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REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION  

CRIMINAL APPEAL NO.1457    OF 2013 (Arising out of SLP (Criminal) No. 7325 of 2012)

M/s. Escorts Limited  … Appellant

Versus

Rama Mukherjee  … Respondent

J U D G M E N T

Jagdish Singh Khehar, J.

1. This Court on 21.2.2013 directed that the instant SLP (Crl.) No.7325 of  

2012 be listed after the pronouncement of judgment in Criminal Appeal no. 808  

of 2013 (arising out of SLP (Crl.) No. 9434 of 2011), titled Nishant Aggarwal vs.  

Kailash Kumar Sharma.  Nishant Aggarwal’s case (supra) was disposed of by  

this Court on 1.7.2013.  The pointed question, which arose for consideration in  

this Court’s aforesaid determination was, whether the Court within the jurisdiction  

whereof, the complainant had presented the dishonoured cheque (issued by an  

accused), had the jurisdiction to entertain a petition filed under Section 138 of the  

Negotiable Instruments Act.  While disposing Criminal Appeal No.808 of 2013,  

this Court returned a finding in the affirmative by observing as under:

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“(7)    We have  already  narrated  the  case  of  both  the  parties  in  the  pleadings portion.  In order to answer the only question, it is relevant  to  note that the undisputed facts in the context  of  territorial  jurisdiction of  the learned Magistrate at Bhiwani are  that  the  drawee  of  the  cheque  i.e., the respondent/complainant is  a  resident  of  Bhiwani.   The  native  village of the respondent, namely, village Barsana is situated  in  District  Bhiwani.   The  respondent  owns  ancestral  agricultural  land  at  village  Barsana, District Bhiwani.  It is  also  asserted  that  the  respondent  is  running his bank account with Canara Bank, Bhiwani and is also  residing  at the present address for the last about two decades.  In view  of  the  same, it is the claim of the respondent that he bonafidely  presented  the  cheque in his bank at Bhiwani which was further presented to the drawer’s  Bank   at  Guwahati.   The  cheque  was  returned  uncashed   to   the  respondent’s  bank  at Bhiwani with the endorsement “payment stopped  by  drawer”.  The  respondent received the bounced cheque back from his  bank at Bhiwani.  Thereafter,   the respondent sent a legal notice under  Section 138 of  the  N.I.  Act  to  the appellant from Bhiwani.  In turn, the  appellant sent a  reply  to  the  said notice which the respondent received  at  Bhiwani.   In  view  of  non-payment   of  the  cheque  amount,  the  respondent filed a complaint under Sections  138  and 141 of the N.I. Act  before the learned Magistrate at Bhiwani.  

(8)    Inasmuch as the issue in question  is  directly  considered  by  this  Court in K. Bhaskaran (supra), before going into the applicability of other  decisions, it is useful to refer the relevant portion of the judgment  in paras  10 and 11 of the said case which reads thus:

“10. Learned counsel for the appellant first contended that the  trial  court has no jurisdiction to try this case and hence  the  High  Court  should not  have  converted  the  acquittal  into  conviction  on  the  strength of the evidence collected in such a  trial.  Of  course,  the  trial court had upheld the  pleas  of  the  accused  that  it  had  no  jurisdiction to try the case.          

11. We fail  to comprehend as to how the trial  court  could have  found so regarding the jurisdiction question. Under Section 177 of  the Code “every offence shall ordinarily be enquired into and tried in  a  court  within  whose  jurisdiction  it  was  committed”.  The  locality  where the Bank (which dishonoured the cheque) is situated cannot  be regarded as the sole criterion to determine the place of offence.  It must be remembered that offence under Section 138 would not be  completed with the dishonour of the cheque.  It  attains  completion  only  with  the failure of the drawer of the cheque to pay the  cheque  amount  within the expiry of 15 days mentioned  in  clause  (c)  of  the  proviso  to Section 138 of  the  Act.  It is normally  difficult  to  fix

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up  a particular locality as the place of  failure to pay the amount  covered by the cheque.  A place,  for  that  purpose,  would depend  upon a variety  of  factors.  It  can either  be at  the place where the  drawer resides  or at the place where the payee resides or at the  place where  either   of  them carries   on  business.   Hence,  the  difficulty to fix up any particular locality as the place of occurrence  for the offence  under  Section 138 of the Act.”

