Shree Raj Travels & Tours Ltd. & Ors v. Destination of the World (Subcontinent) P. Ltd

PRADEEP NANDRAJOG, J. For orders, see Cri.M.C.No.1056/2011. SEPTEMBER 21, 2011 mm -, (PRADEE:::Il.jOG) JUDGE Certify that the digital and physical file have been compared and the digital data is as per the physical file and no page is missing. :-'k 'J;;) + fiN THE H COUH-f OF-DE T !i\ijf.'VV DElHli I r , ,- " !' r '' l] ' l !i-r()fYI(-::'nr re;;;·c,n,/,-v:J nn ' _f_ 0'-' 1 ·o.er-,t-einLrP('' ,<:/( _j_ . ,. --:-- ,_. •' --: I ..,_ ;' - V' - j_Qcjgn7eot pronounced on: 21st Septen1ber 20.71 ,10).55/2011 SHREE RAJ TRAVElS G( TOUR5 LTD. 6( .. .... :Petitioner; Mr.SunH Gupta, Sr.Advocate with Mr._latln Zaveri, Mr.Gaurav Agarvval and Mr.Tanrnaya Through: P1g a i-vva I, :L\dvocates versus .r= THE \1\/0RLD (SUBCONTH\JENT) PPJV/-\TE UID. . .... Responcjert Through: Malhotra, Advocate ,CHLM.C. 1166/2011 SHREE HAJ TRAVELS & TOUP\5 L·ro. & ORS. . .... Petitioners ln" 1• Mr.Suni11 upta, W ·,tt-1 ""/ill-Zaver1-il!li- ···;::1'/ I 11 1 "-' l·- __ . ,_d ... _..!il-;,v AganNa! and Mr.Tanmaya Aga nNa J\dvocates versus OESTIN/1,TION OF THE (SU E ) PP-1\/i\TE ILTD. .. . ., Hesponolent' Througn: Mr.fl1nindya Malhotra, Advocate r 1" C..... . ., n "1':._.. .. ..t ;/. :: i.e:=' SHREE TRAVELS & TOURS LTD. 6( ORS. .. ... Petitioners Through: Mr.Su:11 Gt.1pta/ Sr.Advocate-vvith Mr.j]ab.n Zaverl, !'\ Ci => r·· A '1 ':0 °"1 a' !Viii" -,· 'l r"'l a\ rj \r v o II OJ' , , , • ' . o 1 j eo Aga , /i.,dvocates C:-Uvl.Ci'Jo.1D56/:2011 8, n12ttt.;s t-= ;:1fSe t of 2. J versus DESTINA,THJl\1 OF THE \NORLD (SUBCONTINEI\IT) PRIVATE lTD. . .... Respondent Through: Mr.Anindya Maihotra, Advocate CRL.M.C. SHREE RAJ TRAVELS 6l LTD. & ORS. . .... Petitioners Mr.SunH Gupta, Sr.Advocate with Zaveri, Mr.Gaurav /\garvvod and M r.Ta nmaya Agarwai, A,dvocates Through: versus DESTINIATION OF THE \1\/0RLDI(SidBCONTiNEINT) PRIVATE LTD. . .... Respondent Through: · Malhotra, Advocate CRLM.C 1173/2011 SHREE Rl\1 TRAVELS & LTD. & ORS. .. ... Petitioners Through: Mr.Su,r1il Gupta, with Mr.,Jatin Zaveri,. Mr.Gaurav Agarwal and Mr.Tanmaya Aga rwa 11, J\dvocates versus DESTINATION OF THE \/\JORLD (SUBCONTINENT) PRiVATE L ... :. Respondent Through: Mr.Anindya Malhotra, Advocate CRLM.C. 1114/2011 SHREE RAj TRAVELS & TOU LTD. & ORS. . .... Through: Mr.Sunil Gupta, Sr.AdJvocate with Mr-,Jatin Zaveri, Mr.Gaurav ,6,ganNal and Mr.Tanmaya Agarwal, Advocates Cri.M.C.I\Jo.1056/2.011 gl connecter' mc:;tters ?age Z of 27 ! versus DESTINATION OF THE VIIORILD PRIVATE lTD. .. .... Respondent Through: Mr.Anindya MlaH1otra, Advocate CRLM.C. SHREE RAJ TRAVELS 0( LTD. 01 ORS .. .. ... Petitioners. ·rhrougil: Mr.Suni'i Gupta,. Sr.Advocate with Mr . .Jabn Zaveri, Mr.Gaurav Agarwail and M r.Tanrnaya A.garvvall ... ll,dvocates versus DESTII\IAT!ON OF THE \NOPd_D (SUBCONTiNENT) LTD. .. ... Respondent Through: Mr.Anindya Malilotra, l'\dvocate SHREE TRAVELS & TOURS LTD. E:,( ORS. .. ... Petitioners Through: Gupta, Sr.Advocate with Mr.Jatin Zaveri, Mr.Gaurav Agarwal and Mr.Tanmaya Aga rwa i, /-'\d\/ocates versus DEST!N.ATiON OF THE VVORLD (SUBCONTH\i ENT) PRIVATE L TID. .. ... Respondent Through: Mr.Aninclya Malhotra, Advocate CRLM.C. SHREE i:Z.f.\J TR/\VELS E,( TOUR:S LTD. E:,( ORS. . .... Petitioners Mr.Sunii Gupta, Sr.Advocate with Mr.jlatin Zaveri, Mr.Gaurav Agarwa:i and Mr.Tanrnaya Through. Cri.IVl.C.i\lo,1056/2011 8t connected matters ·""'"· ---.! -- Agarwal, ,i\dvocate.s versus OF THE WOF.LD (SUBCONTINEr\!T) PRIVATE LTD. . .... Respondent Through: Mr.fl111indya Malhotra, Advocate CRLM.C 1179/2011 SHREE RAj TRAVELS 6c TOURS LTD. &c ORS. .. ... Petitioners Mr.Sunll Gupta, Sr.f\dvocate with Mi-.Jatin Zaveri, Mr.{::Jaurav Agarvval and Mr.Tanmaya Agarwal, Advocates Through: versus DEST!I\lATiON OF THE \1\/0P( (SUBCONTlNENT) PRIVATE LTD. . .... Respondent Through: !\1r.Anindya Maihotra, Aolvocate CRLM.C. SHREE RAJ TRAVELS & TOURS LTD. & ORS. . .... Petitioners Thr-ough: Gupta, Sr.Advocate with M1·:jaicin Zaveri, Mr.Gaurav Agarwal and Mr.Tanmaya Agarwal, Advocates versus DESTINATION OF THE \NORLD (SUBCONTINENT) PRIVATE !LTD. .. ... Respondent Through: Mr.Anindya Malhotra, Advocate CRLM.C. 118:3/2011 SHREE RAj TRAVELS 6c TOURS LTD. 6c ORS. · Pe·;-l·t·IO.--JP""'::: """""

