Shree Rajtravels & 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 l (PRADEEP JUDGE ,c; 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. :f.: o;0 + ( H<vl THe . OF- [ !i\il re ____ Z .. 1-' ' rr·· '··_;, ,--, {- - '1 . ''" .---- --: _.-. '- " -; IV st C"' 1 ;-..:... :::J o'"T) { --- -· ; 0 Ll c&_:_,_:_';_!__:' ;_ [)I 017 u CL, J r:: (./' J • L JL . ,_! E 1,)' L. L 1 17 /,__l.:_t:_'!_ _ r ffr:; IF·/"" n -,11 )•r "-lV _; .. cL r H n E R ' ' . LS r I JT' ,-- I :J n c \!-\; V .= ', 1 1r1,.') !L &1 ;:.:;ug!l: Petitioner'; Mr.SunH Gupta, Sr·.l:\dvocat::: witll [VIIr.Jartln Za\/eri,. Mr.Gaura'v :-v,,' a l ;:,, 'ld M r.Ta n v(iOJ\/2 ''-g'- --!\,--.' \'·•ca+-p.s /--\ C1 i \ i 0.1 i r •1 '1',-./ C l_ "--· \tersrc./5 OESTiNtJ r-r,. ''"'-'"' c , 1 1 '1 , 1 , J .c.:_ V 1, U r\ PP.lV;lTE \:) (''l r ,; "" •"" j \ ;::._] !'._. '- . .._,'-I !\/1 r _/:,, n i 1·1 d \fa !\Iii a! ri otro:. nc a T'l;t--,' "'"lh' li : ! ' \' I_)_ :.J. ' ..- ' r-o 'l r 11 J fi n ,, .. . .,\ Jl)L c:. '-1 R E F P-A ' J E! c -ro I I c I -:- n _, I , _ ·-- . \. .j . ·--' (y li _) - . iU . Eo, OR.S. ., .. PeEtic''l21S · cJ \- C:, ii r i , ,- n rl /.:.:_, ·. / .r-· l-E"" ' • ·-· ._, '- ...... : -..! " _j \.) I-I .••• L ·'t'---. ,.r n"7 ( 'fq-_ .. ,.,---, V\1 I _I ' : • J " La\ en , v" 1 . :-1 (_, , d v 1\ -•' . -,I -- n 'J'V1 T- , v;r " - 11\tolt c'iti(J nr. cl\!,.dCJVc': /-\ga l-\dVC'Cates versus DESTIN/\ Of\] :::;tF THE V\/0 D ( s ru I' f'l r· -- l\ :--: \ p pI\ I/\ TE' 'L j•.) c•·--Ol("f.;l r,jP \' · U ·u·c\! I ,1/,;[_J\: I .• 0 d I, !-'II ;_ ., .. , .1\•:.. . ..::>1 '-''I,·- T!-JJC.>UQI'L :. i,r,dya Aclvccate I"P.lll/1 c 1'1 -ri''Lf'lrr'l}-11 1L\UI .. 'l_ c H n. E E n 1\ ' ·. 'r-l ,r- & -r 11 ,., r-I -e-·o .J rh r,,-1j ,:!:::._::J _ l.ulr'.:J· Ll ', ...... Petitioners S{ ORS. -rl- ,--.-,_ .. . I .. _._, . 1', /l - C · ' . I c-t -, :::' r I' j, 'r · :::c; ' -" l"d ,JI .. I fJ o, ._Ia vvitt• r·. atiil Zaven,. .3\/ 1'-1_ g 3 nN a li a n d r. 11 rn cl i ?, Ag a i-vv c 1, c:J v o cates C:-U/1 C S.. C:Cili<•.CCLG n12t'LE-1', t:: j 7: \ierSLiS DESTINA,TIOI\J F THE \NOR:_D (SUBCONTINEI\JT) PRIVATE ..... Respondent Through: Mr.f}dlindya Malhotra, Advocate CRLM.C 117212011 SHREE TRAVELS E)( TOU LTD. & ORS. Thmugh: .. ... Petitioners Mr.SunH Gupta, Sr.Advocate with Zaveri, Mr.Gaurav Agarvvai and M r.Tanrnaya l.\ga rwa i, A.dvocates versus or.:: THE PRIVATE LTD. . .... Respondent rough: M1r.Aninr::!ya Malhotra, /\dvocate CRLM.C. SHP,EE RAJ TRJ'\VELS & LTD. 5,( ORS. .. ... Petitioners Througll: 1\!lr.SunH Gupta, Sr.Advocate with Mr,Jatin Zaveri,, Mr.Gaurav Agarwal and Mr.Tanmaya Aga rwadl Advocates versus DESTINA,TION OF THE \/\/ORLD (SUBCONTir1JENT) PRiVATE L ..... Respondent ThrOLJgh: Malhotra, Advocate CRLM.C ll"Jl:J/2011 SHREE Rf},j TRAVELS & TOU & ORS. .. .... Petiti,oners Throt:gh: Mr.Sunil Gi..Jpta, Sr.i\dlvocate with n Zaveri, Mr.Gaurav f},garwal and Mr.Tanrnaya Aga rwa I r .l\dvocates Cri.M.C.I\Io.l056/2CLL1 g, connected mcltters F'age 2 of 27 --;! versus DESTINATION F THE VlfOR.LID PRIVATE LTD. . .... Respondent Through: Mr indy.a P,dvocate CRLM.C. 1JL75/20Jll SHREE P\Aj Ex TOURS LTD. 61 ORS .. . .... Petitioners Mr.Sunfii Gupta,. Sr.Advocate with Mr . .jatin Zaveri, Mr.Gaurav Agarwal and M r.Tanmaya ·rhrough: Aga rvva L /J,dvocates versus DESTII\IAT!ON OF THE \1\/0RLD (SUBCONTiNENT) LTD. .. ... Respondent ThroLigh: Mr.Anindya Malhotra, .,1'\dvocate CRLM.C SHREE Rl\JTR?