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REPORTABLE    IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NOS. 1997­1998 OF 2013 (arising out of SLP(Crl.)Nos.2595­2596  of 2013)

DEVENDRA KISHANLAL DAGALIA       … APPELLANT

VERUS

DWARKESH DIAMONDS PVT. LTD. AND ORS.     … RESPONDENTS

J U D G M E N T

SUDHANSU JYOTI MUKHOPADHAYA, J.

Leave granted. These appeals have been preferred by  

the appellant­complainant against the judgment and  

order dated 6th December, 2012 passed by the High Court  

of Judicature at Bombay in Criminal Writ Petition  

Nos.3992 and 3993 of 2011.   By the impugned judgment  

the High Court set aside the order passed by Sessions  

Judge in CRA No.301 of 2010 and upheld the order passed  

by the Special Metropolitan Magistrate.

2. The appellant filed complaints being CC  

No.3142/SS/2008 and CC No.3286/SS/2008 under Section

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138 of Negotiable Instruments Act (hereinafter referred  

to as ‘the N.I. Act’) in the Court of the Special  

Metropolitan Magistrate at Small Causes Court on 28th  

July, 2008 and 18th  August, 2008. Learned Metropolitan  

Magistrate after recording of the pre­summoning  

evidence issued summons on the accused under Section  

204 Cr.P.C.   The accused­respondents 1, 2 & 3 then  

filed application under Section 201 Cr.P.C. for return  

of complaint for want of jurisdiction. They alleged  

that the entire transaction took place at New Delhi and  

only the legal notice was issued from Mumbai and hence  

the learned Magistrate has no jurisdiction to try and  

entertain the complaint. A similar application was  

filed by the accused in CC No.3286/SS/2008. Thereafter,  

the learned Magistrate by order dated 5th January, 2010  

allowed the application under Section 201 Cr.P.C. and  

returned the complaint for want of jurisdiction. A  

similar order was passed by the learned Magistrate in  

CC No.3286/SS/2008.

3. Being aggrieved, the appellant­complainant filed  

Criminal Revision Applications Nos.301 & 302 of 2010

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before the Sessions Court, Greater Bombay. Learned  

Sessions Judge by the judgment and order dated 2nd  

November, 2011 allowed the criminal revision  

applications and set aside the orders of learned  

Magistrate and the matter was remitted back to the  

Magistrate. However, at the instance of Respondent  

Nos.1, 2 & 3 the order passed by the Sessions Judge was  

set aside by the High Court by the order impugned.

4. Learned counsel appearing on behalf of the  

appellant submitted that the Magistrate after finding  

sufficient ground for proceeding and after issuance of  

summons under Section 204 Cr.P.C., has no jurisdiction  

to recall or review the order by exercising power under  

Section 201 Cr.P.C. It is further contended that the  

High Court failed to consider the aforesaid fact and  

has no answer to the issue as was raised and decided by  

the learned Magistrate. Further, according to the  

learned counsel for the appellant, in the matter under  

Section 138 of the N.I.Act the appellant having been  

issued legal notice from Mumbai, the Magistrate has  

jurisdiction to try and entertain the complaint.

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5. Per contra, according to the learned counsel for  

the respondents, the High Court of Bombay has taken due  

course and settled all the questions raised in the  

complaint filed by the appellant. The complaint filed  

by the appellant is silent with regard to place where  

(a) the order was given by the respondent; (b) goods  

were supplied; (c) the payment was agreed to be made:  

(d) the cheques in question were issued: (e) the  

cheques in question were dishonoured and (f) the  

parties to the petition intended to make and receive  

the same. It is accepted that the notice in question  

was issued from Mumbai. It is contended that issuance  

of notice would not by itself give rise to a cause of  

action for filing the complaint at Mumbai.

6. Further, according to the respondents the appellant  

has concealed the relevant   facts purposefully,  

particularly the fact that the entire transaction had  

taken place at Delhi and,   therefore, the Magistrate  

has returned the complaint under Section 201 Cr.P.C.

7. We have heard learned counsel for the parties and  

perused the record.

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8. The main questions involved in the present case are  

:

(i) Whether the Magistrate after having found  sufficient ground for proceeding in case and  issued summons under Section 204 Cr.P.C. has  the jurisdiction to recall or review the order  by exercising its power under Section 201  Cr.P.C.; and

(ii)Whether the  petition under Section 138 of  the N.I. Act was maintainable at Mumbai on the  ground that goods were supplied from Mumbai to  Delhi and cheques were handed over at Mumbai  and legal notice was issued from Mumbai.

