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

PRADEEP NANDRAIOG, J. For orders, see Cri.M.C.No,l056/2011. SEPTEMBER 21, 2011 mm ---, JUDGE -"-:j 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. '% + uhl THE C p;,-r OF· r !J T NEVV . /r !i-lrYrnr:;,i 1t re,;:;·.arvcyl on 1817 SenteFnL1er 2011 .. __ 1 _;:::___.::__-::_ ___ _ i!l_.(fq!T:ent pronounce(f on.· 21st Se/Jtren?ber 2011 SHREE P\Aj TRAVELS G1 TOUHS LTD. G1 ORS ...... Petitioners Through: Gupta, Sr.Advocate with . Zaveri, Mr.Gaurav 1\ g .::,1 rvv a ! a n d M r·. T a n rna y a ,O,dvocates versus DEST!NJ\TION OF THE \1\/0HLD (SUBCO 1\JEI\tiT) PP.lVI\TE i_TD. .. ... Respl}nder;t Through: !Vk,Anindya Malhotra, .L\dvocate C P l M -1 ] 6 !2 0 11 .:\. ..• __ ll,, =---.:!_ SHREE RAJ TRAVELS & LTD. & ORS. . .... 1PeUtione1·s T!llr(\' 1 ,.,, h " I .. · l.r :J! I . upta, Sr.l::'."dvocate with M 1· .. j n Zaveri, Mr. Ga ure1v AganflfiJil and Mr.Tanmaya ,Agarwal, f-\dvocates versus ON OF THE V1/0F\ (SUBCONT!I\JENT) P·PJ\/,L\TE ..... Respondent Th1-oug1·1: Malhotra, Advocate CR.LM.C. 11.71!2011 SHREE RL\j TR/\\/ELS 6( TOUr-ZS lTD. ORS. . .... Petitioners !Vlr upta, Sr.Ac!vocate vvitll Mr.j] n ZaverL. /J,g a rvva !i and n maya Agarwal,, A.dvocates Cri.M Ci\Jo.1056j:2011 & co 1;1-,ect:d !Ti?ttt.rs r=age 1 of 2/ ·-.! versus OF THE \NORLD (:SUBCONTINEI\IT) PRIVATE LTD. . .... Respondent Through: Mr.Anindya Ma!hotra, Advocate CRLM.C .. 117212011 :SHREE iQ,AJ TRAVELS 6( TOUFZS LTD. & ORS. .. ... Petitioners Through: Gupta, Sr.Aolvocate with Mr.jjatin Zaveri, Mr.Gaurav A g a rw a a n d M r. T a n rna y a A,dvocates versus DESTINIAT!ON OF THE \1\/0RLDr(SUBCONTiNEINT) PRIVATE LTD. .. ... Respondent Through: Mr.1LJ.nindya Malhotra, /\dvocate CRLM.C. SHREE RAJ TRAVELS & TOURS LTD. 6( ORS. . .... Petitioners Gupta, Sr.Advocate with M abn Zaveri,, Mr.Gaurav Agarwal and Mr.Tanmaya Through; Aga rwad, Advocates ver-sus DESTIN/-\TION OF THE \NORLD PRiVATE LTD. .. ... Respondent Through: Mr.Anindya Malhotra, Advocate CRLM.C. 11 Jl:l/2011. SHREE RAJ TRAVELS & TOU LTD. & ORS. .. ... · Petitioners Thr-ough: Mr.Sunil Gupta, Sr.Advocate with Mr-.Jatin Zaveri, Mr.Gaurav ,6,garwal and Mr.Tanmaya Aga rwa I, Advocates Crl.fv1.CI\Jo.1056/20:Ll 15, connected ITirltters Pagel of 27 ver-sus DESTIN/"-\TION OF THE VVOR.LD (SUBCOI\iTH\IENT) PRIVATE LTD. ., ... Respondent Through: Mr.P\nindya fvllaihotra, Advocate CRLM.C SHP\EE RAJ TRAVELS 0( TOUH5 LTD. 01 ORS" ..... Petitioners Through: Mr.SU1.1H Gupta, Sr.Advocate with Mr.jatin Zaveri, Mr.Gaurav AganNai and M r.Tanmaya Agarvvall .. )J,dvocates versus DESTII\IATION OF THE WORLD (SUBCONTiNENT) PRIVATE LTD. . .... Respondent Througll: Mr.Anindya Malhotra, .Advocate CRLM.C. 11113/2011 SHREE Ri\J TRAVELS & TOURS LTD. &1 ORS. . .... Petitioners Mr.Sunill Gupta, Si-.Advocate with Mr-.Jabn Zaveri, Mr.Gaurav Agarwal and Mr.Tanmaya Through: Aga rwa I, versus OF THE \1\/0RU) LTD.. .. ... Respondent Through: Mr.Aninol)r'a Malhotra, CRLM.C. SH REE I:Z/-\j TRAVELS 6,( TOURS & ORS. ..... Petitioners Mr.Sunii Gupta, Sr.Ad\Jocate with Zaveri, Mr.Gaurav Agarwal and Mr.Tanmaya Through. Cri.IVI.C.No.1056/201l 8t connected matters -- .-! i\dvocates versus DESTINATION OF THE WOR (SUBCONTINENT) PRiVATE LTD, ..... Respondent Through: Mr.Aninolya Malhotra, Advocate CRLM.C. 1179/2011 SHREE RAJ TRAVELS 6c TOURS LTD, . 6c ORS. .. ... Petitioners Mr.Sunll Gupta, Sr.Advocate with Mi-.Jatin Zaveri, Mr.Gaurav Agarvval and Mr.Tanmaya Agarwal, Advocates Through: versus OF THE \1\/0HU) PRIVATE LTD, ...... Respondent Th1rough: Mr.Anindya Malhotra, Advocate CRLM.C. SHREE RAJ TRAVELS & TOURS LTD. & ORS. .. ... Petitioners Through: Mr.Sund Gupta, Sr.Advocate with Mr.Jatin Zaveri, Mr.Gaurav Agarwc:d and Mr.Tanrnaya AganNai, Advocates versus DESTINATION OF THE WORLD (SUBCOr,JTINENT) PRiVATE LTD. . .... Respondent Through: Mr.Anindya Malhotra, Advocate CRLM.C. ltB3/2011 SHR.EE RAJ TP.AVELS 6c TOUFt:; LTD . 6( ORS. ..... Petitioners Mr.Sunil Gupta, Sr.Advocate with Mr.jlabn Zaveri, Mr.Gaurav Througfl: Cri.M.C.No.1056/2011 & connected mattPrs i [o /:>..garwi3JI and Mr.Tanrnava ' J ft.ga versus OF THE VVOR.LD LTD. . .... Respondent Througil: Malhotra, t\dvocate .[]3LM.C. llB6[:;2011 SHREE Ri\1 TP\1-\VELS &, TOUP5 LTD. 6c ORS. .. ... Petitioners Gupta, Sr.Advocate with Mr.Jatin Zaveri, Mr.Gaurav Aganrvai and Mr.Tanmaya Agarwad, Advocates Througr1: versus DESTINATION OF THE \NORLD (SUBCONTiNENT) PRIVATE LTD. .. ... Respondent Thi-ough: !VIr.i-\nindya Malhotra, Advocate CRLM.C llBJ/2011 SHREE P,AJ TR;\VELS & TOURS LTD. 6c ORS. .. ... Petitioners ""l1ro• 19 h · II • ..._