\VELS & TOURS LTD. fS1 ORS. .. ... Petitioners Through: Gupta, Sr.Advocate with Mr.jabn Zaveri, IMr.Gaurav A.garwal and Ag a rvva I, ,r:::l1olvo cates versus OF THE \1\/0RLD (SUBCOl\JTiNENT)PRIVATE LTD.. . .... Respondent Througll: Mr-.Aninclya· Malhotra, 11\dvocate «RL M C L . . . _,' SHREE P\AJ TRA\/ELS E,( TOU LTD. 61 ORS. .. ... Petiboners Through. Gupta, Sr.Advocate with M!-.jlatin Zaveri, Agarwal and Mr.Tanmaya Cri.IVJ.C.No 1056/2.011 8( con;l<:<cted matters Agarwai, ,A;dvocate.s versus DESTiNATION OF THE WO (SUBCONTINENT) PP,!Vi\TE LTD. .. ... Respondent Through: Mr.P111indya Advocate CRLM.C. 1JJ9/20ll SHREE RAJ TR.AVELS 6c LTD. 6c ORS. .. ... Petitioners Mr.Sunll Gupta, Sr.Advocate with Zaveri, Mr.(:Jaurav Agarvval and Mr.Tanmaya Agarwad, /\dvocates Thmugh: versus DESTil\IATlON OF THE \/VOR\ (SUBCONTi!NEf\J!T) PRiVATE ····" Respondent Thl-ough: Mr.Pdlindya Malhotra, JJ\olvocate CRLM.C. llB\1/2011 SHREE RAJ TR/J,\/ELS & TOURS LTD. & ORS. . .. , Petitione!'S Thmugh: Mr.SunH. Gupta, Sr.Advocate wit!l Mr.Jat.in Zaveri, Mr.Gaurav AganNal and Mr.Tanrnaya Agarvval, A.dvocates versus DESTINATION F THE WORLD (SUBCONTINEf\IT) PR!Vf1TE ..... Respondent Through: Mr.Anindya Maihotra, Advocate CRLM.C. SHHEE RAJ TPAVELS 5c TOUF\5 L TO. {), ORS. .. . , Petitioners Mr.Sunil Gupta, Sr.Advocate Through: \Nl··th , .. ''d-·(-1·1-l lr:;a,,r-a'' II I ·J .ll '--' y ,_I F " " • ... ..... \I Cl"i.M.CI\Io.l056/2011 & conl'ected matters --;! /\oanNi3Ji and Mr.Tanmava J I • ..-' Aga C /\olvocate5 versus DESTINATION OF THE \NOR (SUBC:ONTU\IEI\IT)PRIVATE LTD. . .... Respondent Mr. Malhotra, ,L\dvocate CRLM.C. JL1H60!011 SHREE FU:\1 T:=U\\/ELS &, TOU LTD. _, 5( ORS. .. ... Petitioners Gupta, SrJ-\dvocate with Mr Jatin Zaveri, Mr.Gaurav and Mr.Tanmaya AgarwaL Jl,dvocates versus DESTINATION OF THE \NORLD (SUBCONTINE PP.IVATE LTD. . .... Respondent ThrDugh: a Malhotra, Advocate CRLM.C 1181/2.011 SHREE RAJ TR,AVELS & TOUES LTD .. &( ORS. . .... Petitioners Mr.Suilili Gupta, Sr.Advocate with Zaveri, Agarwal and Mr.Tanmaya ,L\garwai, i'\dvocates , Through: versus DEST!NAT!Of\l C)F ThiE \IVORLD LTD.. .. . ., Respondent Th r-c u g !l: ndy a M a i h otra, /\dvocate -·1 'R-E n '\ ' --·p (\ ::) "1 .i \ c /-\j K -\ J-\ & OF\S. C:RLM.C 1188/2011 Tc-· " P c , . ·-c r.::L:s 6t 1 1 '"-/ - Petltione ""' -·· .... Through: Mr5urdi Gupta, Sr.P.dvocate Cri.M.C.No.10.56/2011 connected matters Page .5 of 7.7 ! :- with Mr.jlatin ZaverL r.Gaurav Agarwal and Mr.Tanmaya •" 'I !\ ,1 t Agarwal', es versu::; DESTIN!\T!ON OF THE \/VOr=tU) (SUBCOf\lT!NE D. ., ... Respondent Thr-;Jugh: Mr indya Malhotra, 1-\dvocate CORAIM: HON'BlE MR. IPRft,[)[tiP' NANDRP\j)OG l. \1\!hether the geoorters of local papers may b2 ai!o\PJt;d to see the jud·gm.ent?