9. To decide the issue, it is necessary to notice the  

relevant provisions of the   Cr.P.C.   as discussed  

hereunder:

Chapter XV of Cr.P.C. relates to complaints to the  

Magistrates whereas Chapter XVI relates to commencement  

of proceedings before the Magistrates.

10. Section 200 of Cr.P.C. relates to examination of  

complaint. A Magsitrate taking cognizance of an offence  

on complaint is required to examine the complaint and  

both the complainant and witness present,  if any.  On

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such examination of the complaint and the witness, if  

the Magistrate is of the opinion that there is no  

ground for proceeding, he has to dismiss the complaint  

under Section 203 Cr.P.C.

11. Section 201 Cr.P.C. lays down the procedure to be  

followed by the Magistrate not competent to take  

cognizance of the offence. If the complaint is made to  

a Magistrate who is not competent to take cognizance of  

the complaint he shall return the written complaint for  

its presentation before a proper court and if the  

complaint is not in writing, direct the complainant to  

move before the proper court.  

12. Section 202 contemplates “postponement of issue of  

process” on receipt of a complaint in the circumstances  

mentioned therein. If the Magistrate is of the opinion  

that there is no sufficient ground for proceeding,  

under Section 203 Cr.P.C. he can dismiss the complaint  

by briefly recording his reasons.  

13. The commencement of proceedings before the  

Magistrate under Chapter XVI starts with issue of  

process under Section 204 Cr.P.C. If in the opinion of

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a Magistrate taking cognizance of the offence there is  

sufficient ground for proceeding, and the case appears  

to be a summons­case, he shall issue his summons for  

the attendance of the accused, but if it is a warrant­

case, he may issue a warrant, or, if he thinks fit, a  

summons, for causing the accused to be brought or to  

appear at a certain time before such Magistrate or (if  

he has no jurisdiction himself) some other Magistrate  

having jurisdiction. No summons or warrant shall be  

issued against the accused under sub­section (1) until  

a list of the prosecution witnesses has been filed.  In  

a proceeding instituted upon a complaint made in  

writing, every summons or warrant issued under sub­

section (1) shall be accompanied by a copy of such  

complaint.

14. The aforesaid provisions make it clear that the  

Magistrate is required to issue summons for attendance  

of the accused only on examination of the complaint and  

on satisfaction that there is sufficient ground for  

taking cognizance of the offence and that it is  

competent to take such cognizance of offence.  Once the

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decision is taken and summon is issued, in the absence  

of a power of review including inherent power to do so,  

remedy lies before the High Court under Section 482 Cr.  

P.C  or under Article 227 of the Constitution of India  

and not before the Magistrate.

15. Issue with regard to the power of Magistrate to  

recall process of summons fell for consideration before  

a three­Judge Bench of this Court in Adalat Prasad vs.  

Rooplal Jindal and others, (2004) 7 SCC 338.  Therein  

the following observation was made by this Court:

“15. It is true that if a Magistrate takes  cognizance of an offence, issues process  without there being any allegation against  the accused or any material implicating the  accused or in contravention of provisions of  Sections 200 and 202, the order of the  Magistrate may be vitiated, but then the  relief an aggrieved accused can obtain at  that stage is not by invoking Section 203 of  the Code because the Criminal Procedure Code  does not contemplate a review of an order.  Hence in the absence of any review power or  inherent power with the subordinate criminal  courts, the remedy lies in invoking Section  482 of the Code.”

16. Section 201 Cr.P.C., as noticed earlier, can be  

applied immediately on receipt of a complaint, if the

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Magistrate is not competent to take cognizance of the  

offence. Once the Magistrate taking cognizance of an  

offence forms his opinion that there is sufficient  

ground for proceeding and issues summons under Section  

204 Cr.P.C., there is no question of going back  

following the procedure under Section 201 Cr.P.C. In  

absence of any power of review or recall the order of  

issuance of summons, the Magistrate cannot recall the  

summon in exercise of power under Section 201 Cr.P.C.  

The first question is thus answered in negative and  in  

favour of the appellant.