¶11Gupta, Sr.J\dvocate with Mi-.J]atln Zaveri, Mr:Gaurav Agarwal and Mr.Tanmaya f1,g a rvva I, !'21dvocates versus OF TI-lE \1\/0RLD (SUBCONTiNEf\IT)PRIVATE LTD. .. ... Respondent Through: Manlotra, .Advocate (:RLM.C llB:S:/2011 51·-!REE :Ri\l THAVELS 6( TOUB5 :_TO. & ORS. . .... Petitioners Through: Mr.Sunl Gupta, Sr.Advocate Crl.M.C.No.1056/201l connectecl iT:attet·s Page 5

7.7 -·-.! with Mr.jatin Zaveri, Mr.Gaurav Agarvval and Mr.Tanrnaya Agarvva I, Advocates versus DESTINt\TION OF THE VVOHLD (SUBCONTINENT) PR!VArE L··,-n_ ..... Respondent Through: Mr.J.\ninolya Malhotra,. Advocate CORAIM: HON"BLE MR. jUSTIIC.E iPH/\DEIEl!Jl l. V\/hether the Reporters of papers r11a\f be allowEd to see the judgment?

¶2To be refen-ed to R.eporter or not?

¶3Wilether the judgment should be reported in the Digest? PRADEEP NAINDRAJOG,].

¶1Briefly stated the facts to fiHng of the above captioned petitions are that i.e. 'Destination of Wor-ld (Subcontinent) Pvl=. Ltd.' a connpany registered under the Companies Act filed 15 under Section 138 of the Negotiable Instruments Act, 1881 (ilereinafter referred to as the 'f\11 16.ct'); 3 cheques the subject rntatter of each complaint. Petitioner No.1 'SI1ree tRaj Trav'els & Tours Ltd.' a company registered under the Companies Act was impleaded as accused No.1 and petitioners 2 to 7 vvere · impleaded as co-accused on tl·1e alleQiation that as Directors they were inc:har-ge of the day to da:/ affairs of the company and hence were vicariously liable for the defaults of the company. The cornplaint was filed in e Court of Additional Chief Metropolitan Magistrate (hereinafter referred to as the Crl.fi/I.C.I\Io.1056/2011 s,,_ connected matters Page 6i of 27 -- 'ACMM') New Delhi, inter--alia, ,C;rverring that the respondent company and the accused No.1 company had entered into 2 agreements in terms whereof the accused No.1 company had issued 45 cheques drawn on State Bank of . Mumbai Branch, in favour of the respondent company, which cheques when presented for encashment by the respondent company with its Banker Bank New Delhi, were dishonoured and upon the cheques being returned the respondent company isS<ued 1·1otices contemplated under proviso (b) to Section 138 Nl fl,ct from Delhi to the accused No.1 company which failed to make payment in respect of the sum for which th-e cheques vvere drawn within 15 days of the receipt of the said nobces. \/\lith respect to the jurisdiction of the Courts at Delhi vvas pieaded that for the reason the respondent company had presented the cheques in question for-collection with its banker Bank situated in Delhi, the Court had the necessary