¶2To be refe!Ted R.eporter or not?

¶3Whether the judgment should be reported in the Digest? PRADEEP _;L _L. Briefly stated e facts leading to of the above captioned petitions ar-e that i.e. 'Destination of World (Subcontinen Pvt. Ltd.' a company registered under the Companies Act fi\ed 15 under Section 138 of the !\1 egotiabl e j nsti'JI ments Act, 1881 (llerei nafter n2ferred to as the 'r\ll Act'); 3 cheques b e subject matter of each complaint Petitioner No.1 i.e. 'Sllree Raj Tra\;c!s 6,( Tours Ltd.' a cornpany registered under the Cornpani.es Act was impleaded as accused No.1 and petitioners 2 to 7 were irnp!eaded as; co-accused on tile allegation that as Directors they were incharge of tile day to day affairs of the company and ller:ce \/Vel-e vical-iously liable for the def,auits of the company. The cornpla:nt was filed in the Court of Additional Chief l\r1etropolitan (he nafter 1-eferred to as the Cri.M.c.l\lo.l055/}0L'- •.::o''''"<C':?d rnatters Page 6 ot 27 - -! . '! - t 'ACMM') New Delhi, inter-alia, aJe ng that the cornpany and the accused No.1 connpany had entered intc 2 agr-eements in teiTns whereof the accused No.1 compa:.-Jy had issued 45 cheques dra\1\m on State Bank of incia . Mum!Jai Branch, in favour of the respondent company, which cheques when presen encashrnent by the respondent compa with its Banker iOO Bank New Delhi, were dishonoured and upon the cheques being returned the respondent company iss-ued notices under proviso (b) to Section 138 Nl m to the accusEd No.1 company vvhicil failed to illlake payment in respect of the sum for the cheques vvere drawn within 15 days of the receipt of the said n ces, \/\lith respect to the · jurisdiction of the Courts at Delhi iit '1Nas pleaded that for the reason the respondent company had presented tr,!e cheques in question for collection with banker !Bank situatej in Delhi, the Court had tile necessary

¶2may be noted at the outset at aftel-tile complaints were filed, the respondent company filed a suit bearin:;; No.SS0/2010 in which petitioner No.1 was as defendant before the High Court of Bombay praying for decree to be passed in the prinCiipai surn for which the 45 cheques forming subject--matter of tile aforesaid complaints were issued. tile plaint, jurisdiction of the Courts at IVJumbai was pleaded em the averment that the agreement pursuant whereto the were issued was executed at Munlbai as also that the cheques question were drawn and issued at MumbaL g, conrlecJeci matte1·s Page 1 of 21" t

¶3Taking cognizance of the complaints, thE· learned ACMM surnrnonecl e petitioners to face trial for an offence punishable under Section 138 of e N.L Act.

¶4Upon service of the sutTtrnons, the petitioners filed application(s) under Section 177 Cr.P.C. inter-ana stating that the courts at Delhi have no jurisdiction to take cognizance of complaints· and prayed that complaints be retu ed to the respondent to be filed in the court of competent jur-isdiction. gether with the sa1d application(s), p-etitioners 2 to 7 filed appncation(s) seeking exemption for personal appearance before Court. Dismissing application(s) · ::;eeking exemption personal appearance and keeping pending, fer consideration, application(s) filed under Section 177 Cr.P.C. vide order dated 25.05.2010 tile learned ACMM issued bailable warrants against petitioners 2 to 7.

¶5t-\ggrieved by e order ola

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

23.09.2010. i\ggrieved thereto, petitioners filed petitions seeking Special leave to Appeal before the Supreme Court which were disposed of vide order dated 14.1.2011 with a direction to the that applications filed under Section 177 Cr.P.C. vvould be disposed of within 2 weeks.

¶6Vide order dated

14.02.2011 learned dismissed the application(s) under Section 177 Cr.P .C. fiiecl by the petitioners on the ground at in view of the dictun-of law laid down by the Supreme Court in the decision Cri.M.C.No 1056/2011 &; con:··.ected Page8of2.7 y reported as (2004) 7 SCC 338 Prasad 11 Roop La/ linda! once the has ken cognizance of a complaint he llas no power return the same to th2 complainant with a direction tllat the same be filed in a court of competent jurisdiction.

¶7Aggrieved by tile order dated 14.02.2011 passed b/ tile !earned ACMM, the have filed the above-captioned petition(s) under Section 4B2 Cr.P.C. requiring this Court to hold that ccJurts at have no jurisdiction to take cognizance of the complai in question and seek directions to the learned ACMM to the same for befor-e the of Competent Jurisdiction.

¶8It is the case of the petitioners that the cheques 1n question were drawn at Murnbai. The drawee bank is a= Mumbai, notice issu.::ol by the r(2sponolent to the petitione,- company was 1-eceived at Mumbai and thus merely because the respondent posted tile notice from and depositecl · tile cheque with its bank at Delhi would not confe·· jurisdiction on Courts in Delhi.

¶9Tile issue lias trJ be debated JV to Sectior, 138 of the Nl P,ct and the applicable of the Code of Criminal l:lrocedure i.e. Sections 177, 178 ancl 179 of the Code of Criminal Procedure.

¶10in decision reported as 1999 {7') sec 510 I(Bl7askaran

115.- Shafll;_arEU}_ 1/C!J.Q_!JJ;an Balan S An1::::, the Supreme Court. has opined, afte1-considering :Sections 175: to Section 179 of the Code of Procedure, that ar: Crl.J11J.C.I\Jo.1056/2011 Px C:OI'I'PC.i·ed matters Page 9 of ! \ ' offence may be completed in d rent ,localities and thus can be tried in an Court hcving jurisdiction over said localities. 'o ir oithlv lin ;-,a!a'-ion to ter·-[t-oria 1 t-' ..... ..... t n 1 J l Li. , 1 t

1.... l jurisdiction, qc:a an ·Jffence, law recognizes more than 1 court l1avingr terr-itorial jurisdiction and the issue of territoria jurisdiction would have to be decided v1rith reference tc vvhether a part of an offence \-vas committed within thE territorial jul-isdiction of a court. The issue no ;·es integra and I just to note the decision of the 5up:-eme Court in. KBf7askara.nls case (supra) and hiQihlight that the aforesaid is to be cuiied out paras 11 and 1:2 of the said decision.

¶11The next logicc:d question \Nould be, vvhat are t!1e contour-s of Sectlor' 138 of the Nl t pertaining to acts to be perforrned in relation to an offence contemplatec! by the said Section? It hardiy be that It are acts of cotTlmission or o1·nission vvhich constitute offences, \Nith or w·ithout the requisite rnens rea, depending upon vvhether the offence is an offence or not.