17. The question   concerning the jurisdiction of  

Magistrate to issue summons fell for consideration  

before this Court in  M/s. Escorts Limited vs. Rama  

Mukherjee(Criminal Appeal No.1457 of 2013), 2013 (11)  

Scale 487.  In the said case the Court noticed the  

earlier decision in K. Bhaskaran vs. Shankaran Vaidhyam  

Balan & Anr., (1999) 7 SCC 510.   In the light of the  

language used in Section 138 of the Act, the Court  

found five components in Section 138 of the Act,  

namely,

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(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; and

(5) failure of the drawer to make  payment within 15 days of the  receipt of the notice.”

After saying so, this Court held that offence under  

Section 138 of the Act can be completed only with the  

concatenation of all the above components and for that  

it is not necessary that all the above five acts should  

have perpetrated at the same locality; it is possible  

that each of those five acts were done at five  

different localities, but a concatenation of all the  

above five is a sine qua non for the completion of the  

offence under Section 138 of the Act. Having noticed  

the aforesaid provisions, this court in  Escorts Ltd.  

held as follow:

“5. It is apparent, that the conclusion drawn  by the High Court, in the impugned order  dated 27.4.2012, is not in consonance with  the decision rendered by this Court in  Nishant Aggarwal vs. Kailash Kumar Sharma,  [2013(7) Scale 753] . Therein it has been

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concluded, that the Court within the  jurisdiction whereof, the dishonoured cheque  was presented for encashment, would have the  jurisdiction to entertain the complaint filed  under Section 138 of the Negotiable  Instruments Act.

6.  In addition to the judgment rendered by  this Court in Nishant Aggarwal’s case,  another bench of this Court has also arrived  at the conclusion drawn in Nishant Aggarwal’s  case, on the pointed issue under  consideration. In this behalf, reference may  be made to the decision rendered in FIL  Industries Limited vs. Imtiyaz Ahmed Bhat,  Criminal Appeal No. 1168 of 2013 (arising out  of SLP (Crl.) No.8096 of 2012), decided on  12.8.2013. This Court in the above matter  held as under:

“3. The facts very briefly are that the  respondent delivered a cheque dated 23rd  December, 2010 for an amount of  `29,69,746/­(Rupees Twenty Nine lakhs  sixty nine thousand seven hundred forty  six only) on Jammu and Kashmir Bank  Limited, Branch Imam Saheb, Shopian, to  the appellant towards some business  dealings and the appellant deposited the  same in UCO Bank, Sopore. When the cheque  amount was not encashed and collected in  the account of the appellant in UCO Bank  Sopore, the appellant filed a complaint  under Section 138 of the Negotiable  Instruments Act, 1881 before the Chief  Judicial Magistrate, Sopore. The  respondent sought dismissal of the  complaint on the ground that the Chief

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Judicial Magistrate had no territorial  jurisdiction to  entertain the complaint.  By order dated 29th November,  2011, the  learned Chief Judicial Magistrate,  Sopore, however, held that he had the  jurisdiction to  entertain the complaint.  Aggrieved, the appellant filed Criminal  Miscellaneous  Petition  No. 431 of 2011  under Section 561A of the Jammu and  Kashmir Criminal Procedure Code and by the  impugned order dated 2nd June, 2012, the  High Court quashed the complaint saying  that the Court at Sopore had no  jurisdiction to receive and entertain the  complaint.

4. We have heard learned counsel for the  parties and we find that in K.Bhaskaran v.  Sankaran Vidyabalan and Another, (1999) 7  SCC 510, this Court had the occasion to  consider as to which Court would have the  jurisdiction to entertain the complaint  under Section 138 of the Negotiable  Instruments Act and in paras 14, 15 and 16  of the judgment in the aforesaid case held  as under:­

“14. 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

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payment within 15 days of the receipt of  the notice.

15. It is not necessary that all the above  five acts should have been perpetrated at  the same locality. It is possible that  each of those five acts could be done at 5  different localities. But concatenation of  all the above five is a sine qua non for  the completion of the offence under  Section 138 of the Act. In this context a  reference to Section 178(d) of the Code is  useful. It is extracted below:

“Where the offence consists of several  acts done in different local areas, it  may be inquired into or tried by a Court  having jurisdiction over any of such  local areas.”

  16. Thus it is clear, if the 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. 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 one 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.”