1.,_ fl >......i J Througfl: fV1r.Su!lil Gupta, Sr.Advocate with r.jjatin Zaveri, f\t1!r.Caurav o·J.M.C.I\Io.1056/2011 & connected nl'lttPI'S Page 4 of 21' P\ga,;-1/Vi3il and Aga rwc;d, versus DESTiNATION OF THE VVORLID lC (SUBC:ONTINENT)PRIVATE LTD. .. ... Respondent Througil: Malhotra, t\dvocate CRLM.C. JL1B6£?011 SHREE P,;6J TP\1-\VELS t,, LTD. 6c ORS. . .... Petitioners Gupta, SrJ-\dvocate Through: with Mrjatin Zaveri, Mr.Gaurav Agarwal and Mr.Tanmaya p,dvocates versus DESTINATION OF THE \NOR.LD PRIVATE LTD. .. ... Respondent Through: Mr./i)lllindya Malhotra, Advocate . CRLM.C. lltP/2011 SHREE P,AJ TRAVELS & TOURS LTD. 6c ORS. . .... Petitioners Through: Mr.SunH Gupta, Sr.Advocate with Za.veri, Mr.Gaurav AganAral and Mr.Tanrnaya t\g a rwa l, versus DESTINATION OF THE \1\fORLD LTD. .. ... Respondent Through: Malhotra, .Advocate CRl.M.C 1188/2011 c I··' R. -t::-'E P T'Q.A' IF' c r, T'CJI T[) _J 1 n \ _ " \I"\! u 'v -· L . .J 0, I , v _ U . . & OP\S. . .... Petitioners Through: Mr.Sunii Gupta, Sr.Advocate Cri.J\/I.C.No.l056/2011 fSr. connected mattet·.s Page 5i of Z1 ! l with Mr.jatin ZaverL Mr.Gaurav' Agarvval and Mr.Tanmaya Agarwal, Advocates versus DESTINt1.TION OF THE \/VOHLD PRIVATE D. . .... Responde11t Through: Mr.l\ninoJya Malhotra, Advocate CORAIM: HON'BLE MR. jUSTIICE NAINDRJl\J)OG

¶1\1\/hethel-u-·,1e Reporters of may be 30ovvEd to see the judgment?

¶2To be referreo1 to Reporte1-or not'?

¶3Whether the judgment should be reported in the Digest? . PRADEEP NA,NDR.AiOG, .JL

¶1Briefly stated the facts leadingi to filing of the above captioned petitions are that respondent i.e. 'Destination of World (Subcontinent) Pvt. Ltd.' a connpany registered under '· the Companies Act fi!ed 15 compla1ints under Section 138 of the Negotiable Instruments Act, 1881 (11ereinafter referred to as the 'f\ll ;{\ct'); 3 cheques bei g the subject matter of each complaint No.1 Le. 'Silree Haj Trch'els 5( Tours Ltd.' a company r-egistered under the Companies Act was impleaded as accused No.1 and petitioners 2 to 7 were impleaded as co-accused on tile alleg1ation that as they were inc:harge of the day to cllav affairs of the company and hence were vicariously liable for the defaults of the company. The cornplaint was filed the Court of Additional Chief M n 1\!JacJ!str-ate (hereinafter referred to as the Cri.i\1.C.I\io.1056/201l IS: connecced rnattPt·s -- ; \ 'ACMM'} New Delhi, inter-alia, ,e;rve ng that the respondent company and the accused No.1 company had entered intc 2 agreements in tenlls whereof the accused No.1 compa had issued 45 cheques drawn on State Bank of . Mumbai Branch, in favour of the respondent company, which cheques when presented For encashrnent by the respondent con'l,pany with Jts Banker 100 Bank New Delhi, vyere dishonoured and upon the cheques being returned the respondent company iss.uf..::d notices contelTip.1ate:d under proviso (b) to Section 138 Nl /-l1ct from Delhi to the accusEd No.1 company which failed to make payment in respect of the sum for which the cheques vvere drawn within 15 days of the receipt of the said n ces. VVith respect to the jurisdiction of the Courts at Delhi : 1t \Nas pleaded that for the reason the respondent company had presented the cheques in question for collection with its banker Bank situateq in Delhi, the Court had the necessary jurisdiction.