¶2may be noted at the outset that after the comp!a i nts filed, tile respondent company filed a suit bearing No.SS0/2010 in which petitioner No.1 was impleaded as the defendant before the High Court of Bombay prayin·;J for a decree to be passed in the sum for which the 45 cheques forming subject-·rnatter of the aforesaid ·complaints vve1re issued. the plaint, jurisdiction of the CoUI-ts at IVIumbai was pleaded on the averment that the agreement pursuant whereto the cheques were issued was executed at Mumbai as also that the cheques question were drawn and issued at MumbaL Cri.IVI.C.No.1056/2011 8t corv1ected matter·s Page 1 of :z:r '! ( J

¶3Taking cognizance of the complaints, the learned ACMM sumrncnecJ the petitioners to face trial for an offenc:e punishable under Section 138 of the N.l. Act.

¶4Upon service of the summons, the petitioners filed application(s) under Section 177 Cr.P.C. inter-aHa stating that the courts at Delhi l1ave no jurisdiction to take cognizance of complaints· and prayed that complaints be to the respondent to be filed in tt-:e court of competent jurisdiction. Together with the said application(s), petitioners 2 to 7 filed appiication(s) seeking exemption for personal appearance before Cour;t. Dismissing application(s) r:;eeking exemption from personal appear-ance and keeping pending, fer consideration, application(s) fileol under Section 177 Cr.P.C. vide 01rder elated 25.05.2010 the iear-ned ACMM issued bailable warrants against petitioners 2 to 7.

¶5Aggrieved by the order alated 25.05.2010, 2 to 7 filed petition(s) under Section 482 Cr.P .. C. before this CoUI-t, which petitions were dismissed vide order dated

23.09.2010. Aggrieved thereto, pebtioners filed petitions seeking Special Leave to Appeal befor-e the Supreme Court which were disposed of vide orcler: dated 14.1.2011 with a direction to the learned tl1at applications filed undet Section 177 Cr.P.C. would be disposed of within 2 weeks.

¶6Vide order dated

14.02.2011 learned dismissed the application(s) under· Section 177 Cr.P.C. filec by the petitioner-s on the ground at view of the dicturr. of law laid down by the Supreme Court in the decision Cri.M.C.No 1056/2011 & connected matte1·2 Page J3 of 27 reported as (2004) 7 SCC 338 /:!dalat Prasad v Roop La/ ' Jindal once the r .. iagistrate has taken cognizance of a complaint he has no power to retuiTl the same to th'2 complainant with a direction that the same be filed in a court of competent jurisdiction.

¶7Aggrieved by the order dated 14.02.2011 passed by the !earned ACMM, the petitioners have fiied the above-captioned petition(s) under-Section 4B2 Cr.P.C. requiring this Court to hold that oJurts at have no to take cognizance of complaints in question and seek directions to the learned ,L\CMM to return the same for filing before the Court of Competentjur·i,:;diction.

¶8It is the case of the petitioners that the cheques in question were drawn at MumbaL The drawee bank is Mumbai, notice issued by the respondent 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 confet-jurisdiction on Courts in Delhi.

¶9Tile issue i1as to be debated 1vitll refere.nce to Section 138 of the Nl P,ct and the applicable provisions of tJH2 Code of Criminal Procedure i.e. Sectior1s 177, 178 ancl 179 of the Code of Criminal Procedure.

¶10reported as 1999

(7) SCC 51C \Is. · Sha'r1l;_aran_ Balan Supreme Court has opined, aftel-considering 17f to Section 179 of the Code of Procedure, that ar. Cri.IV:.C.I'io.1056/2011 & connec.i:ed :-r.atters Page '9 of "-.! -.! I .S offence may be cornp!eted in different localities and thus can be triecl in any Court jurisdiction over saiu! localities. To put it pithily, iin relation to territorial jurisdiction, qua an offence, lavv ;-ecognizes more than 1 court havingi territorial jurisdiction and the issue of territoriai jur-isdiction would have to be decided with reference to vvhether a part of an offence 'INas cpmmitted within the territorial jur-isdiction of a .court. The issue is no r-es integr-a and I just neecl to note the decision of the Supreme Court in. KBhaskarads case (supra) and hiQJhlight that the aforesaid is to be culled out from par·as 11 and 1:2 of the said decision.

¶11The next logical question 'ti\fouid be, \1\fhat are the contour-s of Section 138 of the Nl .1!:\c:t pertaining to acts to be . . performed in relation to an offence contemplated by the said Section? hardly be re-ernphasized that it are acts of commission or ornission which constitute offences, with or, without the requisite rnens rea, depending upon Vlfilether the offence an absolute offence or not.