5. It will be clear from the aforesaid  paragraphs of the judgment in K.  Bhaskaran’s case (Supra) that five  different acts compose the offence under

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Section 138 of the Negotiable Instruments  Act and if any one of these five different  acts was done in a particular locality the  Court having territorial jurisdiction on  that locality can become the place of trial  for the offence under Section 138 of the  Negotiable Instruments Act and, therefore,  the complainant can choose any one of those  courts having jurisdiction over any one of  the local area within the territorial  limits of which any one of the five acts  was done. In the facts of the present case,  it is not disputed that the cheque was  presented to the UCO Bank at Sopore in  which the appellant had an account and,  therefore the Court at Sopore had  territorial jurisdiction to entertain and  try the complaint.

6.  Learned counsel for the respondent,  however, relied on the decision of this  Court in Harman Electronics Private Limited  and  Another  v.  National   Panasonic  India  Private Limite,d, (2009) 1 SCC 720, to  submit that the Court at Shopian would have  the territorial jurisdiction. We have  perused the aforesaid decision of this  Court in Harman Electronics Private Limited  (Supra) and we find on a reading of  paragraphs 11 and 12 of the judgment in the  aforesaid case that in that case the issue  was as to whether sending of a notice from  Delhi itself would give rise to a cause of  action for taking cognizance of a case  under Section 138 of the Negotiable  Instruments Act when the parties had been  carrying on business at Chandigarh, the  Head Office of the respondent­complainant  was at Delhi but it had a branch at  Chandigarh and all the transactions were  carried out only from Chandigarh. On these  facts, this Court held that Delhi from  where the notice under Section 138 of the

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Negotiable Instruments Act was issued by  the respondent would not have had  jurisdiction to entertain the complaint  under Section 138 of the Negotiable  Instruments Act. This question does not  arise in the facts of the present case.

7. For the aforesaid reasons, we allow the  appeal, set aside the impugned judgment of  the High Court and remand the matter to the  Chief Judicial Magistrate, Sopore for  decision in accordance with law.”

(emphasis is ours).

7.  In view of the above, having taken into  consideration the factual position noticed by  the High Court in paragraph 13 of the  impugned judgment, we are of the view, that  the High Court erred in concluding that the  courts at Delhi, did not have the  jurisdiction to try the petition filed by the  appellant under Section 138 of the Negotiable  Instruments Act. The impugned order dated  27.4.2012 passed by the High Court is  accordingly liable to be set aside. The same  is, therefore, hereby set aside.

8.  Despite the conclusion drawn by us  hereinabove, it would be relevant to mention,  that our instant determination is based on  the factual position expressed by the High  Court in paragraph 13 of the impugned order.  During the course of hearing, whilst it was  the case of the learned counsel for the  appellant (based on certain documents  available on the file of the present case) to  reiterate that the cheque in question, which  was the subject matter of the appellant’s  claim under Section 138 of the Negotiable  Instruments Act, was presented for encashment  at Delhi; it was the contention of the

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learned counsel for the respondent, that the  aforesaid cheque was presented for encashment  at Faridabad. It was accordingly submitted,  that the jurisdictional issue needed to be  decided by accepting, that the dishonoured  cheque was presented at Faridabad. It is not  possible for us to entertain and adjudicate  upon a disputed question of fact. We have  rendered the instant decision, on the factual  position taken into consideration by the High  Court. In case, the respondent herein is so  advised, it would be open to him to raise an  objection on the issue of jurisdiction, based  on a factual position now asserted before us.  The determination rendered by us must be  deemed to be on the factual position taken  into consideration by the High Court (in  paragraph 13, extracted above), while  disposing of the issue of jurisdiction. In  case the respondent raises such a plea, the  same shall be entertained and disposed of in  accordance with law.”

18. In the case in hand it is admitted that the  

business dealing was held at Mumbai;  the products were  

supplied from Mumbai to New Delhi, cheques were handed  

over at Mumbai and the cheques were dishounoured by the  

bankers of respondents at New Delhi, and legal notice  

was issued from Mumbai. Thus, at least one act out of  

the five ingredients of Section 138 of the Act having  

committed at Mumbai, the complaint preferred by the  

complainant before the Magistrate at Mumbai was

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maintainable. The second question is thereby, answered  

in affirmative and in favour of the appellant.

19. In view of the reasons recorded above, we have no  

other option but to interfere with the impugned order  

passed by the High Court.   We accordingly, set aside  

the order dated 6th  December, 2012 passed by the High  

Court, affirm the order passed by the Sessions Judge  

and allow the appeals.

……………………………………………….J.               (SUDHANSU JYOTI MUKHOPADHAYA)

……………………………………………….J.              (V. GOPALA GOWDA)

NEW DELHI, NOVEMBER 25, 2013.