¶2may be noted at the outset at after the complaints were filed, tile respondent cornpany filed a suit bearin;J No.SS0/2010 in which petitioner was as th·::: defendant before the High Court of Bombay praying for a decree to be passed in the sum for 'Nhich the 45 cheques forming subject--rTi1atter of the aforesaid ·complaints were issued. tile plaint jurisdiction of the Courts at JV!umbai vvas pleaded on the averment that the agreement pursuant whereto tile cheques were issued was executed at f\/fumbai as also that the cheques in question were drawn and issued at MumbaL Cr!.IVI.C.I,io.1056/2011 8, cor·,neueC: matte!-s Page 7ofT? '-;! --.! -,! \

¶3Taking cognizance of the complaints, learned ACMM sumrr.cnecJ the petitioners to face trial for an offen.ce punishable under Section 138 of e 1\l.L Act.

¶4Upon service of the summons, the petitioners filed application(s) under Section 1 T7 Cr.P.C. inter-alia stating that the courts at Delhi have no jurisdiction to take cognizance of complaints· and prayed that · complaints be returned to tile respondent to be filed in the court of competent jurisdiction. Together with the application(s), 2 to 7 filed appiication(s) seeking exemption for personal appear·ance before Cour{. Dismissing application(s) ::;eeking exemption frorn personal appearance and keeping pending, fer consideration, application(s) filed under Section 177 Cr.P.C. vide order dated

25.05.2010 e learned ACMM issued bailable warrants agamst petitioners 2 to 7.

¶5Aggrieved by the order

25.05.2010, petitioners 2 to 7 filed petition(s) under Section 482 Cr.P.C::. before this Court, which petitions were dismissed vide order dated

23.09.2010. thereto, petitioners filed petition:; seeking Special Leave to Appeal before the Supreme which wer-e disposed of vide orc:er dated 14.1.2011 with a direction to the learned t1,CMM that applications filed unde:- Section 177 Cr.P.C. would be disposed of within 2 weeks.

¶6Vide ol-der dated 14 02.2011 learned ACMNl dismissed the app!ication(s) under Section 177 Cr.P.C. filed by the petitioners on the ground tJ;at In view of the dicturr; ! of law laid down by the Suprerne Court in the decision Cr!.M.C.No.1056/20ll & connected mattt:;·s \ ll reported as (2004) 7 SCC 338 Prasad v Roop Lilf linda! once the Magistrate has taken cognizance of 3 complaint he has no power to 1retu1T1 the same to th.2 con1plainant with a direction tllat the same be filed in a court of competent jurisdiction.

¶7Aggrieved by the order dated 14.02.2011 passed the learned ACI\/lM, tile petitioners have filed the above-captioned petition(s) under Section 4B2 Cr.P.C. requiring this Court to hold that courts at Delhi have no to take cognizance of the COITlplaints in question and seek directions to the learned to return the same for before the Court of Competent Jurisdiction.

¶8It is the case of the petitioners that the cheques 1r1 question were drawn at, Murnbai. The drawee bank is a:· Mumbai, notice issued by the n:::s:ponolent to the petitione,'- company was received at Mumbai and thus merely because the respondent posted the notice from and deposited cheque with its bank at Delhi would not confer· ju:·isdiction on Courts in Delhi ..

¶9Tile issue has to be debate,j Nitll re·ference to Section 138 of the Nl Act and the applicable provisions of the CodE! of Criminal Procedure i.e. Sections 177, JL 78 and 179 of the Code of Criminal Procedure.

¶10decision reported as 1999

(7) sec 510 !(Bhaskaran Vs, Sha:nl;_aran_ 1/a_fQjh.van Balan & Supt-eme Court has opined, afte,- considering to Section 179 of the Code of Procedure, that an Cri.IVI.C.!\Jo.1056/2011 Px connec.t·?d matters Page 9 of 2./'. -,! offence may be completed in different localities and thus can be triecl in any Court jurisdiction over said localities. To put rt pithily, iin relabon to territorial jurisdiction, qua an offence, lavv recognizes more than 1 court having territorial jurisdiction and the issue of territoria jurisdiction would have to be decided INith reference tc whether a part of an offence vv;::.Js committed within the'. territorial jurisdiction of a court. The issue is no longer res integra and r just need to note the decision of the 5upreme 1 Court in. KBhaskaran's case (supra) and hiQlhlight that .the· aforesaid is to be cuiled out fron1 paras 11 and 1:2 of;the said decision.

¶11The next logical question \Mould be, what are the contours of Section 138 of the Nl pertaining to acts to be; performed in relation to an offence contemplated by the said Section? hardly be re-emphasized that it are acts of! cotTlmission or omission w!l!ch constitute offences, with or: without the requisite ITlens rea, depending upon 'Nhether the offence i5 an absolute offence or not.