¶12Let me thus note Section 13El, t\11 A.ct which reads as under:-'INhere any cheque drawn loy a person on 2n account maintained by hirn with a banker for payment of any amount of r·noney to another person from out of tllat account for dischar9e, in whole or in part, of any debt or other liabiiity, is returned by tile bank unpaid, either because of the anwunt of money standing . to the credit of that account is insufficient to llonour the cheque Dr that it ;;:?J(ceeds the arrwunt arrange·d to be paid fronl that account by an Crl.JVLC.No.1056/2011 8z cnnnectecl rnatte1·s I -Page 10 of 2.7 ' ( r,· agreernent made with tllat bank, such pe!-son shall be deemed to have committed an offence and shall prejudice to any other provisions of this Act, be punished with imprisonment for a term whkh may extend to two ye;:n, or with fine which may extend to tvvice the amount of the cheque, or with both: Provided that nothing contained in this section shall appiy unless-

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

(b) The payee or the holder-Induce course of the cheque,, as tl1e case may be., makes a demand for-the payment of the said arnotmt of money by giving <=!I notice, in writing, to the 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 fails to make the payment of tile said amount·: of money to the payee or, as the case may 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 liability" means a legally _ enforceable debt or· other

¶13In Bhaskaran's case (supra) the Supl-eme Court haol an occasion to clea! with the issue of territorial jurisdiction in relation to Section 138 of the N! /\ct, and of necessity, the discussion required the Supreme Court to liden,bfy the various acts of commission and Gi!Tirlssion which con::;.tituted the offence punishable under Section 138 of the /\ct and suffice would 1it be to highlight U1at in para 14 of the Cri.IVJ.C.No.1056/2.011 g, connected malte:-s Page 11 ofZ7 [ decision, the Supreme Court hitghiigi1ted that there are 5 acts which are the components of the offence punisJ1able under Section 138 of the Nl Act and i re-produce tile same from para 1.LJ: of-the decision of the Supreme Court. They read as under:-

(i) drawinq of the cheque,

(ii) presentation of the cheque to tile bank,

(iii) returning the cheque unpaid by the drawee bank,

(iv) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount,

(v) failure of the drawer to make payment within 15 days· of the receipt of the notice.

¶14After r10!ding that acts wouid constitute components of an offence under Section 138 of the Nl Act, in paras 15 and 16 the Court observed as under:- l/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 diffe(ent localities. But a concatenation of all the above five is a sine qua non for tile compietion of the offence under Section 138 of tile Code. .In tills context a reference to Section 178( d) of e Code is useful. It is extracted below:

¶16Tllus it is clear, if the five different acts were done in diffe(ent localities any one of the courts exercising jurisdiction in one of the five iocal areas can become the place of for the offence under Section 138 of the A.ct. In other words, the complainant can choose any one of Cri.M.C.No.1056/201l & connected matter.> Page l2 of 27 (15 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 expan::;ive it is an idle exercise to raise ju risd ictiona I question regarding offence under Section of the Act." (Etnphasis Supplied)

¶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. more important point to be dedded in this case is whether the cause of action has ar·isen at all as notice sent by complainant to tile accused \Nas returned as "unclaimed". The conditions pertaining to the notice to be given to the drawer, have been for-mulated and incorporated fn clauses (b) to {c) of the proviso to Section 138 of the Act. The said clauses are extracted below::

¶18On the part of the payee he has to make a demand by ll gi\ring a notice''" in wribng. that was only requirement to complete offence on the failure of the di-awer to pay the cheque amount within 15 days from the date of such "tgiving", of the prosecution would have been very mucil lessened. But the legislature says that failure on the part of the drawer to pay the amount should be within 15 days {{of the r-eceipt" of the said notice. is, therefol-e, clear that "giving notice" in the context is not the same as receipt of notice. Giving is a process of vvhich receipt is the accomplishment. is for the payee to perform tile former pmcess by send1in1] e notice to the drawer at the correct address St connected matters Page B of '1.7 '!

¶20If a strict is given that the drawer should have actuaHy received the notice for the period of 15 days to start running no matter that the payee sent the notice on tl1e correct: address, a trickster clheque drawer wou!d get the premium to avoid recei\dng the notice by different strategies and he could escape .from the legal consequences of Section 138 of the ,Act. it must be borne in rnind that e court shouid not adopt an interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative measure. 21 ..... The context envisaged in Section 1.38 of the Act invites a Iibera! interpl-etation for the person who has the statuto1-y ololigJation to give notice because he is presurned to be the loser in the transaction and it is for his interest the very provision is made by the les;1islature. The words in clause (b) of the proviso to Section 138 of the Act show that tile payee has the statutory obngatlon to "make a demand" by giving notice. The thru:st tn the clause is on the need to "rnake a demand". it is only the nnode for making such demand which the legislature has prescribed. ,4 payee can send the notice for doing part for giving the notice. Once it is despatched his part is over and the next depends on vvhat the sendee does. 22: it is weil settled that a notice refused to be accepted by the addressee can be presumed to have been served on him (vide h'archaran Singh v. 517/vraniZ and jagdish Singh v. 1\!atthu Singh3).

