TaxTMI 
TaxTMI 
2010 (9) TMI 1229
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....ed before the court having territorial jurisdiction to try the same. 3. It is averred in the complaint petition that the petitioner/complainant is a public limited company having its registered and corporate office at New Delhi and is dealing with the business of providing its customers various types of loans. It is further stated that the respondent/accused availed loan facility from the petitioner/complainant but the account became irregular. Towards discharge of part of the debts, the respondent/accused issued cheques, which when presented by the petitioner/complainant to its bankers namely, HDFC Bank Ltd., Connaught Place, New Delhi, were returned unpaid by the bankers of the accused under the return memo dated 29.12.2008, with the remarks, "insufficient funds . The return memo was received by the petitioner/complainant at Delhi. In para 4 of the complaint, it is stated that the aforesaid cheques were submitted by the respondent/accused at the corporate and registered office of the complainant/petitioner. Thereafter, a legal demand notice was issued by the petitioner/complainant to the respondent/accused from Delhi, duly dispatched on 14.01.2009. As the respondent/accused fa....
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....the case of K. Bhaskaran (supra), remains the fountainhead and has been reiterated from time to time. It is further urged that the aspect of territorial jurisdiction ought not to have been gone into by the learned Metropolitan Magistrate at the pre-summoning stage, and the said aspect could have been considered and decided either ways, even after cognizance was taken. 6. In support of his submission that the averments contained in the complaint petition prima facie revealed that it was maintainable within the territorial jurisdiction of Delhi, counsel for the petitioner relied on the following judgments: i. K. Bhaskaran v. Sankaran Vaidhyan Balan and Anr. MANU/SC/0625/1999MANU/SC/0625/1999 : (1999) 7 SCC 510 ii. Trisuns Chemical Industry v. Rajesh Agarwal and Ors. MANU/SC/0581/1999MANU/SC/0581/1999 : (1999) 8 SCC 686. iii. Alchemist Ltd. v. State Bank of Sikkim MANU/SC/1290/2007MANU/SC/1290/2007 : (2007) 11 SCC 335 iv. Smt. Shamshad Begum v. B. Mohammed MANU/SC/8218/2008MANU/SC/8218/2008 : 2008 (13) SCALE 669 v. Rajiv Modi v. Sanjay Jain ....
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....e High Court of Kerala, the Single Judge accepted complainant's version that the cheque was issued within the territorial limits of the trial court's jurisdiction and reversed the order of the Magistrate. Aggrieved by the order of the High Court, the appellant/accused approached the Supreme Court. While dealing with the submissions of both the parties on the question of territorial jurisdiction, the Supreme Court observed as below: 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 ....
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....er 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 Act. 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 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....
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....ce may be made to the following observations: 13. ...Therefore, when there is nothing in Chapter XIV of the Code to impair the power of a Judicial Magistrate of the First Class taking cognizance of the offence on the strength of any territorial reason it is impermissible to deprive such a Magistrate of the power to take cognizance of an offence - of course, in certain special enactments special provisions are incorporated for restricting the power of taking cognizance of offences falling under such acts. But such provisions are protected by non obstante clauses. Anyway this is a different matter. 14. The jurisdictional aspect becomes relevant only when the question of enquiry or trial arises. It is therefore a fallacious thinking that only a Magistrate having jurisdiction to try the case has the power to take cognizance of the offence. If he is a Magistrate of the First Class his power to take cognizance of the offence is not impaired by territorial restrictions. After taking cognizance he may have to decide as to the court which has jurisdiction to enquire into or try the offence and that situation would reach only ....
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....SCC 711; Bloom Dekor Ltd. v. Subash Himatlal Desai (1994) 6 SCC 322; Rajasthan High Court Advocates' Assn. v. Union of India (2001) 2 SCC 294; Y. Abraham Ajith v. Inspector of Police (2004) 8 SCC 100; and Alchemist Ltd. v. State Bank of Sikkim (2007) 11 SCC 335, the Supreme Court crystallized the law as follows: 22. It is evident from the above decisions, that, to constitute the territorial jurisdiction, the whole or a part of "cause of action" must have arisen within the territorial jurisdiction of the Court and the same must be decided on the basis of the averments made in the complaint without embarking upon an inquiry as to the correctness or otherwise of the said fact." xxx xxx xxx 29. In view of the above principles, the Court on basis of the averments made in the complaint, if it is prima facie of the opinion that the whole or a part of cause of action has arisen in its jurisdiction, it can certainly take cognizance of the complaint. There is no need to ascertain that the allegations made are true in fact. (emphasis added) 14. The attention of this Court has....
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....of offence and that a place, for the purpose of invoking the provisions of Section 138 of the Act, would depend on a variety of facts. Pertinently, the term used by the Supreme Court in the aforesaid case for completing the offence under Section 138 of the Act is "acts" and not "cause of action". The said position emerges clearly from a bare reading of paras 11, 14 and 16 of the aforesaid judgment reproduced hereinabove. Therefore, this Court is not inclined to agree with the submission of the counsel for the respondent that the major portion of the cause of action in the present case arose only after the cheque issued by the respondent/accused was forwarded by the banker of the petitioner/complainant to the banker of the accused, and where, on presentation, the cheque was dishonoured, which in the present case, is situated not in Delhi, but in Pune. 16. It is clear from the provision itself that an offence under Section 138 would not be completed with the dishonour of the cheque. Rather, it attains completion only with the failure of the drawer to pay the cheque amount within the expiry of the fifteen days after the legal notice is served upon the drawer of the cheque/s whose c....
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.... judgment, which reads as below: 2.(a) What is meant by, "the bank" as mentioned in Clause (a) of the proviso to Section 138 of the Negotiable Instruments Act, 1881? (b) Does such bank mean the bank of the drawer of the cheque or covers within its ambit any bank including the collecting bank of the payee of the cheque? (c) To which bank the cheque is to be presented for the purposes of attracting the penal provisions of Section 138 of the Act? 19. It is therefore quite apparent that the aforesaid judgment did not deal with the issue of territorial jurisdiction at all. Rather, the focus was on the meaning of term, "the bank", as mentioned in Clause (a) of the proviso to Section 138 of the Act and whether such a bank would take within its fold any bank, including the collecting bank of the payee of the cheque, for the purposes of examining the validity of the cheque under the Act. It is settled law that a decision is not an authority for a proposition which did not fall for its consideration. Hence, the aforesaid judgment cannot be said to have a bearing on the issue of territorial jurisdiction to ....
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....e said judgment as to the location, where the other acts mentioned in the case of K. Bhaskaran (supra) were done. In this view of the matter, neither of the two judgments can be stated to be applicable to the facts of the instant case. 22. With respect to the submission of the counsel for the respondent that cause of action has to be considered in the context of substantive law vis-à-vis procedural law, it may be noticed that Section 4(2) of the Cr.P.C. postulates that all offences under any other law shall be investigated, inquired into, tried and otherwise, dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences. Section 5 of the Cr.P.C., which is the saving clause, stipulates that nothing contained in the Code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force. 23. In the present case, the Negotiable Ins....