri N.K. Kaushik,
Additional Sessions Judge, New Delhi, be transferred to the Court of the
District and Sessions Judge, Chandigarh who shall assign the same to a
court of competent jurisdiction. The transferee court shall fix a specific date
of hearing and shall not grant any adjournment on the date on which the
complainant and its witnesses are present. The transferee court is
furthermore directed to dispose of the matter within a period of six months
from the date of receipt of the records of the case on assignment by the
learned District and Sessions Judge, Chandigarh.
29. The appeal is allowed with the aforementioned observations and
directions. There shall, however, be no order as to costs.
December 12, 2008
CRIMINAL APPELLATE JURISDICTION
umar (propraitor) 08 March 2010
umar (propraitor) 08 March 2010