¶23the notice is returned as unclaimed and not as refused. \J\Iill be any difference betvveen tvvo so far as presumption of service is concerned? !n this Crl.iVI.C.I\Io.1056/20111S( connected matters Page :14 of Z7. connection a to Section 27 of the General Clauses i\ct will be useful. The section reads thus:

¶24No doubt Section 138 of the Act does not require that the notice be given only by "post". tile princ\ple incorporated in Section 27 (quoted above) can profitably be imported in a case where sender has despatched the notice by post vvith the correct address written on it. Then ·[rt can be deemed to have been served on the sendee unless he proves that it was not reaHy served and that r:1e was not r·esponsible for such non-service. other interpretation can lead to a very tenuous position as the drawer of the cheque who liable to pay the amount resort to the strategy of by successfuHy avoiding the notice.

¶25Thus, when a notice is returned by the sendee as undaimed such date would be the commencin'9 date in reckoning the period of 15 days contemplated in clause (c) to the proviso of Section1 138 of the Act. Of course 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 did not even attempt to discharge tile lourden to rebut the aforesaid presumption." (En7pl7asis Supplied)

¶16The expressions: 'presentation of the cheque to the Bank' a.nd 'if the five different acts 1111ere clone in tlve different loc-alities any one of t!?e courts exercising jurisdiction in one of the five local areas can becotne the o/ace of trial (or the Llnder Section 138 ol the to . . he f I d ·, 'r"' li1 r:\," I 1(:: :::\!·' · .. .O,Jil Ill 1Jcrns --.·· o.1lO _ ,_; •. ec IVC. )1 Ill case have been understood loy many to mean that Cri.M.C.I\Io.1056/2011 /?,t conr:::cteci 1112tte•s P<:!ge 15 of 27 i ---,! ( the Court within local limits of vvflk:h the payee Bank'i.e. Bank vvhen:> the complainant deposited the cheque is situated has the jurisdiction to lTy the complaint unde: Section 138 of the Ni Act, and tile i.molerstandingl appears to be fortified by the observations of the Supreme Court in paras 15 and 16 that if the 5 acts contemplated as the ingredient of an offence under Section 13.8 of the Ni Act we1-e done in 5 different localities, any one of the court exercising jurisdiction in any one of the 5 ·local areas vvould have jurisdiction.

¶17But, it is apparent that the observations in para 15 and 16 are an obiter as it is not 5 places vvhere the 5 acts constituting an offence under Section 138 of the Act can possibly be pe1rfon11ed The act:; can be performed, as would be ·explained hereinafter, onlly at 4 places and i would immediately state that act No.2 and act No.3 reiate to only one place i.e. the place where the drawee bank is iocated.

¶18The second and the tl1ird act, of the 5 !isted by the. Supreme Court, as COilstituting thr::_: offence under Section 138 of the f\!1 A.ct are: (a) presentation of the chequre to the bank; and (b) returning the cheque unpaid by the drawee bank.

¶19The third act is the return of tile cheque by the dl-awee bank and thus there is no scope for any angument as to which bank is contemplated with !reference to the said act. The second act pertains to the act of presentation of cheque to the bariil<. i highligrTt tl1e twin words used are 'the bank. Cri.M.C.No.1056/20118t connected matters ., ' -J 1;11,: "'1. l ·f ' ?"2/

¶20the decision reported as 2001 (3) SCC 609 Shri !shar Allov Steels Ltd. Vs. /avaswals Neco ltd., a 3 Judge Bench of the Supreme Court, having as a ITember of the Bench the author of the judgment in Bhaskaran's case (supra), dealt with and decided as to '1/\fhat would be meant by 'the bank' as mentioned in 138 of e Nl Act. VI/as it the drawee bank or . the payee bank? The Supreme Court answered the question in the following words:- "L

(a) \1\fhat is ITH:::ant bjt, ''the bank" as mentioned in clause (a) of the pr-oviso to Section 138 of the Negotiable !Instruments Act, 1881?

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

(c) To which bank the cheque is to be presented for purposes olf attractinq penal provisions of Section 138 of the Act?, are the questions to be determined by this Court in this appeaL 7 _ has er tc, noticed at to make an offence .under Section 138 of the Act, it is mandatory that the cheque is presented to lithe bank" within a period of six months from the date on which it is drawn or within the period of its vaHdity, whichever is earlier. it is the cheque drawn which has to be presented to "the bank" the period specified therein. When a post-dated cheque is written or drawn, it is only a bill of exchang]e. The post-dated cheque become a · cheque ·under the Act on the date which is on the said cheque and the six months' CrLM.CI\Io.1056/2011 81 connected m . .:;tte!'S Page 17 of .27 period has to be reckoned, for the purposes of Section 138 of the Act from the said date. \

¶8Section 138 provides that '11Vhere any cheque drawn by a person on an account maintained by him with a "banker" for payment of any amount of money to another person from out of that accour1t for the discharge, in whole 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 creok of that account is insufficient to honour the cheque or that it exceeds the amount to be paid from that account by an agreement made with that bank, such person shall be deemed to have commiitted an offence punishable vvith imprisonment as prescribed therein subject to the conditions mentioned in dauses (a), (b) and

(c) of the proviso. Section 3 of the Act defines the "banker' to include any person acting as a banker and any post office savings bank. :Sectfon 72 of the Act provides that a cheque must, in order to charge the drawe1-.. be presented at the bank upon vvhich it is drawn before the relations between the and his banker has been altered to the prejudice of the drawer.