¶12Let me thus note Section 13B, Tlrll 1-\ct which reads \Nhere any cheque drawn by a person on 2.n account maintained by him a banker. for payment of any amount of to another person from out of that account for dischar9e, in whole or in part, of any debt or other liability, is returned by the bank either because of the arnount of .rnoney standing . to tile credit of that account is insuffident to l1onour the chec::ue or that it exceeds the arnount to be paid frorn that account by an , Crl.iVI.C.No.1056/2.011 8t connected matters agreement made with that bank, such per-son shall be deemed to have cor-rnnitted an offence and shall witilout prejucHr(:e to any other provisions of· this Act, be punished vv!lth imprisonment for a term which may extend to two year, or with fine which rnay extend to twice the amount of the cheque, or with both: 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-Induce course of trte cheque,, as the case may loe,, rnakes a demand for the payment of the said amount of money by giving C!1 notice, in writing, to the drawer, of the cheque, within thirty days of the receipt of information by him from the bank return of the cheques as unpaid, and

(c) The drawer of such cheque ils to make the payment of the said amoL!IyL of money to the payee or, as the case ITlay be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice, · Explanation: For the purpose of this section. "debt or other liabiHty" rneans a legaiiy _ enforceable debt or other ret

¶13In Bhaskaran's case (supra) the Supreme Court had an occasion to deal with the issue of jurisdiction in relation to Section 1.38 of the N! and of necessity, the discussion required the Supreme Court to .various acts of commission and OIT:issknv whkh constituted the offence punishable under Section 138 of the t\ct and suffice \Nould it be to high!igi1t U1at in para 14 of the · Cri.IVI.C.No.1056/20ll & connected n:alte:-s Page 11 ofn ! ! decision, th(::> Supreme Court that there are : acts which are the components of the offence punishable under Section 138 of the Nl Act and i re-produce tile same from para liJ; oF the decision of the Supreme Court. They read as under:-

(i) drawinq 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 arnount . '

(v) failure of the dr-avver to make payment within 15 days. of the receipt of the notice.

¶14After holding tl1at acts wouid constitute components of an offence under Section 138 of the 1\JI Act, in paras 15 and 16 the Supl-eme Coui-t observed as under:- "15. It is not necessary that aH 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 diffel-ent !ocaHties. But a concatenation of all the above e is a sine qua non for the cornpietion of the offence under Section 138 of tile Code.. In this context a reference to Section 178( d) of the Code is useful. . It is extracted below:

¶16Thus it is clear, if the five different acts were done in different locaiitif:s any one of the coul-ts exet-cising jurisdiction in one of the five local areas can becorne the place of trial for the offence under Section 138 of tile A.ct. In other words, the :ornpiainant can any cne of Cri.M.C.No.1056/201l &. connected matters Page 12 cf Z7 -·-.-! ,_ ; l 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 amplitude stands so widened and so it is· an idle exercise to raise j urisd ictiona I question reg a 1 ding offence under Section of the Act." (En7phasis Supplied)

¶15On the issue of service of notice required to be given by the complainant to tile acctJ:sed, the Supreme Court obser\;ed as under:- "17. The more impor-tant point to be decided in this case is whether the cause of action bas arisen at all as notice sent by complainant to the accused Vv'as returned ,as "unclaimed';. The conditions pe(taining to the notice to be given to the drawer, have been formulated and incorporated in clauses (b) to {c) of the proviso to Section 138 of the Act. The said cia uses ar-e extracted below::

¶18On the part of the payee he has to make a demand by lfgiving a in writing. that was only requirement to complete offence on the failure of the drawer to pay the cheque amount within 15 days from the date of such "tgiving ; of the prosecution would have been very mucll lessened. But the legislature says that failure on the part of the drawer to pay the amount should be within 15 days the receiptrr of the said notice. is, clea1-that "giving notice" in the context is not the same as receipt of notice. Giving is a process of vvhicl1 receipt is the accomplisilment. It is fo( tile payee to perform the former process by the notice to the drawer at t!le correct address .. Crl.rvl.C.I\Io.1056/2011 6t connected matters Page n of27 --;! ---.!

¶20If a strict interpretatior'! is given that the drawer should have actually received the for the period of 15 days to start running n.o matter that the payee sent the notice on the correct address, a trickster cheque drawer get the premium to avoid receiving the nobce by different strategies and he could escape ·from the legal consequences of Section 138 of the ,Act .. it must be borne in mind that e court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that wou!d defeat the very legislative measrure.

¶21.... The context envisaged in Section 1.38 of the Act invites a liberal interpl-etation for the person who has the statuto1-y ololigJation to give notice because he is presumed to be the loser in the transaction and it is for his interest the very pr-ovision is made by the The words in clause (b) of the proviso to Section 138 of the Act sllow that the payee has the statutory obligation to "make a demancl" IJy giving notice. The thrust 1n the clause is on the need to "make a demand". is only the nnode for making such demand which the legislature has prescribed. A payee can send the notice doing his part for giving the notice. Once it is despatched his part is over and the next depends on \flthatthe sendee does.

