M/S Religare Finvest Ltd v. State & Anr

3& % 27.05.2009 Present: Mr.Vijay Aggarwal, Adv. for the petitioner. + CRL.REV.P.NO.N0.149/2009 Learned counsel for the petitioner wishes to withdraw this petition, however, prays that this matter being the lead matter, file of this matter be tagged with Cri.Rev.P.No.166/2009. Dismissed as withdrawn. Let the file of this matter be tagged with C rl. Rev. P. No .16 6/2 00 9. ____6>-.C.~

G.S. SISTANI, J. May~, 2009 'ssn' Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. * Il\1 THE HIGH COURT OF DELHI AT NEW DELHI + ~CIRL!RIEV.P.179/11Dl1Dl9, 166/20109, 169/2009 <OJn-Dd 111/21Dll!]9 Decided on 23.09.2010 IN THE !VlATTER OF : M/S REUGARE FINVEST LIMITED ..... _P~titionet~ Thmugh: Mr. Vijay Aggarwal, Advocate wtth Mr.Gurpreet Singh, Mt·.Manoj Taneja and Mr. Amit Shrivastava, Advocates versus STATE AND ANR. ..... Respondents Thmugh: M!-. M.I\J. Dudeja, APP for the State. Mr. Buddy A: Ranganadhan, Advocate fot~ R-2 in Crl. RP-179/2009. ·--~

¶1\Nhether Reporte1·s of Local papers may be allowed to see the Judgment?

¶2To be referred to the Reporter or not?

¶3Whether the judgment should be r<:ported in the Digest? ---·-·· j HU~A t<OHli, ]. (Ora[] 1 .L. This common ot·der shall dispose of the petitions filed by Uw petitioner as the facts of these cases are identical and 1·aise common question of law. F-or the sake of convenience, facts of Cri.Rev.P.I\Jo.l79/2009 are being

¶2The present petition is filed by the petitioner undet~ Section 39~' read with Section 401 of the Cr.PC, against the judgment d~ted 09.03.200SI passed by the learned Metropolitan I'VJagiscrate in a compiaint casE~ No.106/.l/2009 '.inder Section 13S of the 1\legociable Instruments Act, 188:: (hereir;a ftc:r '·efeiTt:d to as 'it: he Act') holding inte;· afia that the cou1·t dtd no·c have t!·tc tcrrir_oi--icll JUr-isdiction to 2iltertain the comolaint and retuming the ' CHL.REV.P. 179_120[!9 P':o1ge 1 of 18 same to the complainant/petitioner, for being presented before the court having territorial jurisdiction to try the same.

¶3It is. averred in the complaint petition that the petitioner/complainant is a public limited company ha\(ing its registered anci corporate office at New Delhi and is dealing with the business of providing its customers vMious types of loans. It is further stated that the respondent/accused availed loan facility from the petitioner/complainant but the account became irregular. Towards discharge of part of the debts, the respondent/accused issued cheques, which when presented by the petitioner/complainant to its bankers namely, HDFC Bank Ltd., Connaught · Place, New Delhi, were returned unpaid by the bankers of the accused under the return memo dated 29.12.2008, with the remarks, "insufficient funds". The return memo was received by the petitioner/complainant at Delhi. In para 4 of the complaint, it is stated that the aforesaid cheques wer-e submitted by the respondent/accused at the corporate and registered office of the complainant/petitioner. Thereafter, a legal demand notice was issued by the petitioner/complainant to the respondent/accused from Delhi, duly dispatched on 14.01.2009. As the respondent/accused failed to make the payments of the cheque amount, demanded through the legal notice within the stipulatecl period, the petitioner/complainant filed the aforesaid complaint before the / / court of the learned Metropolitan Magistrate. The impugned order came to be passed at the pre-cognizance stage. In other words, notices wer-e not issued on the complaint to the accused and instead, tile complaint was returned at the pre-summoning stage by the learned Metropolitan Magistl-ate to the petitioner/complainant for want of territorial jurisdiction.

¶4Counsel for the petitioner/complainant submits that the learned Metropolitan IVJagistrate erTed in arriving at the conclusion that his Cour-t did CRL.REV.P. 179/2009 not have the te 1-ritorial jurisdiction to entertain trre complaint. He states that a perusal of the complaint itself indicates that part of the cause of action arose, in Delhi, and the following acts were done in Delhi:-

5.

(i) That the registet-ed and corporate office of the petitioner/complainant is at New Delhi.