¶9Tile use of tile words "a bankiF and "the loa nk" in the section is an indicator· of the intention of tile legislature. The former is an indirect (sic indefinite) artic!e and the is prefixed by a direct (sic definite) artide. !eg1is!ature intended to have the same meanings for "a bank" and lithe bank", then:< vvas no cause or occasion for mentioning) it distinctly and different!y loy using two different artides. is worth noticing that the word "banker" in Section 3 of the Act is prefixed by tile indefinite article "a" and the word "bank" where the cheque is intended to be presented under Section 138 is pi-efixerd by the definite a de '''the". The same section permits a person to is::.ue a cheque on an account maintained by him with "a bank" and o-I.M.C.No.1056/2011 & connected matters - ' makes him liable for ct-iminal prosecution if it is returned by "the bank" unpaid, The payment of cheque is contemplated by "the bank" meaning thereby where t;he person issuinQJ the cheque has an account. (/The" is the word used before nouns, with a or particularising effect as opposed to indefinite or generaiising force of "a" 01- '·'an". 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 particula·r tiling or a person. "The'' would, therefore, refer implicitly to a specified bank and not any bank. 1/The bank" referred to in clause

(a) to the proviso to Section 138 of the Act ·wou!d mean the drawee bank on which the cheque is drawn and not all banks where the cheque is presented for collection including the bank of the payee, in whose favour the cheque is i::;sued.

¶10it, however, does not mean that tile cheque is always to be presented to the di-awer's bank on which the cheque is issued. The payee of the cf1eque has the option to pn::sent the cheque in any bc11nk including the collecting bank where he has his account but to attract criminal liability of the di-awer of the cheque-such collecting bank is obliged the cheque in the drawee or payee bank on which cheque is drawn within the period of six months from tile date on whicll it is shown to have been issued ........ The non-presentaUorn of the cheque to the drawee bank within the period specified in the section would absolve the person issuing the cheque of his criminal liabHit)f 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 A combined readinq_of Sections 3 72 and 138 of the Act would leave no. qoubt in ou1= mind that th1e mandates the cheque_ to at bank on which it is drawn if the dl-awer is to be held criminallv liable. Such presentation is Crl.r/i.C.No.1056/2011 & connected matters Page 19 of 2J i necessarily to be made within six months at_ the bank on which the cheque is drawn whether presented personally or through another namely, collecting bank of the payee." (Emphasis Supplied)

¶21the decision in lsh;p- /J,\1/o)/s case (supra) has been rendered in the context of limitation for presentation of a cheque, 'the said decision lorings out in no uncertain terms that .Section 138 of tile Ni .Act contemplates that a cheque is requ!red to be prese for encashment to the drawee Bank and that the payee Bank, merely acts as an agent of the payee/complainant for the . purposes of presenting the cheque in questi()n fol-encasbment to the drawee Bank. / r; L.L. Thus, the 2nd act to whlcll tfiJe Supl-errle Court to in Bhaskarar/s CC:1Se as one of tl-1e 5 vvhich constitutes tile offence under Section of tl\le !\H Act was p!-esentation of the cheque drawee bank an,] needless to state the Td act constitutes an of the offence is tile return of tine cheque unpah:J by the dl-awee bank and thus !t beCOITiJeS crystal clear that the 2nd and 3rd act constituting the offence relate to only one place i.e. the p!ace v,Jilere t!1,e drawee bank is located.

¶23These are my humble feasons to hoid that the observations. in paras 15 and 16 have to be read as an orbiter-and thus the 5 acts conteiJTIJ)Iated as constituting the offence are cap;:;Jble of being performed not in 5 but ordy in 4 places and since deposit of e cheque with the payee bank is not an act conternp!ated as an ingredient of the offence, the place the payee bank located \N·ould be Crl.M.C.No.1056/2011 s,_ connected Page :w of Zl - .-! ?(,. irrelevant fo( of dete(rnir;,iilQ jurisdiction of the criminal court.

¶24It is settled law that a decision is an autihority for th!e point it decides and not what can be logically deduce::l therefrom and the ratio of a has to be gathere,:J with reference to the facts of a ca:'::e just highlight onl1 one decision of the Supreme Court being the decision reported as Dhod/7a v S_)(_l)ainq[(2006) 9 SCC 41.

¶25The matte1-regarding jurisdiction can also be decided vvith reference to Section 6, :section 7, on 64 and Section 72 of the Nl

¶26Tile relevant portion of. Section 6, Section 7 and Section 64 of I'H Act a,·,d Section 7'2 of the Nl P1ct reads as under:-· Section 6. Cl1eque: - A "cheque" is a of exchange drawn on a specltled banker· and not expressed to be payable otl1erwise than on demand and it 1nciudes the electronic image of a truncated cheque and a c:heqlJe in the electronic for·m. )( )( )( Section 7. The maker of a biH of exchange or-Cheque is ca II ed "cl rawer"; person thereby di!-ected to p2y is called the "Dravvee". )( )( )( Section

¶64Presentn1ent for payment.