¶22It is wei! settled that a notice refused to be, accepted by the addressee can be presumed to have been served on him (vide 1-larcharan Singh v. Shlvrani2 and jagdish Singh v. 1\/atthu · 23. \=he not-ice is returned as und.aimed and not as rrefused. V\fili there any sigrdficant difference between tvvo so far as the presumption of service is concerned? In tt1is Cr!.IVI.C.I\Io.1056/20111St connected matters Page :14 of Z7' ! -.-! connection a refer-ence to Srcc:tion 27 of the General Clauses i\ct will be useful. The section reads thus:

¶24No doubt Section 138 of the A,ct does not require that the notice should be given only by "post". Nonetheless the princ;ple in Section 27 (quoted above) can profitably be importr=d in a case where sender has despatched the notice by post vvith the correct address written on it. Then it can loe deemed to have been served on the sendee unless he proves that it was not really served and that r.1e was not r·espo:1slble for such non-service. AdlY other inter-pretation can leacl to a very tenuous position as the drawer of the cheque vvho is liable to pay the amount would resort to the strategy of subterfuge by successfuHy avoiding the notice.

¶25Thus, vvhen a notice is returned by the sendee as undaimed sucl-! dcr1te v\roru!d b's the cornmencin,g date in reckoning the periocl of 15 days conternplatecl in clause (c) to the proviso of Section 138 of the Act. Of coUI-se such reckoning would be without prejudice to the right of the drawer of the cheque to show that he had no knowledge that the notice vvas brought to his address. In the present case the accused not even attempt to discllarge ,the burden to rebut pr-esumption." (Etnphasls Supplied)

¶16The expressions: }Jres-entatlon of the cheq'W? to the Bank/ and 'it the five differerfi .. acts were clone in tlvf;. different /o(;alities a.ny one of the courts exercising jurisdiction lr7 one of tl7e five local areas can becotne the o/ace ot trial Jv,- the under Section 138 ol the _,4ct' to· . . f0 1 !"'·c··l ·llrl l ,1 ""'lC·' }K:: ;i.., , ...._ i 1 , C. J c:;i J O.l .. J .. \_) 1 •.=:._ :: .... ·- ... L 11 '--1 j r,! !,:-/ ... case (supra) have been understood loj many to rr1ean that C:!.M.C.I\Io.1056/20L 15, conr-·c:cteli P;:!ge 15 of 27 ---.-! -;! 1/ the Court within local limits of vv!lich e payee Bank i.e. th':> Bank vvhere l:he complainant deposited c!-leque i:; situated has the jurisdiction to try the complaint unde-Section 138 of the 1\H Act, and th2 appears to be fortified by the observations of the Supreme Court in paras 15 and 16 that if the 5 acts as the ingredient of an offence under Section 138 of the N! ,L\ct were done in 5 different localities, any one of the court exercising jurisdiction in any one the 5 areas \Nvuld have jurisdiction.

¶17But it is appa1·ent that the cbservatiqns in para 15 and 16 are an obiter as it 1s not 5 places where the 5 acts constituting an offence under Section 138 of the A.ct can possibly be performed The acts can be performed, as . would be explained hereinafter .. on1ly at 4 places and would immediately state that act No.2 and act No.3 relate to only one place i.e. the place where the dravvee bank is located.

¶18The second and the tl1ird act of the 5 listed by the Supreme Court, as constituting 12 offence under Section 138 of the f\11 A.ct are: (a) presentation of the cheque to the bank; and (b) returning the chequr::> unpaid by the drawee bank.

¶19The third act is the return of tile cheque by the drawee bank and thus there is no scope for any angument as to which bank is contemplated V\dth r-eference to the said act. The second act pertains to the act of presentation of cheque to the ba ntl<. I llig h light t!-H:? twin vvords used are, l the bank. Cri.M.C.No.1056/20111St connected IT·atters --;!

¶20lin the decision n2ported as 2001 (3) SCC 609 Shri lshar Allov Steels Ltd. Vs. /avaswals Neco Ltd., a 3 Judge Bench of the Supreme Court, !laving as a member of the Bench the author of the judgment in Bhaskaran's case (supra), dealt with and decided as to vvhat would be meant by 'the bank' as mentioned in Section 138 of e N! Act. \/\las it the drawee bank or the payee bank? The Supreme Court answe the question in the following words:- u2.

(a) V\/hat is rneant by, ''the bank" as mentioned in clause (a) of the proviso to Section 138 of the Negotiable !Instruments Act, 18817

(b) Does such bank mean the bank of the drawer of the cheque or the payee of the cheque?

(c) To whicll bank the cheque is to be presented for [Q_!J_Cposes oiF attractinq penal provisions of Section 138 of the .Act? l are the questions to be determined by this Court in this appeal.

¶7has el'" tc, noticec at to rnake an offence _under Section 138 of the Act, it is mandatory that the cheque is 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. ls the cheque drawn which has to be presented to "the bank" within the period specified therein. When a post-dated cheque is written or drawn, It is only a bill of exchangJe. The post-dated cheque become a cheque under the Act on the elate which is written on the said cheque ancl the six months' Cri.M.Cf\lo.1055/2011 81 connected m.'ltte!'S i I periocl has to be reckoned, for the purposes of Section 138 of the Act, frorn the said date.

¶8Section 138 provides that vvhere any cheque drawn by a person on an account maintained by !lim with a "banket" for payment of any amount of money to another person from out of that account for the discharge, vvhole 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 cred ·::: of that account is insufficient to honour the cheque or that it exceeds the amount arrarnged to be paid from that account by an agreem(2nt made that bank, such person shall be deemed to have commiitted an offence punishable vvith imprisonr11ent as prescribed tl1erein subject to the conditions mentioned in clauses (a), (b) and

(c) of the p!'Oviso. Section 3 ol the Act defines tile "bankef' to include any. person acting a:s a banker and any post office savings bank. Sectfon 72 of the Act provides that a cheque must, in or-der to charge the dr-awer',, be pr-esented at the bank upon vvhich it is d!-awn befOI'E' the relations between the d 1-awer and his banker has been altered to the pl-ejudice of the drawer.

