Page 1

       REPORTABLE    

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL No.    808         OF 2013 (Arising out of S.L.P. (Crl.) No. 9434 of 2011)

Nishant Aggarwal               .... Appellant(s)

Versus

Kailash Kumar Sharma                               .... Respondent(s)       

J U D G M E N T

P.Sathasivam,J.

1) Leave granted.

2) The question which has to be decided in this appeal is  

whether  the  Court,  where  a  cheque  is  deposited  for  

collection,  would  have  territorial  jurisdiction  to  try  the  

accused for an offence punishable under Section 138 of the  

Negotiable Instruments Act, 1881 (in short “the N.I.Act”) or  

would it be only the Court exercising territorial jurisdiction  

over the drawee bank or the bank on which the cheque is  

drawn?

1

Page 2

3) This appeal is directed against the final judgment and  

order dated 31.10.2011 passed by the High Court of Punjab  

& Haryana at Chandigarh in Criminal Misc. No. M-32542 of  

2011 whereby the High Court dismissed the petition filed by  

the appellant herein on the ground that it is not a fit case for  

invoking  Section  482  of  the  Code  of  Criminal  Procedure,  

1973 (hereinafter referred to as “the Code”).   

4) Brief facts:  

a) The appellant herein is the Director of M/s Byrni Steel  

Private  Limited  and  his  father  Mr.  B.L.  Aggarwal  is  the  

Managing  Director  of  M/s  Mechfeb  Engineering  Industries  

Private Limited situated at Meghalaya and Guwahati.   The  

respondent was associated with both the abovementioned  

firms as he used to bring business from various private firms  

and Government Departments on commission basis.

b) During  the  course  of  business,  the  appellant  herein  

issued  a  post-dated  cheque  bearing  No.  925504  dated  

01.08.2009 drawn on Standard Chartered Bank,  Guwahati,  

for Rs. 28,62,700/- in favour of the complainant-respondent  

herein in order to discharge his legal enforceable liabilities.  

2

Page 3

Vide  letter  dated  21.01.2006,  the  appellant  informed  the  

Branch  Manager,  Standard  Chartered  Bank,  Guwahati,  as  

well as the officer in-charge, Dispur Police Station, Guwahati  

regarding  missing  of  the  said  cheque.   Thereafter,  on  

28.03.2008,  the  appellant  wrote  a  letter  to  the  Standard  

Chartered Bank for stop payment of the said cheque as the  

same was missing.   

c) According to the respondent, on 13.08.2009, when he  

presented the same for collection through its bankers, viz.,  

Canara Bank, Bhiwani, Haryana, it was returned unpaid on  

11.09.2009 due to stop payment by the appellant.  When the  

respondent approached the appellant about dishonour of the  

same, he was told to present the same again for collection  

after  one  month.   On  15.10.2009,  the  respondent  again  

presented the cheque for collection but the same was again  

returned unpaid on 14.12.2009.   

d) On 11.01.2010, the respondent sent a legal notice to  

the  appellant  asking  him to  pay  Rs.  28,62,700/-  within  a  

period of 15 days from the date of the receipt of the notice  

3

Page 4

along with the interest, failing which, he shall be liable to be  

prosecuted under Section 138(b) of the N.I. Act.   

e) On 05.02.2010, the appellant herein filed a complaint  

petition being C.R.  No.  340 of  2010 in  the Court  of  Addl.  

Chief  Judicial  Magistrate,  Kamrup  at  Guwahati  under  

Sections  379,  381,411 and 420 of  the Indian Penal  Code,  

1860  (in  short  “the  IPC”)  against  the  respondent.  On  

05.03.2010, the respondent filed a complaint being C.R. No.  

9 of 2010 before the Court of J.M.I.C., Bhiwani under Section  

190  of  the  Code  for  taking  cognizance  of  the  offence  

committed by the appellant under Sections 138 and 141 of  

the N.I. Act.   

f) The  Additional  Chief  Judicial  Magistrate,  Kamrup,  by  

order  dated  15.06.2010,  in  C.R.  No.  340  of  2010,  issued  

bailable  warrants  against  the  respondent.  Thereafter,  on  

06.08.2010, the respondent filed an application for recall of  

the  bailable  warrants  issued  against  him.    Ultimately,  

learned  Judicial  Magistrate,  Bhiwani,  vide  order  dated  

05.03.2011,  accepted the application with the observation  

that  the  Court  at  Bhiwani  has  no  jurisdiction  and  the  

4

Page 5

complaint was returned for presentation before the proper  

Court having jurisdiction.   

g) Dissatisfied  with  the  order  dated  05.03.2011,  the  

respondent filed Criminal Revision Petition being No. 35 of  

2011  before  the  Court  of  Additional  Sessions  Judge  IV,  

Bihwani.  By order dated 12.05.2011, the Additional Sessions  

Judge set aside the order of the Judicial Magistrate, Bhiwani  

and allowed the revision.   

h) Aggrieved by the said order, the appellant herein filed  

Crl. Misc. No. M-32542 of 2011 before the High Court.  The  

High Court, by impugned order dated 31.10.2011, dismissed  

the petition.   

i) Against the said order, the appellant has preferred this  

appeal by way of special leave before this Court.

5) Heard Mr.  Huzefa  Ahmadi,  learned senior  counsel  for  

the appellant-accused and Mr. Mahabir Singh, learned senior  

counsel for the respondent-the complainant.