It is clear that this Court also discussed the relevant  provisions  of  the  Code, particularly, Sections 177, 178 and  179  and  in  the  light  of  the  language used, interpreted Section 138 of the N.I. Act and  laid  down  that  Section 138 has five components, namely,

i)    drawing of the cheque; ii)   presentation of the cheque to the bank; iii)  returning the cheque unpaid by the drawee bank; iv)  giving  notice  in   writing   to   the   drawer   of   the  cheque  

demanding payment of the cheque amount; and v)  failure of the drawer to make payment within 15 days of  the  

receipt of the notice.

After saying so, this Court concluded that the complainant can choose any  one of the five places to file a complaint.  The further discussion in the said  judgment is extracted hereunder:       

“14. The  offence  under  Section  138  of  the  Act  can  be  completed only  with the concatenation of a number of acts. The  following are the acts which are components of the said offence:  

(1) drawing of  the  cheque,       (2) presentation of the cheque to the bank,  (3) returning  the  cheque unpaid by the drawee bank,  (4) giving  notice  in  writing  to  the   drawer  of  the  cheque  

demanding payment of the cheque amount,  (5) failure  of the drawer to make payment within  15  days  

of  the  receipt  of  the notice.

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  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  Code.  In this  context a reference to Section 178(d)  of the Code is useful.  It is  extracted below:      

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“178. (a)-(c)    *     *     *

(d) where the offence consists of several acts done in different  local  areas, it may be enquired 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.”  

(9)     Para 11 of  K. Bhaskaran (supra),  as quoted above,  clarified the  place in the context of territorial  jurisdiction  as  per  the  fifth  component,  namely, “failure of  the drawer to  make  payment  within  15  days  of  the  receipt.”  As  rightly  pointed  out  by  learned  senior  counsel  for  the  respondent, the place  of  failure  to  pay  the  amount  has  been  clearly  qualified by this Court as the place where the drawer resides or  the  place  where the payee resides.  In view of the same and in the light  of  the  law  laid down by this Court in K.Bhaskaran (supra), we are of the view that  the  learned Magistrate at  Bhiwani  has  territorial   jurisdiction  to  try  the  complaint filed by the  respondent  as  the  respondent  is  undisputedly  a  resident of Bhiwani.  Further, in K. Bhaskaran  (supra),  while  considering  the territorial jurisdiction at great length, this Court has concluded  that the  amplitude of territorial jurisdiction pertaining to  a  complaint  under the N.I.  Act is very wide and expansive and we are in entire agreement  with the  same.  

*** *** ***

(12)   Mr. Ahmadi, learned senior counsel for the appellant has  also  relied  on a decision of this  Court  in  Harman  Electronics  Private  Limited  and  Another vs. National Panasonic India Private Limited, (2009) 1 SCC 720.  In Harman Electronics (supra), the complainant and the accused entered  into a business transaction.  The accused was a resident of Chandigarh.  He  carried on  the  business  in  Chandigarh  and  issued  a  cheque  in  question    at  Chandigarh.   The  complainant  had  a  Branch  Office  at  Chandigarh  although his  Head Office  was  at  Delhi.   He presented  the  cheque  given  by  the  accused  at  Chandigarh.   The  cheque  was