¶12Let me tllus Section 13Ei, A.ct which reads as under:-\Nhere any cheque drawn f;:)jf a person on 2n account: maintained by hirn wi a banker payment of any amount of rrnoney to anotlier person frorn out of th account for in whole or in part, of any debt ot-other liability, is returned loy the bank either because of the anwu of rnoney standii-\Q . to tile credit of that account Ls insufficient to honour the cheque or that it EYceeds the arnount arranged to be paid from that account by an , CrUv'l.C.No.l056/2011 1St n1e1tters Page :w of 27 agreement rnac!e with that bank .. such person shall be deeiTJed to hav·e c:omrn,itted an offence and shall wit,lout prejudirr:e to any other provisions of this Act, be punished vvilth imprisonment for a term vvhkh may extend to two year, or wi fine which ITJay extend to tvvice the amount of e cheque, or with both: Provided that nothing contained in is section shall unless-

(a) The cheque has been pr·esented to the bank within a period of six montihs from the date on which it is drawn or within e period of its va !idity,, whichever is earlier.

(b) The payee o'- tile ho1de1· induce course of the cheque, as the case may be,, makes a demar'1d for the payment of the said amount of money by giving (!1 notice, in writing, e drawer, of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheques as unpaid, and

(c) The drawer of such cheque ils to make the payment of the said amount of money to U1e payee or, as the case may be, to the holder in due course of the cheque, vvithin fifteen days of the receipt of the said notice, · Explanation: Fo1-the purpose of this Jldelot or other means a enforceable debt or other liatdility. section. lega!ly .

¶13In B!Jaskaran's case (supra) St!pt-eme Court had an occasion to deal with tile issue of jurisdiction in relation to Section 138 of the Nl ct and of necessity, the discussion requli-ed the Supreme Court to various acts of commission and G!Ti,fssioni' whkh constituted the offence punishabl;:" under Sect on 138 of the N! 1\ct and suffice vvould 1it be to highligllt that in para 14 of the 8t connected maUer·s Page 11 of 1.7 • ! decision, the Suprerne Court il!9hHg1hted that there are acts which are the components. of e offence punishable under Section 138 of the Ni Act and 11 re-produce the same from para 14 oF the decision of the Supreme (Court. They read as under:-

(i) drawinq of the cheque,

(ii) presentation of the cheque tile bank,

(iii) returning the cl-i:=que by the drawee bank,

(iv) giving notice i r1 writing to the drawer of the cheque demanding payn1ent of tile cheque amount,

(v) failure of the dl-3\Ner to ma payment within 15 days of the receipt of tile r1otice.

¶14After holding at acts constitute components of an offence under Section 138 of the Ni Act,, in paras 15 and 16 the Supreme Court observed as under-:- /{15. it is not necessary that the above five· acts should have been perpetrated at the same locality. it is possible that eaclh of those five acts could be done at five Hties. But a concatenation of all the above five is a sine qua non fof-the con1pietion of e offence under Section 138 of tile Code, .In this context a reference to Section 178( d) of e Code is usefuL It is extracted below:

¶16Thus it is clear, lf the five different acts were done in five different localities any one of the courts exercisin,g: jw·isdiction in one of the five iocal areas can become the place of trial for tile offence Section 138 of tile Act, In other words, tile complainant can choose any one of Cri.M &. contiecced matter.o Page lZ ofZ7 -.- those courts having jurisdiction over any one of the local within the territorial limits of which any one of those five acts was done. As amplitude stands so widened and so expans;ive it is an idle ·exercise to raise jurisdictional question 1-egrarding the offence under Section of the Act.IT (En7phasis Supplied) l

¶15On the issue of service of notice required to be given by the complainant to the accu:sed,. the Supreme Court observed as under:- "17. The more important point to be dedded in this case is whether the cause of action arisen at all as notice sent by complainant to tile \Nas returned as uunclaimed". The conditions pertaining 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 clauses are extracted belovv:

¶18On tile pai-t of the payee he has to make a demand by ug,iving a notice''! in writing. that was only requirement to complete offence on the {ailure of tile drawer to pay the cheque amount within 15 clays from the date of such "1giving , of the prosecution would have been very much lessened. B tlhe legislature says that failunc:: on the part of the drawer to pay the amount should be within 15 days "of the i-ecei pt" of the said notice. it is, therefore, cl ea that "giving notice" in the context is not the same as receipt of notice. Giving is a pnJcess of vvhich receipt is the accomplisllment. It is for tile payee to perform the former process by send1ir-H::;1 the notice to the drawer at the co:Tect address. Crl.fVI.CI\Io.1056/2011 6t connected matters Page B of 2.1 ! :-! - '!

¶20If a strict is given that the drawer should have actually received the notice for the period of 15 days to start running n.o that e payee sent: the notice on the correct address .. a trickster c=if·leque drawer wou,!d get the premiunl to avoid rr2cei ng 1Che notice b)r different strategies and he could escape from the legal consequerlces of Section 138 of the .Act. !t must be borne ;n nnind that the court shou!d not adopt .an inte retation which helps a dishonest evader and clips an honest payee as that woU!d defeat the very legislative rneasure. 21 ..... The context envisag)ed in Section 138 of the Act imlites a liberal i erpl-etation r the person who has tile statutorv ololig1ation to give notice because he is presum to be the loser in the transaction and it is for his interest the provision is made by the The words in clause (b) o"' the proviso to Section 138 of the l\ct sho\N tllat ti:e payee has the statutory obligation to {[make a demand"' by g1iving notice. The thrust n the clause is on the need to Hmake a demand". it is only the nrliode for making such demand which _ e -legislature has prescribed. payee can send notice fo1r doing his part for giving the notice. Once it is despatched his part is over and the 1le;<t c!epencis on 'What sendee