(ii) That the cheques wet-e submitted by the respondent/accused at the corporate and registered office of the complainant/company situated at Delhi.

(iii) That the petitioner/complainant pt-esented the cheques for encashment to its banker situated at Delhi.

(iv) That the cheques, upon being dishonoured when presented to thE:' bankers of the respondent/accused, we,-e ,-eturned to thE:: petitioner/complainant through its banket-sat Delhi. I

(v) That the legal notic(i; was dispatched by the petitioner/complainant to the respondent/accused from· Delhi. Counsel for the petitioner/complainant submits that while passing the impugned order, the learned Metropolitan Magistrate· misinterpt-eted the judgment of the Supreme Court in the case of M/s Hanllan Electronics Pvt. Ltd. vs. M/s National Panasonic India Ltd. reported as 11DJ09J n AID SC 11. He states that the aforesaid judgment was in fact not applicable to the facts of the present case. It is further stated that the judicial pronouncement in the case of K. Bhaskaran vs. Sankaran Vaidhyan Balan and Anr. ,-eported a:;

(1999) 7 sec 510 still holds the field and has not been watet-ed down bv any of the subsequent decisions on the point of ~erritorial jurisdiction. Rather, if the subsequent decisions down the years al-e perused, the case of .L Bhaskaran (supra), remains the fountainhead and has been ,-eiterated from CRL.REV.P. 179/2009 time to time. It is further urged that the c;spect of ten-itorial jurisdiction ought not to have been gone into by the learned Metropolitan Magistrate at the pre-summoning stage, and the said aspect could have been considered and decided either ways, even after cognizance was taken.

¶6In support of his submission that the averments contain'ed in the complaint petition prima faCie revealed that it was maintainable within thE~ territorial jurisdiction of Delhi, counsel for the p~titioner relied on the following) judgments: l__r

¶7i. K. Bhaskaran vs. Sankaran Vaidhyan Balan and Anr. {1999) 1 SCC ii. Trisuns Chemical Industry vs. Rajesh Agarwal and Ors. {1999) 8 SC\C 16i816i. iii. Alchemist Ltd. vs. State Bank of Sikkim, (J!.((]l((flJ 11 SICC 335i iv. Smt. Shamshad Begum vs. B. Mohammed 2.008 (13) SCAILIE 16i69l v. Rajiv Modi vs. Sanjay Jain V (21009) SIL u 72.5 vi. Religar-e Finvest Limited vs. Sambath Kumar A (2.10lUllr JOC (NE) vii. Patiala Casting P. Ltd. & Ors. vs. Shushan Steel Ltd. 210l10 JIV A[.l

(CRlL)(DHC) 266. Per contra, counsel for-the respondent supports the impugnec'i judgment and submits that the same does not deserve interference. HE: states tha.t in the pr-esent case, the distinction between the term, "cause of action" and "offence" must be understood. He relies on the provision of Section 142(b) of the Act to urge that the aforesaid orovision alone deals with the issue of cause of action and that the proviso (c) to Section 138 of the Act postulates that the said Section would not apply until the dr-awer of the CRLREV.P. 179/2009 cheque fails to make payment of the amount to the holder in due cour-se of the cheque, within 15 days of the receipt of the said notice. He, therefor-e, submit~. that the location where the major part of the cause of action ar-ises/ ., i.e., the place where the cheque on presentation, is dishonoured has to b(~ examined for deciding the issue of territorial jurisdiction. To fortify his submis~;ion that tile offence under Section 138 is completed only on non-payment of the amount, as contemplated in proviso( c) and the locality wher-e the· drawer· fails to make the payment within 15 days of the receipt of th~; notice, is of primary consideration, he relies on the following judgments: i. Shri Ishar AlloY Steels Ltd. vs. Jayaswals NECO Ltd. 21(])01 (3) ii. ICICI Bank Ltd. vs. Subhas Chand Bansal 161(]) (21(])1(])9) Dllr 379 iir. · Achintya Mandai vs. Chaitanya Aqro Products & Ors. 21(])1(])9 (11(])8) DRJ 4'J'1 iv M/s Har-man Electronics Pvt. Ltd. vs. M/s National Panasonic Indic.L Ltd. 2.009 H AD SC 2.1