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dishonoured at Chandigarh.   The complainant issued a notice upon the  accused asking him to pay the amount from New Delhi.  The said notice  was served on the accused at Chandigarh.   On failure on the part of the  accused  to  pay  the  amount  within  15  days  from  the  date  of  the  communication of the said letter, the complainant filed a complaint at Delhi.  In the complaint, it was stated that  the  Delhi  Court has jurisdiction to try  the case because the  complainant  was  carrying  on business at Delhi,  the demand notice was issued from Delhi,  the  amount  of cheque was  payable at Delhi and the accused failed to make  the  payment  of the said  cheque within the statutory period of 15  days  from  the  date  of receipt of  notice.  It is further seen that the cognizance of the offence was taken by  the learned Magistrate at Delhi.  The accused questioned the jurisdiction of  the Magistrate at Delhi before the Addl.  Sessions Judge, New Delhi.  The  Sessions  Judge  held  that  the  Magistrate  at  Delhi  had jurisdiction to  entertain  the  complaint  as,  admittedly,  the  notice   was   sent  by  the  complainant to the accused from Delhi and the complainant was  having its  Registered Office at Delhi and was carrying on business at  Delhi.   The  learned Judge has also observed that the accused failed to make payment  at Delhi as the demand was made from Delhi and the payment was to be  made to the complainant at Delhi.  The Delhi High Court dismissed the  petition filed by the accused.   Thereafter,  the accused approached this  Court.    This Court  considered Section 138 of  the N.I.   Act   and  also  referred  to K.Bhaskaran’s case (supra) and quoted the five components of  offence  under Section  138  which  have  been  noted  in  paragraph  supra.   This   Court reiterated that the five different acts which are the  components of  offence under Section 138 of the N.I. Act 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 N.I. Act and the complainant would be at liberty  to file a complaint  at any of those places.  Ultimately, this Court held that  the  Chandigarh   Court  had  jurisdiction   to   entertain   the   complaint  because  the  parties  were carrying on business at Chandigarh, Branch  Office  of  the  complainant  was also in Chandigarh, the transactions were  carried  on   only   from   Chandigarh  and  the  cheque  was  issued  and  presented at Chandigarh.  This Court pointed out that the complaint did not  show that the cheque was presented at Delhi, because it was absolutely  silent in that regard and, therefore, there was no option but to presume that  the cheque was presented at Chandigarh.   It  is not in dispute that the  dishonour  of  the  cheque  also  took  place  at Chandigarh and, therefore,  the only question which arose before  this  Court for consideration was  whether the sending of notice from Delhi itself  would give rise to a cause  of action in taking cognizance under the N.I. Act.   In such circumstances,  we are of the view that Harman  Electronics  (supra)  is only an authority  on the question  where  a  court  will  have  jurisdiction because only notice

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is  issued  from  the  place  which  falls  within  its jurisdiction and it does  not deviate from the other principles laid down  in K. Bhaskaran (supra).  This Court has accepted that the place where the cheque was presented  and dishonoured has jurisdiction to try  the complaint.   In  this  way,  this  Court concluded that issuance  of  notice  would  not  by itself give rise to a  cause  of  action  but  communication  of  the  notice would.  In other  words, the court clarified only  on  the  service  in  such notice and failure  on the part of the accused to  pay  the  demanded  amount within a period  of  15  days,  thereafter,  the  commission  of  an  offence completes.  We  are of  the  view  that  this  Court  in  Harman  Electronics (supra) affirmed  what  it  had  said  in  K.  Bhaskaran  (supra)  that  court   within  whose  jurisdiction the cheque is presented and in whose  jurisdiction  there is  failure to make payment within 15 days of the receipt of notice can  have  jurisdiction to try the offence under Section 138 of the N.I.  Act.   It  is also  relevant  to point  out  that  while holding that  the Chandigarh Court   has  jurisdiction, this Court in Harman Electronics (supra) observed that in  the  case before it, the complaint was silent as to whether the said  cheque  was presented at Delhi.  In the case on hand, it is  categorically  stated  that  the  cheque  was  presented  at  Bhiwani  whereas  in   Harman  Electronics  (supra) the dishonour had taken place at Chandigarh and this  fact  was  taken  into account while  holding  that  Chandigarh  court  has  jurisdiction.  In  the complaint in question, it is specifically stated  that  the  dishonour  took place at Bhiwani.  We  are  also  satisfied  that  nothing  said   in   Harman  Electronics  (supra)  had  adverse  impact  on   the  complainant’s  case  in  the present case.                              