¶22It is well settled that a notice refused to be accepted by the addressee can be presumed to have been served on him (vide Narcharan Singh v. Shhrrani2 and jag dish Sing/7 v. Natthu .23. rhe :·:c,hce is rn:·eol as undain11ed and not as refused. V\lill then=· any signincant: d '1ffe (':=--' h P.,_,,.rc. o r1 ti·l P c: o r .21 '· e - . ' - - \.... - L . "-- C- - ...... ! \. 1_ _, ._) ,I J,..) . presumption of is !n this l Cr!.iV!.Chto.1056/2011 81 con:-,e•:::t:·c! matters Page of 2.7 ! connection a reference Section 27 of the General Clauses i\ct will be usefuL The section reads thus:

¶24No doubt s,ection 138 of e Act does not require that the notice shoul:j be given only by "post". the pri'K.;ple incorporated in Section 27 (quoted above) can profitably be imported in a case where e sender has despatched the notice by po.st vvith the correct address vvritten on it. Then [It can be deemed to have been se:ved on e sendee unless he that it vvas not really served and that he was not (espc:lsible for such non-service. J\ny other interpretc,tion can leacl to a very ternuous position as the drawer of the cheque vvho is liable to pay the amount would to the strategy of subtet-fuge by successfuHy avoiding tile notice.

¶25Thus, vvhe!'l a notice is rned by e sendee as unc aimed sue v\fould be the commencill'Q elate in reckoning the period of 15 days conternplatec! in claus.e (c) to the proviso of Section 138 of the Act. Of course such reckoning would ibe without prejudice to the right of the drawer of the cheque to show that he had no knowledge ttlat the notice vvas brought to his address. In the oresent case the accused not even attempt to discllarge t!Te burden to rebut tl)e aforesaid p:-l=sumption.'· (Etnphasis Supplied)

¶16The expressions: fpresentatfor? o/ the cheque to the Bankf a.nd 'if the five differelJ,t acts were done in li've different loc-alities any one LJ?e courts e' '·'e c;i n a jurisdiction in one of t/7e five local areas can becotne the o/ace of"tria! i'ol-the under Section 138 ol the i4ct' to h, f I'd' 'r l ·i ·:o· I ]i= ":"'<:;1') .-·'-·· . i ., '. D' ··'c ,) E:: ' 0 ,.J (l I! l :J G . C/:.::, ·-:·+

¶0i.l 0 -- ,_) I ;::-;- ',-- e t.ll v e I y In .. ) cas:e (supra) have been understood many to rnean that E.t CDI"I'!:OCtec! n:;:.tters Page 1S of Zl --;! --! the Court within loc3l limits of vvfl:c:h e payee Bank i.e. the Bank i=he ''Jrnplainant cleposited the cheque is situated has the jurisdiction to lTy tine unde(" Section 138 of the Ni Act, nnd the tmolerstanding 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 138 of the f\H Act vve1-e clone in 5 !oca! es, any one the court exercising jurisdictiOil in any one the 5 areas V/ould have j u risdictio ll. But it is apparent that the observations in para 15 and 16 are an obiter as it Is not 5 places where the 5 acts constituting an offer-;ce under Section 138 of the Ni 1\ct can possibly be The act:; can be performed, as would be explained lv:='reinafter, onlly at 4 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, the 5 listed by the Supi-eme Court as COilStituting offence under Section 138 of the Nl Act are: (a) presentation of the cheque to the bank; and (b) returning the cheque lJnpaid by the drawee bank.

¶19The third act is tile return tile cheque by the dra·wee bank and thus ther·e is no scope for any artQument as to which bank is contemplated vv reference to the said . act. The second act pertains to the act of presentatiorl of. cheque to the IJank. i highlight tn tllr2 twin vvordls used are 'the bank. Cri.M.C.No.1056/2011 iSt matte1·s Page 115 of 2.7 1/

¶20e decision n::pmted as 2001 (3) SCC 609 Shri !shar Allov Steels Ltd. Vs. /avaswals Neco / td, a 3 Judge Bench of the Supreme Cou having as a member of the Bench the author of the judgme in Bhaskarads case (supra), dealt with and decided as ·vvhat would be meant by I the bank' as mentioned in Section 138 of the N! Act. V\/as it the drawee bank or e [Jayee bank? e Supreme Court answered the question !n the foliow'ing words:- " 2 . ( a) \!\I hat is rn e a n t by, I,, t h e b a n k" as mentioned in clause (a) of the proviso to Section 138 of the Neg able !Instruments Act, 1881?

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

(c) To whidl bank the cheque is to be presented for [Ql!Jrooses oif attractinq penal provisions of Section 138 of the Act?, are the questions be deterrnined by this Court in is appeaL 7 _ has f.: I- " :y:; noticec! a:= to make an offence .under S:2c:tion 138 of the Act, it is mandatory that e cheque is presented to "the bank" within a riod of six months from the date on vvhicr11 it is drawn or within the period of its validity, whichever is earlier" is the cheque drawn which has to be presented to "the bank" within the period specified therein. When a post-dated cheque is vv:-itten or dra11vn, it is only a bill of exchanQJe. The post-dated cheque become a cheque under rh::::· Act on the date which is written on the saiol cheque ancl the six months' CrLM.CI\Io.1056/2011 81 connected nv1tter·s Page17 ofn ! '}/ periocl has to be reckonE,], for the purposes of Section 138 of the Act, from the said date.

¶8Section 138: pr-ovides at 'ltlhere any cheque drawn by a person on an account maintained by him with a for payment of any amount of money to another rn out of that account for discharge, in whole or in part, of any debt or er liability, ,is (eturned IIJy "the bank" unpaid, either becausr= of tile amount of money to the credl:= that account is insufficient to honour the cheque or that it exceeds the a ount to be paid from that account by an agreement made with that bank, sucil shall be cleerr1ed to have com miittecl an offence pun ish a bie vvith imprisonment 3S prescribed erein subject to the conditions mentioned in clauses (a),· (b) and

(c) of tile pro.riso. Section 3 of the Act defmes the "banker' to include any person acting as a banke1· and any post office bank. :Sectfon 72 of the provides that a cheque must, in order to char·qe the cJrawer-, be p!-esented at the bank upon vvhicil it is d!-avvn before the relations between e d and n is banker has been altered to the }Xejudice of e d1·awer.