¶9The use of the \Nords "a bank'' and "the bank" in the section is an indicator of the intention of The former is an indirect (siC indefinite) article and the is prefixed by a direct (sic definite) artide. legJislature intended to have the same meanings for "a bank" and "the bank", there:: was no cause or occasion for mentioning] it distinctly and differently by using two different artides. It is worth noticing t!lat the word "!Janker'' in Section 3 of the Act is prefixed by the indefinite article "a" and the word "bank" where the cheque is intended to be presented under Section 138 is prefixecl by the definite a clle !·'the". The sarne section permits a person to is::.ue a cheque on an account maintained by hirn with "a bank" and Crl.l\I!.C.i\Jo.1056/2011 8t matters ! ! --: makes him liable for crinninal prosecution if it is returned by "the bank" unpaid. The payment of cheque is contemplated by "the bank" meaning thereby wl1ere the person issuing1 the cheque has an account. "The" is the worol used before nouns, with a specifying or particularising effect as opposed to indefinite or generansing for-ce of "a" or Han", determines what particular thing is meant; that is, what particular thing we are to assume to be meant. ''The" is always mentioned to denote a particular thing 01-a person. "T!le'' would, therefore, refer implicitly to a specified bank and not any bank. "The bank" referred to in clause

(a) to the proviso to Section 138 of the Act wouid mean the drawee bank on which the cheque is drawn and not all banks where the cheque is presented for collection including tile bank of tl1e payee, in whose favour the cheque is issued.

¶10It, however/ does not mean that the cheque is always to be presented to H1e drawer's bank on whiicll the cheque is issued. The payee of the cheque has the option to tl1e cheque in any bc:mk i.ncluding the collecting bank where he has his account but to attract the criminal liability of the 'drawer of the cheque such collecting bank is obliged to _JQresent the cheque in the drawee or pavee i?ank on which cheque is drawn within the period of six months from the date on whicll it is shovvn to have been issued ........ The non-presentatjon of tl1e cheque to the drawee bank within the period specified in the section would absolve the person issuing the cheque of his criminal liabHit)r under Section 138 of the Act who shall otherwise may be to pay the cheque amount to the payee in a civil action initiated under lavv. A combined of Sections 3, 72 and 138 of the 1-'\ct would leave no doubt in our mind that the law - - mandates the c_b_eou:e_ to _.b1;:_Qresented at the bank on which it is drawn if the dl-awer is to be held criminally I ia ble. Such presentation is (1-I.M.C.No 1056/2011 & connected matters Page I9 c;f :n --.- 1/' to be made within six months at_ the bank on which the cheq_11e drawn whether presented_pei-sonally or through another namely, collecting of the QQ_yee.11 (Emphasis Supplied)

¶21the decision in lshar A//oJ/s case (supra) has been rendered in the context of limitation for presentaticn of a cheque, the said decision brings out in no uncerta n terms that Section 138 of the P1ct contemplates that a cheque is required to be prese for encashment to the drawee Bank and that the payee Bank, merely acts as an agent of the payee/complainant for of presenting the cheque in quesbon encashmernt to the dl-awee Bank. I.-) L.L. Thus, the 2nd act to which the Court referre,.J to in Bhaskarar/s case as one of t!'1e 5 which constitutes the offence under Section of Ule N! Act was th·= presentation of the cheque e drawee bank an:] neediess to state the 3'd act whiiU1 constitutes an of tile offence is the return of e r:=heque unpa1d by drawee bank and thus it becomes cr'y'Stal clear that the :zr) and 3 1-d act constituting the offence vvouid relate to only one olace i.e. tl--:1e o!ace ':!ii!lere the drawee bank is located. J j

¶23These are my humble feasons to hold that observations in paras 15 and 16 ilave to be read as an orbiter-and thus the 5 acts conten"IJ)Iated as constituting the offence are of being performed not in 5 but only in 4 places and since deposit of f:: cheque vvith the pa_y'ee bank is not an act conten·1piated as an ingredient of the offence, the place whe:-e the payee bank located vvould be CrUVi.C.i\lo.1G56/201:i 8, :::age 20 c:i' :z:;' .. irrelevant for pic.Jrpose::-; of determining jurisdiction of the criminal court.

¶24It is settled law that a decision is an auUwrity for the point it decides and not what can be logically deduce.) therefrom and the ratio of a decision has to be gathered with to the facts of a case i31nd highlight only one decision of the Supreme Court the decision reported as Dhodha Hou::;e v SJ( 9 SCC 41.

¶25The matter regarding jurisdiction can also be decided 'Nith reference to Section 6, Section 7, on 64 and Section 72 of the N! ,Cl,ct.

¶26The relevant portion of. Section 6, Section 7 and Section 64 of a•·,d Section 72 of the Nl t\ct reads as ·under:-- Section 6. Clleque: - A "cheque" is a biH of exchange drawn on a specified banker· and not expressed to be otherwise than on demand a1l1d it mciudes the electronic image of a truncated checue and a cheque in the electronic for·m. )( • f )\ )( Section 7. The maker of a bill of exchange or Cl--eqU"" :5 r::olleri j-he .. 1 I '- l c, _, _ v. u ell -· , L u ·-' ·" ' tlle reb'·r ·i-·"J p:::;y· 1'c "r)ra\1\lPe" ') .. '-'· ,_;\...du,_ I ,,___ )( )( )( Section

¶64Presentrnent for payment.