(l)]Prorr1issory notes, bills of exchange and cheques must be presented for payment to the maker, acceptor or drawee thereof respectively, by or on behalf of the holder as hereinafter pi-ovidecl. In default of such CrUvi.C.i\:o.1056/2011 & con,-lecteci matters Page :n of17 ---.! -;! other pal-ties ther-eto are nut liable thereon to such holder ....... . X )'( \ )( Section 72. Subject tc1 e provisions of section 84 a cheque n1ust order to charge the drawer, be presented at the bank upon w1nich it is drawn before the relatkm !between 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 also of Section 138 of the Nl bi-ings out that in order to attract penal pr-ovisions of Section 138 of the Act a cheque is required to be presented for-encashment to the drawee Bank and that the payee Bank acts as an agent of the payee/complainant for the purposes of presenting cheque in question to the dravvee Bank. necessary cor-ollary thereof is that no pa of cause of action for the offence punishable under Section 138 of the Nil Act arises in the Cour-t within the local limits of which the Bank of the complc:dnant i.e. payee Bank is situated and thus said Court has no jurisdiction to try a con'lplaint under Section 138 of the f\11 Act filed by the complainant.

¶28This takes me to the considel-ation of second question involved in the present case i.e. whether the court within local liirnits of which from where complainant had sent a notice under proviso

(b) appended to Section 138 of the 1\H Act is situated has the jurisdiction to try a .cor-nplaint filed under Section 138 of the Nl Act. CI'I.1Vl.C.i\lo.1056/2011 &. connected i:J3tter:; 0 age 22 of 27 2/t

¶29! have already noted the observations made by the · -- Supreme Court in Bhaskaran's case (supra) in the foregoin,9 paras and would highlight that in paras 17 to 23 the Supreme Court has reflected upon the limitation within which the notice has to be given to the accused. Supreme Court was considering the expression 'giving notice' in proviso '(b) to Section 138 of the r\H Jl1ct, with reference to the 15 days' time contemplated then by which the requisite notice had to be servr2d, which time is now 30 days.

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

(2009) 1 SC:C 720 Hannan Electronics Private Lilnited v National Panasonic India Private Li/nited is wortll noting on the subject.

¶31In Hannan's case (supra) tile question which had arisen before the Supreme Court was precisely the same .question which arises for consider-ation in the present petition i.e. whether tile court within! tl1e Hmits of whicll . . the place from where the compLa1ii'1ant had sent a notice'· contemplated under proviso (b) to Section 138 of the Act is sitwated has the jurisdiction to try a complaint filed under Section 138 of tile Act. AnswerinDJ the aforesaid question in tile negative, the Supreme Court observed as under:- "12 ...... The only question, therefore, which arises for consider-ation is that as to whether sending of notice from Delhi itseif would give rise to a cause of action for takingJ cognizance under the Negotiable Instruments Cd.M.C.No.1056/20H 8( connected matters Page 23 of27 ! ,1_

¶13It is one thing to say that sending of a notice is one of the ingredients for rnadnta,ining the complaint but it is another thing to say that dishonour of a cheque by itself constitutes an offence. For the purpose of proving its case that the accused had an offence under Section 138 of the 1\iegotiable Act, ingredients thereof are required to be proved. \IV hat would constitute an offence is stated in main provision. The ·proviso appended thereto, howe';rer, imposes certain further conditions which 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), (b) and (c)· appended to Section 13E: of the NegJotie!ble instruments Act are intended to be applied in favour of the accused, there cannot be any doubt that receipt of a notice wouild ultimately 9ive rise to the cause of action for Wing a complaint. As it is. only on receipt of the notice that the accused at his own peril may refuse to pay the a mount. Clauses (b) and (c) of the pmviso to Section 138 therefore must be read tog1ether. issuance of notice would not by itself ,gjive rise to a cause of action but communication of tile notice would . ... .... For constitution of an offence under Section 138 of the Act, tile notice rnust be received by the accused. may be oleemeol to have been ,-eceived in certain situations. The vvord "communicate" inter alia means "to 1Y1ake known, inform, convey, etc".

¶20.. ... t\ court derives a jur-isdiction 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. ;'J... distinction must also be borne in mind betV\r,een the ingredient of an offence and commission of a part of e offence.. .issuance of a notice by the hplder: _ _gf_QJJegotiable Cri.M.C.I\Io.1056/2011 & connected matters Page 24 of 2'1 ., Jt instrun!lent is thereof is also Only on a service of such notice and-failure on the part of tile accused to pay the demanded arnount vvithin a period of 15 days thereafter, cornrnission of an offence completes. _G_ivij19 of notice therefore, cannot over the service. It is only from that view of the matter tr1at in Daln7ia Cen7ent (Bharat) Ltd v, Galaxy Traders & Agencies Ltd emphasis l1as been laid on service of notice." (Einphasis Supplied)