¶8In the case of K.Bhaskaran(supra), the question of terTitorial jurisdiction of the ~~agistrate's Court situated at Adoor in Pathanamthitta District in the State of Kerala, to try the case under Section 138 of the Act. was under consider-ation wher-e, the cheque was dishonour-ed in another-District in the State of Kerala. The learned Magistrate held that the cour-t did not have the territrxial jurisdiction to try the case as the cheque was dishonoured by the branch office . of the complainant/bank situated in a different District On an appeal preferred by the complainant before the Hig~l Court of Kerala, the Single Judge accepted complainant's version that the cheque was issued within the territorial limits Qf the trial court's jurisdiction CRLREV.P. 179/2009 / and reversed the orde 1-of the Magistrate. Aggrieved by the order of the High Court, the appellant/accused. approached the Supreme Court. Wllile dealing with tile submissions of both the parties on the question of territot"ial jurisdiction, the Supreme Court observed as below:- "11. We fail to comprehend as to how the trial court could have found so regarding the jurisdiction question. Under Section 177 of the Code "evet-y offence shall ordinarily be enquired into and tried in a . court within whose jurisdiction it was committed". lrlhle ~oca~i1ty where the lb;o:u11k (which dlnsho~n~muedl the cheque) us si\t:uafceidl Glllnllf110t lble rregara:!leldl iaiS the soh~ cri'lteu-nolf11 to determn!f11e the place of o~'fell1lce. U mtusit lble remembered that o1F1Fe1Tllce u~n~dler Section 138 woiUlijdi 11'110it be comJPlle1J::edl wntlhl the dlusho~n~ouu-of tlhle d11eque. n aUai~n~s complettiou11 oiTllly wiit:lhi the failllllre of the dlrawer of tlhle dhlieque to piai'V 1tlhle cJueque amoull1lt wiU11nll1l tlhle expiry 101f 15 days melf1lit:DIOI11'11edl in Clause (c) 101if tlhle proviso t101 Secft:iiOIITll 138 of tlhle Acit. H: is ll1lormally dlif1ficul11: to fix o.np a particular locality 01s tlhle liJilace olf failure t!:o pa1y il:lhle amou!f11t covered! lby it:he cheqJwe, A place, for U11at plUlriPJose, wouldl ldle!PJell1ldl tutpolnl a variety of factors, n can eitlhler be ait the !PJIOice wlllere tlhle cdlr<:nwer residles or 011!: U11e place where tlhle payee resides or at tlhle place when·e eitlhler lOlf tlhtem carrnes oll11 lblusnll1less. Hence, the difficulty to fix up any particular locality as the place of occurrence for the offence under Section 138 of the Act.

¶12Even otherwise the rule that every offence shall be tried by a court within whose jurisdiction it was committed is not an unexceptional or unchangeable principle. Sectnoll11 177 itself lhl<:ns beem framed! by the legisl.atm·e itJ1loiUlglhl1tfully ; ~y usi1111\9J itlhte pn!catutuomuy "fOD"idl ~'ondlnll1laruiy" ito u~n~dlk011te ltlhlatt il:he n.Jlle is not ill1lvaria11bie ill11 a~~ cases. Sectioll1l :ll.78 o1f itlhle Codle suggests itlhat uf ithe~e us unceriti3lnH11t'lf as tto where, among dliffeu-e~n~ii: iocalitnes, the of1fe1111ce wou!dl frltave bleell11 commuUedl tlhe ittria~ ca1111 be lhladl ill11 a ClOlutrt frltavingJ ]urisdlictioll11 over Olll1l'lf of tlhlose ~ocanltues. The provision has further widened the scope by stating that in case where the offence was committed partly in one local area and partly in another local area the court in either of the localities can exercise jurisdiction to try the case. fFw·tfrltetr <:ngcdlill1l, Sectuon11 179 tOJf itlhie Cocdle sitretcclhtes nits scope to a stm wndler fr1tornzoll11. It reads thus: CRLREV.P. 179/.2009 !P'aJ~N 6 of 18 1/ "179. Offence triable where act is done or consequence ensues - When an act is an offence by reason of anything which has been done and of a consequence which has ensued, the offence may be enquired into 01-tried by a court within whose local jurisdiction such thing has been done or such consequence has ensued."

¶13The above provisions in the Code should have been borne in mind when the question regarding territorial jurisdiction of the courts to try the offence was sought to be determined.