¶9The use of the words "a bank" and "the bank" in the section is an indicator of the intention of the le(jislature. The forme!- is an indirect (sic indefinite) artie e and tile latter is prefixcE::d by a direct (sic definite) artide. If the leg1islature intended to have the same meanings For "a bank" and "the bank", was no cause or occasion for mentioning) it distinctly and differently loy using two different articies. It :s worth noticlng at the word "iJanker" in :Section 3 of the Act is prefixed by the indefinite article "a" and the wol-d "bank" where the cheque is intended to be presented under Section 138 is p1·efixecl by the definite a de "the". The same section perrn[ts a person to a cheque on an account n1aintained by hirn with "a banf(' and Cri.M.C.i\Jo.1056/2011 8t matters Page 18 of .n --;! makes hinl !:able for chnn!nal prosecution if it is returned by "the bank" unpaid, The payment of cheque is contemplated by "the bank'' meaning thel-e!Jy where e person cheque has c:il account. "Then is the word used before nouns, lrvith a spec fil9 or particularising effect as Joposed to or generaiising fo1Te of "a" 01- '''an". it determines what particulat-tiling is meant; that is, what particular thing we are to asstJme to be meant. '''The" is always mentioned to denote a particular-thing a per::-:on. "Tile'' vvouid, therefore, refer irnpiicitiy to a specified ba:nk and not any bank. "The bank" -eferred to :n clause

(a) to the proviso to on 138 of the Act would mean the drawee bank Oil vvhich the cheque is dravvn and not all banks v\lilere the d1eque is presented for collection including the bank of the payee, in whose favour e cheque is issued.

¶10howevei-. does not mean1 that the cheque is always to be presented to the drawer's bank on whkh the ci1eque is issued. The payee of tile cheque has the option to pn::sent the cheque in any bc:lillk including the collecting bank where he has his account but to attract the criminal liabllitv of drawer of the cheque such co llecti nq bank is obliged to __ rQ.D::sent the cheque in the drawee or pavee lJ.ank on which ithe cheque is drawn witllin the period of six months from the date on which it is sl1ovvn to have issued ........ The :1or:-presentaUon of the cheque to tl1e dl-awee bank within the period specified )n the section would absolve e person issuing the cheque of his c:-iminal liability under Section 138 of the Act who shall otherwise nnay be to pay the cheque amount to the payee in a civil action initiated under lavv. A combined i"eadinq of 72 ancl 138 of the Act would leave no doubt in our mdnd tllat the lavv ·--·-- - mandates the c_b_eque_ to _bi;;__Qt-esented at the bank on which it is drawn jf the drawer is to be held criminal!:i_jiable. Sudl presentation is Cr!.M.C.No,l056/2.011 & COil!lPcteci matters Page I9 c,f.z7 -;! -.! <1/) necessarily to be made -within six months at_ the bank on whjch tf1e drawn whether presentee! or through another bank_t: _ namelv, collecting_bank of the QQ_'tee.''' (Emphasis Supplied)

¶21Thou9h the decision in ish.ar lJ\1/oJ/s case (supra) has been rendered in e context limitation for presentaticn of a cl1eque, tile saicJ decision -out in no uncertain terms that Section 138 of the Ni t\ct contemplates that cheque is required to be pt-eSf'n for encasllment to the drawee Bank and the payee Bank, merely acts as an agent of the fol-purposes presenting the cileque in questir:Hii fol-enc:ashrner1t to t!1e drawee Bank. !" LL, tl1e 2nd act to which the Suprerr1e Court referred to in Bhaskararr's case as one of the 5 vvhich constitutes offence under Section of e W\n A.ct vvas the presentation of thl::' cheque e drawee bank an j needless to state the act wh cJ1 co:1shtutes an of the offence is the return of the cheque unpaid by drawee bank and thus it becornes crystal clear that the and 3 1-d act constituting the offence vvould relate to only one place i,e. tile p!ace ''1!!lere tile drawee bank is located.

¶23These are my humble to lloid at the observations in jJa':-as 15 and 16 have to be read as an orbiter and thus tile 5 acts as offence are cap;;;1ble of being pe rmed not in .5 but only in 4 places and since deposit of the eque with the payee h-'-'l[/' jr "lOt- :=!•n ·-r--!- r.o· nt-or"lpi 0 •J-ocl -,,-- ,-,+ }...JOl 1'\.. r L)J .. L'-'• l: ic olai I! I! c Vii L I"- offence, the place the payee nk is located \NOt!ld be Crl.rVJ.CNo.1056/2011

8.•_ cor,nected rnaeers Page :m cf ll' ?/b irrelevant for pel usc:">::; of deternnlrdnQI jurisdiction of U1·e criminal court.

¶24It is settled lavv that a decision is an authority for the point it decides and not what can be logically deduced therefr-om and the of a decision has to be ;gathered with reference to tlv:: facts of a ca:'::e and highlight only one decision of the Suprerne Court being the decision reported as Dhod/7a lfo_u5!_? v 9 SCC 41.

¶25The matte1-regarding jl.n-isdiction can also be decided vvith reference to Section 6, :3e on 7, 64 and Section 72 of the Nl i\ct.