6) It is the claim of the appellant that the present case is  

not covered by the judgment of this Court in K. Bhaskaran  

vs. Sankaran Vaidhyan Balan and Another, (1999) 7 SCC  

5

Page 6

510.  On  the  other  hand,  it  is  the  specific  claim  of  the  

respondent that insofar as territorial jurisdiction of the case  

on hand, namely, complaint filed under Section 138 of the  

N.I.  Act  is  concerned,  the  decision  of  this  Court  in  K.  

Bhasaran (supra) squarely applies, accordingly, the Court  

at Bhiwani is competent to try and dispose of the complaint  

filed by him.  It is also pointed out that the said issue was  

rightly considered and accepted by the Additional Sessions  

Judge, Bhiwani as well as by the High Court.   

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  

6

Page 7

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  

7

Page 8

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  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;

8

Page 9

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: “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  

9

Page 10

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  

10

Page 11

under the N.I. Act is very wide and expansive and we are in  

entire agreement with the same.  

10) Mr. Ahmadi, learned senior counsel for the appellant in  

support  of  his  claim  that  the  Court  at  Bhiwani  has  no  

jurisdiction  heavily  relied  on  the  decision  of  this  Court  in  

Shri  Ishar Alloy Steels Ltd. vs.  Jayaswals  Neco Ltd.,  

(2001)  3  SCC  609.   We  were  taken  through  the  entire  

judgment.  Though the case is also related to N.I. Act, the  

issue  of  territorial  jurisdiction  was  not  the  subject-matter  

thereof.   In  Ishar  Alloy  Steels  (supra), a  three-Judge  

Bench of this Court defined the term “the bank” appearing in  

clause (a) of Section 138 of the N.I. Act as the drawer’s bank.  

It was defined in the context of the statutory period of six  

months as mentioned in clause (a), hence, this Court held  

that the date of presentation of the cheque for calculating  

the statutory time period of six months will be the date of  

presentation of the cheque to the drawer’s bank i.e. payee  

bank and not the drawee’s bank i.e. collecting bank.  This  

Court  has  correctly  applied  the  principle  of  strict  

interpretation appreciating that Section 138 of the N.I. Act  

11

Page 12

creates an offence as the drawer of the cheque cannot be  

expected  or  saddled  with  the  liability  to  hold  the  cheque  

amount in his account beyond six months.  The reading of  

the entire decision in Isher Alloy Steel (supra) shows that  

jurisdiction of the Court to take cognizance arises only where  

cheque  is  presented  to  the  bank  of  drawer  either  by  

drawee’s  bank  or  the  drawee/payee  personally  within  six  

months.  In other words, the analysis of the said decision,  

the ratio of  Isher Alloy Steel (supra) deals with such a  

situation where the cheque has been presented within six  

months to the drawer’s bank by the payee in any manner.  

Inasmuch as the interpretation relates to filing of complaint  

within the statutory time period of six months, we are of the  

view that the reliance on the law laid down in  Isher Alloy  

Steel (supra) has no relevance as far as the present case is  

concerned.  In fact, that is the reason that in  Isher Alloy  

Steel (supra), the judgment in K.Bhaskaran (supra) was  

not discussed since territorial jurisdiction was not the issue  

in that case.  In view of the same, the definition of the term  

“the bank” envisaged in Isher Alloy Steel (supra) cannot  

12

Page 13

be employed to decide the jurisdictional aspect and dilute  

the ratio of the judgment in K. Bhaskaran (supra).  Hence,  

we are of the view that on the strength of the judgment in  

Isher Alloy Steel (supra) defining the term “the bank”, it  

cannot  be  said  that  jurisdiction  to  file  a  complaint  under  

Section  138  of  the  N.I.  Act  does  not  lie  at  the  place  of  

drawee’s bank. To put it clearly, the judgment in Isher Alloy  

Steel (supra)  does not affect the ratio of the judgment in  

K.Bhaskaran (supra) which provides for jurisdiction at the  

place  of  residence  of  the  payer  and  the  payee.   In  such  

circumstances,  we  are  of  the  view  that  the  judgment  in  

Isher Alloy Steel (supra) as well as judgments of various  

High  Courts  relied  on  by  the  appellant  cannot  be  read  

against  the  respondent  to  hold  that  the  Magistrate  at  

Bhiwani does not have the jurisdiction to try the complaint.   

11) Though several decisions of various High Courts were  

cited before us,  we deem it  appropriate to refer only one  

Division Bench decision of the Bombay High Court rendered  

in Criminal Writ Petition No. 3158 of 2009, Mrs. Preetha S.  

Babu vs.  Voltas Limited and Another, reported in 2010  

13

Page 14

(3) Maharashtra Law Journal 234. The Division Bench, after  

analyzing the factual position of both sides, correctly applied  

the ratio laid down in  K. Bhaskaran (supra) finding that  

the Mumbai Court has jurisdiction to entertain the complaint,  

dismissed the said writ petition.

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 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  

14

Page 15

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,  admitedly,  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  

15

Page 16

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  

16

Page 17

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  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.  

17

Page 18

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.  

18

Page 19

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.  

………….…………………………J.           

19

Page 20

               (P. SATHASIVAM)                                  

       ………….…………………………J.                  (JAGDISH SINGH KHEHAR)   

NEW DELHI; JULY 01, 2013.

20