¶14Tlhe offeiJ'ilce IUirndler Sectuon 138 of it:fhie Act c;am be comJPietedl orn~y wliith the coll1lcaiteflla1tim1l of a l!ll'l.llmber of acts. The' ifo~~owillllg are 1tfr1le acts wfhind11 are compol!llenits o"f it:lhle sand! ([])f'lfellllce: {1) dlrawnllllgJ of tlhie: cfrlleqll.lleff {2) JPreserntcntt:umll ([])f Une cillleq!Jle to il:frlle b~mlk, (3) reitllrliliDB"il\91 the cfhieqpUie !UlllllJPlandl /by the drawee bank, ( 4) !9]iVillllg llll01l:ke illll wrntt:n1111g it([]) il:lhle drawer ([])f 1tfhie d11eqiLlle demcnlllldlillllg [p)a)fmel!llit o1f itlhle chlequte am([])!Jlllllit, (5) fai~!Jlne ([])f itfhie dra1wer \to make payme11111t wntilllnlf\1 15 days of \the. receipt of the IJlloitke.

¶15n us llllot necessary it:lhlait a~i tlhle albove five ac!t:s shou~dl have been JPlerJPeitlrate([]] ait tll1e s<a1me ~ocam:y .. n us possnbl~e itlhiait eaclh «:»f 1tfr1lose fhre <a1cts coiUI~d be dloliile at 5 dliffereliilit ~ocaWtnes. But concatenation of all the above five is a sine qua non for the completion of the offence uni:::/er Section 138 of the Code. In this context a reference to Section 178(d) of the Code is useful. It is extracted below: "178. (a)-(c)

(d) where the offence consists of several acts done in different local areas, it may be enquired into or tried by a court having jurisdiction over any of such local areas."

¶16Tfhi!Uls it is dear, if il:frlle five diifferellllit: acts·were dlo111e uliil five dlufferelllt ~ocaWties ;amy orne of itfhie coiUirits exerdsurng jiLllrTisdlicitiiD)[J1 nrn oliile of the five ~oca~ areas cam become it/hie JPiace of tria~ for tfrlle offellllce ILlllllldler SectDiom 138 of 1tfhie Aclt. In other words, the complainant can choose any one of those courts having jurisdiction over any one of the local areas vvithir1 the territorial limits of which any one of ·those five acts was done. As the amplitude stands so widened and so expansive it is an idle exercise to raise jurisdictional question regarding the offence under Section 138 of the Act." (emphasis added) \. CRL.REV.P. 179/2009

¶9The aforesaid judgment thus· clarifies that the five essential ingredients for completing the offence under Section 138 of the Act are as below:-

10.

(i) ( i i)

(iii)

(iv)

(v) Drawing of the cheque, Presentation of the cheque with the bank, Returning of the cheque unpaid by the drawee bank, Giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, and Failure of the dt-awer to make payment within 15 clays of tile receipt of the notice. The aforesaid judgment was echoed by the Supreme Court in the case of Smt. Shamshad Begum (supra), wherein it was reiterated that:

¶11"8. H: llS IT110it UlliECessary itlhtait it:Jhte albove f'Dve <aiCltS slhlolUlid i11ave been perpetrated! att tlhte same iocaiuity. n is possilbie ltlhtat eaclhl of ttlhtose five acts colUlid be done at five diififetretnrt iolt::a:diitnes. IBIUlit co!l1lcaitel!1lail:Do!f11 tOlf aii it:lhte albltOlve ifive is snlllle [jjlUla llliOilll for ctOlmpietion of itlhle tOlfiFemce m11dler Sectnotnl 138 of tlhie Act." (emphasis aclcled) In the case of Trisuns Chemical Industry (supra), while examining the judgment of the Gujarat High Court, passed in a t-evtston petition, wherein, it was held that a perusal of the complaint filed before the ·trial court showed that there was nothing to reflect that any part of the transaction took place within the territories of the State of Gujarat and the Judicial Magistrate, Ganclhidham ought not to have taken cognizance of the matter and ought not had directed i~suance of process, the Supreme Coun: held that the Magistrate erroneously assumed that fot-the purpose of taking cognizance of an offence, the Court must necessarily have the tetTitot-ial jurisdiction to try the case as well. Advet-ting to Chapter XIII of the Code of CRL.REV.P. 179/2009 Pi31ge 8 of 18 j Criminal Procedure, relating to "Jurisdiction of Criminal Courts in Enquirie~(S) and Trials", the Court held that the jurisdictional aspect becomes relevant only when Ule question of enquiry and trial arises. In this regard, reference may be made to the following observations: "13 .......... Therefore, when there is nothing in Chapter )(IV of the Code to impair the po'wer of a Judicial Magistrate of the First Class taking cognizance of the offence on the strength of any ten-itorial reason it is impermissible to deprive such a Magistrate of the power to take cognizance of an offence - of course, in certain special enactments special provisions al-e incorporated for restricting the power of taking cognizance of offences falling under such acts. But such provisions are protected by non obstante clauses. Anyway this is a different matter.