(13)      As observed  earlier,  we must note that in K. Bhaskaran (supra),   this Court  has  held  that  Section 178 of the Code has widened the scope  of  jurisdiction  of   a   criminal   court  and Section  179 of  the  Code has  stretched  it  to  still  a  wider  horizon. Further, for the sake of repetition,   we  reiterate  that  the  judgment  in Ishar Alloy (supra) does not affect the  ratio in K. Bhaskaran (supra)  which provides jurisdiction at the place of  residence of the payer and the  payee. We are satisfied that in the facts  and circumstances  and  even  on  merits, the High Court rightly refused to  exercise  its  extraordinary  jurisdiction under Section 482 of the Code  and  dismissed  the  petition  filed  by  the appellant-accused.  

(14)   In the light of the above discussion, we hold that the ratio laid down  in K.Bhaskaran (supra) squarely applies to the case on hand.  The said  principle was correctly applied by the learned Sessions Judge  as  well  as  the High Court.  Consequently, the appeal fails and the same is dismissed.  In view of the dismissal of the appeal, the interim order granted by this  Court on 09.12.2011 shall stand vacated.”

(emphasis is ours)

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2. Leave granted.

3. We  have  heard  learned  counsel  for  the  rival  parties.   The  reason  for  

posting the instant matter for hearing after the disposal of Nishant Aggarwal’s  

case (supra) was, that the controversy arising herein, was exactly the same as  

was sought to be determined by this court in Nishant Aggarwal’s case (supra).  

The factual position necessary for the disposal of the instant Civil Appeal, was  

noticed in paragraph 13 of the impugned order, passed by the Delhi High Court.  

The same is being extracted hereunder:

“13. Thus M/s Religare Finvest (supra) relied on by the Petitioner was a  case where even the drawer bank’s clearing branch which dishonoured the  cheque was also situated at New Delhi.  In the said case, the jurisdiction  was vested in the Courts at Delhi because of the drawer’s bank’s clearing  branch being at Delhi and not because the cheque was presented in the  payee bank or that the legal notice of demand was issued from a place at  Delhi.  Applying the decisions aforementioned to the facts of the present  case, I do not consider it fit to state that just because the cheques were  presented at Delhi or the demand notice was sent from Delhi, Courts at  Delhi would have jurisdiction to try the present case.”   

(emphasis is ours)

4. Having taken into consideration the fact that the cheque was presented for  

encashment by the complainant at Delhi, and having referred to the judgments  

rendered by this Court in K. Bhaskaran vs. Shankaran Vaidhyam Balan & Anr.,  

(1999) 7 SCC 510, Shri Ishar Alloys Steels Ltd. Vs. Jayaswal NECO Ltd., (2003)  

3 SCC 609, and Harman Electronics Private Ltd. Vs. National Panasonic India  

Pvt. Ltd., (2009) 1 SCC 720,  the High Court accepted the prayer made by the  

drawee of the cheque (i.e. the respondent herein) to conclude, that the Courts at

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Delhi did not have the jurisdiction to try the complaint filed by the appellant, under  

Section  138  of  the  Negotiable  Instruments  Act.   Having  so  concluded,  the  

Metropolitan Magistrate before whom the matter was pending, was directed to  

return the complaint to the respondent.  Liberty was granted to the appellant, to  

file the returned petition before the jurisdictional Court at Kolkata.  

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’s case (supra).  Therein it has been  

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 23  rd   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

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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  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 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 Code.  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

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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 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 Limited    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  respondent-complainant 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 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

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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 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

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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.   

9. Allowed in the aforesaid terms.

……………………………...,CJI (P. Sathasivam)

………………………………..,J. (Jagdish Singh Khehar)

New Delhi; September 17, 2013.

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