(l)]Promissory notes, of exchange and cheques rnust be presented for payment to the maker, acceptor or drawee respe(:tively, by or on behalf of the holder as hereinafter In clefauit of suc!-11 presentrnent, Crl.!VI.C.i\io.1056/2011 8, co:-•,v:'cteci rnz1Hers Pagc.· .Zl of 2? -;! - .-! other parties thereto are not Hable thereon to such holder ....... . X )( )( Section 72. Subject ,e provisions of section 84 a cheque must ir-:1 order-to charge the drawer, be presented at tlhe bank upon which it is drawn before the relation lbetvveen the drawer and his banker has been to the prejudice of the drawer.

¶27A co-joint reading of Sections, 6, 7, 64 and 72 as of Section 138 of the Nl Act b(ings out that in order to attract penal provisions of Section 138 of e Act a cheque is required to be prese1-1ted for encashment to the drawee Bank and that the payee Bank acts mel-eiy as an agent of the payee/complainant for the purposes of presenting the cheque in question to the d!-avvee Bank. Tl11e cor-ollary thereof is that no pa of cause of action for the offence punishable under Section 138 of the Nl Act arises ir.i the Cour-t within the local llmits of vvhlch the coHectiing Bank: of the i.e. payee Bank is situated and thus saici Court has no jurisdiction to try .a con'lplaint under Sectior-. 138 of the 1\11 Act filed by the COIT11plainant.

¶28This takes me to the considETabon of second questior: involved in the present case i.e .. whether tile court within local liimits of which place from where complainant had sent a notice under provisc

(b) appended to Section 138 of tile Act is situated has the jurisdiction to try a complaint filed under Section 138 of the Nl Act. Cri.IVLC.i\lo.1056/20H g,_ rnattcor:, ?age 22 of27

¶29I, have already noted the observations made by the Supreme Court in Bhaskaran's case (supra) in the fo,-egoin:g ' ' paras and would highlight that in paras 17 to 23 th•2 Supreme Court has reflected upon the Hmitation within wl1icl1 the notice has to be given to the accused. The Supreme Court was considerin9 the expression 'giving a notice' in proviso

(b) to Section 138 of the 1\H P1ct, with reference to the 15 days' time contemplated tr'.1en by which the requisite notice had to be serv12d, which time is now 3C days.

¶30Another decision of the Supreme Court, reported as

(2009) 1 SC:C 720 Hannan Electronics Privat.e Limited National Panasonic Inola Private L/lnited is worth noting on the subject.

¶31In Hannan's case (supra) the question which had. arisen before the Supreme Court was precisely t!1e same ,question which arises for consicller-atlon in the present:, petition i.e. vvhether tile court within! the local limits of which, the place from where the comp!a1i!'1ant l1ad sent a notice contemplated under pmviso (b) to Section 138 of the Ni Act is situated has tl1e jurisdiction to try a complaint filed under . Section 138 of tl:e Act. the aforesaid question in tile negative, the Supreme Court observed as under:- "12 ...... The only question, tl1erefore, vvi1id1 arises for consider-ation is at as to whether sending of notice from Delhi l1tseif would give rise to a cause of action for taking cognizance under the Negotiable Instruments J\ct. o·UVJ.C.No.1056/2011 g( -.:::onnected matters --. 13, lt is one thing to say that sending of a notice is one of the ing1reo1ients for the complaint but it is another thing to say that dishonour of a cheque by itself constitutes an offence, For the pur-pose of proving its case that the accused had committed an offence under Section 138 of the Negotiable Act, ingredients thereof are required to be proved. VVhat would constitute an offence is stated l11 main provision. The proviso appended thereto, however, imposes certain further conditions vvhich are required to be fulfilled before cognizance of the offence can be taken. If the ingredients for constitution of the offence laid down in provisos

(a), (by and (c) appended to Section 13B of the Negotiable Instruments Act are intended to be applied in favour of the accused, cannot be any doubt that receipt of a notice woulld rultimately rise to the cause of action for filing a complaint. As it is only on receipt of the noUce that the accused. at his own peri! may refuse to pay the amount. Cia uses (b) a ncl (c) of t!le proviso to Section 138 tllereifore must be read together. of notice would not bv itself 9jve rise to a cause of action but communication of the notice would . . .. .. . . For constitution of an offence under Section 138 of the Act, tl'le notice rnust be received by the accused. may be deemed to have been 1-eceived in certain s ations. The vvorcl "communicate'' inter aiL::l rneans "to make known, inforn1, convey, etc".

¶20. .... t-\ court derives a jurisdiction only when· the cause of action arose its jurisdiction. The same cannot be conferred by any act: of omission or commission on the ·part of the accused.