¶32At a first blush re:adina of tlle C)lecisions of the Sur;n?.rne r' .. ,!J""'t t"n nf-.r-,c:D··-:Jr-,·,n J'-f""t-n-•;.::op'r r--::;cc.c \'·c,, <·r· LU i I . •. 1 _1U u/,c,./f::, _.JLqJII..A} 1l Ia strike to the r·eader that there a conflict between the two decisions lnasmuch C\5 rn Bhaskaran's case (supra) it was held that the expt-esslon 'giving of notice' occurring in proviso (b) to Section 138 of thf::• Act means 'sending of notice' whereas in Hannan.'s ca::;e (supra) it vvas held that the said expression means' recef,ot olnotice'"

¶33A reading of the tvvo decisions shovvs that there no confHct betvveen the said ck:cisions inasmuch as they ! l•ave IJeen rendered in different contexts. The decision in Bhaska_ran'.s case (supra) was rendered in the context of stal-ting point of lirnitation pei-lod of 15 days prescribed in provtso (b) to Section 13-3 of Uv::: Ni Act and was in tl-1at context i.e. the context of limitation that it was held by trre Supreme Court that expressiion giving of notic:::/ occun·ing in proviso (b) to Secbon1 138 of the N! Act means ·'sending ol' T!le decision in Hannan's case (supra) was rendered in the context of cause of action for filing a complaint under Section 1 "38 vvithirt1 jurisdic:bon of a 'I rl r'"t t' c l! I' d-f'" c·· 0· iJ 1'1 ci I n h, ;::l]-- r oJ. r) t p '• . .LI ;t ,;, I.,,- e l d h \1 tl.., e ;.._; ..... ·-· ... ; !, ;._,!,._.,t,. _,. w ... ii\JCJ..::'I ·I , LV.)' .,_,{ Cr!.IVI C.No.1056/211J.1 8t connec7ed mattus Page :zs ofn \ Supreme Court that tile expression giving ol notice' occurring in proviso (b) to Ser.=:tion 138 of the Nl Act 'receipt olnotice

¶34Now, same expression can have different meanings in different context as held by e Supreme Court in the decision reported as Majik L=Jj __ /)ifl.iutndar v Gouranqa Chandra Dey (2004) 12 SCC 448 wherein it vvas observed that a word occurri:-:g m a .statutory provisflon can have different mean i nos in d 1fl'erent context within the same -· statute.

¶35Thus,. the inevitable condu:sion would be that the 4th act contemplated as an ingredient of the offence as ilighlightecl in B/7askqran's case ii.e. 'giving notice in writing to the drawer of cheque' den?ano't:ng pay;nent of the cheque an?ount for purposes of limitation would have a meaning as explained in Bhaskaran's casr:: and for purposes of jurisdiction would have a meaning! as explained in /shar A!loJ!S case (supra).

¶36Before concluding ! De faiHng not to lodge a caveat. With bankinq and facility pl:lyabie at p;;:Jr of clearance provided by bankers and especially :n metropolitan cities, where cheques are cleared !Jy not being presented to the dravvee bank but at nodal branches of the concerned banks, the subject nnattel-of may have to be decided keeping in vi:evv that the drawee bank ha.s created an agency where the cl1eque in question is t c-·;:l 'Vn ,- ('·l·· e ""'' d t+1p r:1+11 •c; ·\N1!lC:H"'t:' ·the p·=> r-, ll(P _J .... A l· L ........, 1 \... t... r: • ...J. • 1 , :J L li 1. _. L ,_ ·I .... ........ __ . __ • c1. ... _ tal<es place would arDuably become tile pLace vvher:2 Crl.M.C.No.1056/2.iJ11 8t conn2cted matters Page Z6 of 27 ! -- 'I " If:' '1' . :. I' ,II . -_,__ ;)2/ the cheque woulcl be requit-ed to be treated as presented tp 'the bank' i.e. the di-awee bank. But, in such circumstances, constituted have to be found in a complaint and lodging the caveat, i leave it at that for the debate to be properly argued in an approprrate case with the necessary relevant pleadinQJs.

¶37i hold that on the pleadings in the complaint(s), no part of cause of action can be said to have accrued to the corr1plainant at Delhi; that tile notice demanding paym::nt 'Nas posted rn Delhi and that the cheque vvas deposited with the payee bank at Delhi ·would not constitute the acts contemplated as inQJredients of an offence punishable under Section 138 Ni Act and thus i dispose of the petitions quashing theimpugned order(s) dated 14.2.2011 and direct " ' learned 11\CMM to return tile complaint(s) to the respondents for filing in a Court having territorial jurisdiction.

38.. No costs. SEPTEMBER 21, 2011 mm Cri.M.C.No.1056/2011 & connected I!FJtters ,_ r,, ... _-: ... \·- ,.(_': (PRADIEEP NANDHAJOG) JUDGE Page 27 cif 27

> * IN THE HIGH COURT OF DELHI AT NEW DELHI % /udqment reserved on: JtJh September, 2011 /udqment pronounced on: 21st September, 2011 + CRL.M.C. 1174/2011 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 19. Whether the Reporters of local papers may be allowed to see the judgment? 20. To be referred to Reporter or not? 3. Whether the judgment should be reported in the Digest?