¶26The relevant ootTion of Section 6, Section 7 and C:actJ'Oil h4 (Yc r,'r ···.n,--l c.:er-·'-J' 1!-· 7'" ·O· f N·. jJ rt 11-eadc ar· -"---·- v _,J •. 1 .. Lc. O• 1,..1 .. , ,,,!._ ,I , I \_, . .::> . .:> ·under:-- Section 6. Clleque: - A "cheque" is a biH of exchange drawn on a spec ed banker· and not expressed to be payable· otflen/\fise than on demand and it the electronic image of a truncated cheque and a cheque in the electronic form. )( )( )( Section 7. The maker of .a bill of exchange or Cheque is cal1ed "clravver"; per-son thereby d!i-ected to pay is called tl1e "Dravvee". )( )( )( Section

¶64Presentment for payment.

(l)]Pro1T1issory nc,tes-., biUs of exchange and cheques must for payment to the maker, acceoto,- or drawee· ther-eof respe(:tively, by or on of the holder as hereinafter provided. In of such1 Cri.!Vl.C.i'Jo.1056/2011 81 con,lecteci matters :21 of 11 other thereto are rliJt Hable thereon to such holder .. ., .... )( )( )( Section 72. Subject e provisions of section 84 a. cheque rnust, o er to charge the drawer, be pi-esented at e bank upon which it is drawn before the relation between the drawer and his has been to the prejudice of the drawer.

¶27t, co-joint !-eaciing of Sections 6, 7, 64 and 72 as also of Section 138 of tile r011 i\ct bdngs out that in order to attract penal provisions of Section -13B of e Act a cheque !:3 required to toe presented fo1-encashnnent to the drawee Bank and that the payee Bank acts merely as an agent of the payee/complainant for-the purposes of presenting cheque in question to the dravvee Bank. necessary corollary thereof is tt1at no pa cause of action for tile offence punishable under Sectlorlr 138 of the Nil f-\ct arises in the Court within the ocal l!mits Bank of the complaijnant .e. payee Bank is situated and thus saic Court has no jurisclict!on to try a con'lplaint under Sectior 138 of the 1\11 Act filecJ by the COiTqJlainant.

¶28This takes me to the consid.er-a'don of second questio,-, involved !n the pres:::=:nt case i .. e. \ivhether the court vvith!r; local liimits oF which place from where complainant llad sent a notice contemplated under pmvisc I

(b) appende(j to Section 138 of the i\ct ls situated has the jurisdiction to try a complaint filed under Section 138 of the NlAct. Ci·i.IV1.C.I'Jo.1056/20ll g, con Pc.1ge.2.2 o·F 27 :-!

¶29! have alreaciy noted the observations maole by the Supreme Court in ec9./7askaran's case (supra) in the foregoing paras and would highlight th,;:rt in 17 to 23 th::: Supreme Court has reflected u ll tile nmitation VJithLi which the rnotice has to be Ql n to the accused. The Supreme Court was considerin9 tile expression 'giving a notice' in proviso ( ) to Section 1313 of the Ni 1\ct, ·with reference to the 15 clays' time contemplated th1en by 'Nhich the requisite notice :-ad to be served, which time is novJ 3C days.

¶30Another decision of the Supr,eme Court, reported as,

(2009) 1 sec 720 /-/arman Electronics Private Limited !I National Panasonic india Private ;_jn7ited is worth noting on the subject.

¶31In Hannan's case ·(supra) the question which had arisen before the Supreme Court wa5 precisely tj1e .same ,question which arises for conslclleration in e present. petition i.e. whether e court witlhit""g e local limits of which the· place from wl1en:: the compl,aiil1cHlt i1ad sent a notlce contemplateol under pmviso (b) to Section 138 of the Ni i\ct is situated has the jur"iscJiction to try a complaint filed under Section 138 of the f\! <-\ct e aforesaid question tn tl'le negative, the St__:'preme Cou observed as under:- /[12 .... ,The o,l!y question, erefore, vvilicl1 arises for is at as to vvhether sending of notice from Delhi itself would give rise to a cause of action for takinr2J corgnizance under the Negotiable l A1ct. Crl.f\ll.C.No.1056/20E 2( :::ollnec't:d matters Page :n of27

¶13It is one thing to say tflat sending of a notice is one of the ingredients for maintaining the complaint but it is another thing to say that dishonour of a cheque by itself constitutes an offence. For t!1e pur-pose of pnJving 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 i11 e main prov,ISIJOn. The proviso appended ereto, however, imposes certain further conditions vvhich are required to be fulfilled before cognizancre:' of e offence can be taken. lf the ingredients for constitution of the . offence I aid down in provisos {a), (b) and! (c) appended to Section uF the G!egJotiable instruments ,L,ct are intended to be applied in favour of the accused, cannot be any dourJt that receipt of a notice wouild u mateiy rise to the cause of action for filing a complaint. it is only on receipt of the notice that the accused at his own peril may refuse to pay the amount. Clauses (b) and (c) of the proviso to Section 138 therefore rnust be read tog1ether. issuance of notice wot.Jid not by itself gjive rise to a cause of action but corT1munication of the notice would. "." .... For constitution of an offence under Section 138 of tile t\ct the notice rrnust be received by the accused. lt may be oleemeol to llave been received in certain situations. The V\torcl "communicate'' inter ali::?J rneans "to make l/nOWf 1 i r-·-n "OllV 0 y ' J,,,l J •• ,L \._..: F'--"

¶20. .... f-\ 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. ,0, distinction must a !so be borne in mind ioetw.een the ingredient an offence and commission a ;<he offence" issuance of a ilOtice by the Crl.M.C.I\Io.1056/2011 & connected matters Page 24 of 2l instrun'lent is thereof is also impet-ative. Only on a servrice of such notice and failure on tile part of e accused to pay the demanded amount vvithin a period of 15 days thereafter; tile comrnission of an offence completes. Givinq of qoUce therefore, cannot have __ pl-eceqent oyer servict2. It is only from that vievv of tlle matter that in Daln7ia Ce;nent (B!;arat) Ltd v. Galaxy Tr:::tders & Agencies Ltd emphasis l1as been laid on service of notice_,,. (Einphasis Supplied)