16... distinction must also be borne in mind between the ingredie an offence and commission of a part e offence.. issuance of a notice b_y tile holder of a Cri.M.CNo.1056/2011 ,St connected matters Page 24 of V '-;! instrun'lent is necessar'{,__s_enlllce thereof is also imperative. Only on a servirce of such notice and failure on the part of the accused to pay the demanded amount vvithin a rperiod of 15 days thereafter, the · commission of an offence completes. 0iviPq of therefore,. cannot have anv precedent over tile service. is oniy from that view of the matter that in Daln?ia Ce;nent (Bharat) Ltd v. Galaxy Tr:2ders & Agencies Ltd emphasis has been laid on service of notice." (Ernphasis Supplied)

¶32/l\t a first io!usl-i re0din9 of tile c:lecisions of the Supreme t . 11/ r d ' ' ' ,. ' · " l ''l r r-y-/C:r/ar··rr· r-:,cpc I'(' .... I I .!.=.:_.: • t _ , L , ) /,'-t·, 1 ._)· \...... C·l ._1 .... _ .... J c" I r......-1 1 L • I a strike to the reader that there is a confliict betiNeen the tnm decisions inasmuch as in 8/]ask{Jran's case (supra) it was held that tile expl-ession 'giving of not/ce' occurTing in proviso (b) to Section 138 of the i\111 Act means 'sending of notice·' whereas in Hannan's (s.upra) it ·was held that the said expression means

¶33A careful 1-eadfng of the tvvo decisions shows that thete is no confHct betvveen the said decisions inasmuch as they !<ave IJeen r-endered in different contexts. The decision in Bhask.flfan'.s case (supra) was rendered. in the context Jf stal-ting point of llrr:itation period of 15 days prescrlbed in proviso (b) to Section 13.8 of the 1\H and it was in tllat context i.e. context of limitation that it was held by the S:Jprerne Court that exp1-ession giving of notice·' occunring in proviso (b) to Sectiont 138 of the Act n;eans 'sending or T!le decision Hannan's case (supra) vvas rendered in the context of cause of action for fiiir19 a complaint under Sectlo.n 138 l}1ct jurisolic:tlon of a f" !"'" L. L d co u 3 r' c: i n 1-·h;::,t ro t l.! ' ......... ,.. Cr!.IVi C.No.1056/21lH 8.t conr,::c-::ed matters was - ;-.,, Cl ij t:: ·' ")} ;.I 't, Page :Z5 of ?7 -: "'\ Supreme Court that tile expression g'/vlng or not'fce ( occurring in provtso (b) to 138 of the Nl }) .. ct means 'receipt ol

¶34Now, sarne expr-ession can have different iii different context as held b)/ the Supreme Court in the decision reported as Malik La! lj1iJjutndar v C.handra Dev (2004) 1.2 SCC 8 wherein it was observed i that a word occurri:-:g i;·1 a 5.tatutory provision can have different mean i nQJs in d lff'er-ent coil text within the same statute.

¶35Thus, the inevitable conclusion would be that the 4th act contemplated as an ingredient of the offence .as highlightecl in Bl7aska_ran's case ii.e. 'giving notice in writf;7g to the drawer ol cheque' den7anci/ng pay;nent of tt;e cheque an?ount for purposes of limitation would have a meaning as explained in Bhaskaran's case anol for purposes of jurisdiction would have a rneaninQJ as explained in !shar Al/oJ(.S case (supra),

¶36Before concluding I De failing not to lodge a caveat. With electronic bankin!Q and facility at of clearance provided by bankers and . 11 especra ,y :n metropolitan cities, vv\lere cheqt,!es are clearecl by not being presented to the dravvee bank but at nodai br21nches of the concerned banks, tile subject nnatter of may have to be decided keeping in vi:evv that the drawee bank has created an a-gency where tl:le cheque in question lS transmitted r clear-ance and e s s wher·'=.' the tal<es place would then cl!-·guaf::ly become the pLace er·i 8t conrected matters Page 20 of 2.7 -; r• ,,, lji' sf ( i•. '11 : .J_, \['> !n_! l•i l)41 11/ the cheque woulcl be required to be treated as presented to bank' Le. the bank. But, in such circumstam=es, properly constituted pleadings have to be found in a complaint and lodging the caveat, i leave it at that for 1the debate to be properly argued in an appropriate case vrlth the necessary relevant pleadhlQJS.

¶37i hold tl1at on the pleadings in the complaint(s),: no part of cause of action can be said to have accrued to the cor!!plainant at Delhi; that the notice demanding payment vlfas posted rn Deihl and U1at e cheque vvas with the payee bank at Delhi ·would not constitute the acts contemplated as ingredients of an offence punishable under Section Act and thus i dispose of the petitions I quashing theimpugned order(s) dated 14.2.2011 and dit,ect learned to return complaint(s) to ·=he respondents for filing in a Court !laving territo;-ial jurisdiction,

38.. No costs. SlEPTlEMlBIER 21, 2011 mnn Cri.M.C.No.1056/2011 & connected mattel-s -. .... NANDHAJOG) JUDGlE Page Z7 cf 27 ---!

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment reserved on: lfJh September, 2011 Judgment pronounced on: 21st September, 2011 + CRLM.C. 1166J2011 SHREE RAJ TRAVELS & TOURS LTD. & ORS. . .... Petitioners Through: Mr.Sunil Gupta, Sr.Advocate with Mr.Jatin Zaveri, Mr.Gaurav Agarwal and Mr.Tanmaya Agarwal, Advocates versus DESTINATION OF THE WORLD (SUBCONTINENT) PRIVATE LTD. .. ... Respondent Through: Mr.Anindya Malhotra, Advocate CORAM: HON.BLE MR. JUSTICE PRADEEP NANDRAJOG 27. Whether the Reporters of local papers may be allowed to see the judgment? 28. To be referred to Reporter or not? 3. Whether the judgment should be reported in the Digest?