¶32At a first blus:-1 readinQi of tlle decisions of the Suprerne ,---. ...... r·-·t . L:Y ....... , c-! ,-.-,. --.. d L/ r··-, . .-, :-;. r-·-/ .--- r-- c r c· (,.c.· •I .' ,,-., \ rr"Y"" - \..._, u u I I I I !:?_!_i G ·--' ·< :J n / !'a I t' ,I I G / f ,':::; Ci e -... J up 1. J IL ' ' I a y strike to the readei-that there is a co ict between the two decisions ,inasmuch c's in Bhask?Jrads case (supra) it was held that the expression 'giving of notice' occurring rn i proviso (b) to Section 138 of e J\ct rnea11s 'sending ot notice/ whereas in l-!arn?an's C35e (supra) it \vas that the said expressioil means

¶33A careful r-eading of the tvvo decisions shovvs that the-e is no conflict betvveen the said clr::-cisions inasmuch as they have been rendereci in contexts. The decision 1n Bhask_pJads case (supra) was rendered in the context Jf stal-ting point of 1in:itation pe!-iod of 15 days in proviso (b) to Section 133 of the Ni Act and was in that context i.e. the context of limitation that it was held by the Supreme Court t:l3t expn:-ssiion giving of notice·' occurring in proviso (h) to

1.38 of the Ni Act means 'sending or notice , The decision in /-Iannan's case (suprCi) was render·ed in trv::' context of caus,e of action for filh1g a complaint under Section 138 f'-jH jurisdic:tjon of a "ri•-t-'I c I '::1 ,.. c 0 IJ ,_,_ .:::> c·: i ;:1 t (" () n to\-'-- ;-t lf'J ., ,- !roe l d io· \/ th···e fJ '-'' l - L L, ._. ' .\ ll . ll ...,.., ,.. -· ._ ' . -'C .. /\ L il !J CJ ,2'1 iJ ' I j' t l C:!.IVl C.No.1'J56/2JH1 8t mc;tters ?age Z5 of Zl Supreme c:::ourt at the e.>qJression g'ivlng of notice' occu n-i ng J '11

¶11t '::. ("': l I j'../, '-' -· '·-' (b) to Se .. on 138 of the Ni iJ,ct means 'receipt olnot/ce '.

¶34Now, same expression can have different meanings in different context as held by·· trle Supreme Court in the decision reported as fl1alik Lal !}J_gju;ndar v Gourar.Qf!_ Chandra Dey (20C)4) 12 SCC 3 vvherein it was observed that a word occ:'.HTi:-:g in a ry provision can have different rneaningrs in d1ffere coi-ltext sar'le statute. :JS _) . Thus,. the inevitable conclusion would t1e that the 4th act conternplateo: as · an ingrreolient of the offence iligrilightecl in Bhaslcqran's :,i.e. 'giving notice in writi7g to tf7e dra Wr::!F of cheque' den7ancfi/7g payrnent of tlJe cheqiJe an7ount for purposes of limitation would have a meaning ;315 explained in Bhaskara12's casr=: and for purposes of jurisdiction would have a meaning! as explained in ls/7ar AlfQJ(S case (supra),

¶36Before conciuc!ing I vvou!d D·e failing not to lodge a caveat. Witll electronic bankinrg and facility at par of clearance provided by bankers and especially .n rnetropolitan cities, ·vvhere cheques are cleared by not beirg presented to the dravvee bank 1Dut at nodal branches of tre concerned banks, subject matter of juhsdiction me::y have to be decidec keeping in vl:evv that the drawee bar.k ha.s created an agency w!lere the clleque in question ,s tt-ansrnitted for ciecv,;:nJCe and e s L \Nher·:=: tine c1earance tal<es place vvouid en arDuab 1y IJecorne the place vvher'e Cri.M.C.No.1056/2J11 8, :-il<Jtters iJage 2.15 of 2.7 I I 1: l': ii[' ' . ' '·,1 t<i I if; :rt: Jl ·. ';::. i f ··1·'. : ill IJ I li I !; I ' . r'l· : f) : (!i l:i 1\1 8'1 i! ;"[ WI i, ., !: ( w J the cheque woui be requi1-ec1 to be treate-d as presented to 'the bank' Le. .e cli-awee bardc B , in such circumstances, properly constituted p1ieadings have to be found in a complaint and loclging the caveat i leave it at tllat for the debate to be pr;_::,perly argued in an appropriate case v1ith the necessary r-eie"Jant

¶37hold that c;n the pleadings in the complaint(s), no part of cause of c<tiori can be .said to have accrued to the conrlp!ainant [J:.:_:lhi: that tile notice demanding payment vlfas, 'posted Deihl and U1at e cheque vvas \N the payee at Delhi would not constitute "ti1lt:: contemplated as ing:redients an offence punishable u:--t:ier Section and thus I dispose of the petitions quasl1ing the irnpugned order(s) elated 14 .. 2 .. 2011 and di(2Ct U1e learned /'j\C M to return compiaint(s) to , 2 respondents for: filing1 · in a Court having judsdiction.

38.. No costs .. SEPTEMBER 21, 20Jl1 !Tlm Cri.M.C.No.1056/2011 [!i matte1·s ·-r--:·· (PHADEEP JUDGE Page Z7 c.f 27 -

* % + IN THE. HIGH COURT OF DELHI AT NEW DELHI Judgment reserved on: lffh September, 2011 Judgment pronounced on: 21st September, 2011 CRL.M.C. 1187/2011 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 3. Whether the Reporters of local papers may be allowed to see the judgment? 4. To be referred to Reporter or not? 3. Whether the judgment should be reported in the Digest?