¶14The jn.uns1Cilnctioll1la! aspect becomes H';~ev«:mil: oll1liy wlhlell1l tlhle questnolil of ell1lqll.llnry or trnall arises .. Iil: ITS tihlereif«:me a fa~lladOIUIS itihJDll1ikHil1lg) \l:lhJail: Oll1llly OJ !Vilag~nsitratl:e ll11avilhig ]urnsdlictil[m to try Une case ihlZJs tlhle power to ta!-ce cogll1lizance oif 1tlhle of1Fem:e. Jif lhle is a ~Vilagnsfcu·ate of the first Cllass lhlns power it([] take cognuzalll1lcre oif 1l:lhle offence is noit: impa~nredl ~Y ten·nil:oriall restrktnolfils. After ta~<ing OO)(g)ll1liZZJil1lOE! lhle may lhlave to dledde as to the court wlhlkh ll1J<ais jurisdiictnon 1l:o eriqlllnre i1111to or tqr U11e oHell1lce ami! tllllait snitlUiatfion wm.n~di reach oll1lly dluri1111g 1l:lhle posil:-· C0!9Jillln:z:a1111ce stage a1111dl not ea1rlluer." (emphasis added)

¶12In the case of Rajiv Modi (supra), the Supreme Court formulatecJ the following question for consideration:- "10. The issue before us is, whether the High Court under Section 482 Cr.P.C. was justified in quashing the complaint on the ground that no cause of action has arisen in Patna in respect of the alleged offences Under the provisions of IPC.

¶11The learned Counsel for the appellant would submit, that, the cognizance stage and the trial stage are two different aspects of criminal jurisprudence and under the Code, there is no territorial restriction fo1· any Magistrate to take cognizance of an offence although at the stage of trial, the said issue may become relevant in v.iew of the provisions of Chapter XIII of the Code. The Counsel would also assert that CRL.REV.P. 179/2009 Pau:;;e 9 of 18 Section 177 of the Code relating to the jurisdiction of the Criminal Courts do not trammel the powers of any Court to take cognizance of the offence and thus, would apply to Sections 190 and 200 as well ......... .

¶12In order to appreciate the jurisdictional aspect, it would be relevant to discuss the meaning of the expl-ession "cause of action". This Court has laid down that the cause of actio[} is a fundamental element to confer the jurisdiction upon any Court and which has to be proved by the plaintiff to suppol-t his right to a judgment of the Court. It is relevant to take note of what was stated by this Court in State of Bombay v. Narottamdas Jethabhai, 1951 SCR 5L In this case, it is observed that the jurisdiction of the Courts depended in civil cases on a "cause of action" giving rise to a civil liability and in criminal cases on the commission of an offence, and on the provisions made in the two Codes of Procedure as to the venue of the trial and other relevant matters."

¶13After taking into consideration a cat;::~na of decisions on the point of "cause of action", while tracing the decisions starting from the year 1950'5; right upto 2009, including judgments rendered in the cases of State o;~ Bombay vs. Narottamdas Jethabhai, 1951 SCR 51; State of Madras vs. V.P. Agencies, AIR 1960 SC 1309, Gurdit Singh vs. tvlunsha Singh,. (1977) :lL SCC 791; State of Rajasthan vs. Swaika Properties, (1985) 3l SCC 217; ONGC vs. Utpal Kumar Basu, (1994) 4 SCC 711; Bloom Dekor Ltd. vs._ Subash Himatlal Desai, (19914) 15 SCC 322; Rajasthan High Court Advocates' Assn. vs. Union of India, (2001) 2 SCC 29J4; Y. Abl-ahan'"i Aiith vs. Inspector j of Polic~ (2004) 8 SCC 100; and Alchemist Ltd. vs. State Bank of Sikkim,

(2007) 11 SCC 335, the Supreme Court crystallized the law as follows:- "22. H: is evidierrlit from ii.Jile aibJOVIE dJedsDOII1lS1 itlhiait, ito coUllsi!:utlUite itlhe terdtoria~ ]lLllll"'isdlndioUll, itlhe wlhio~e or a part of "caUise oif actnon11" milJsit lhave ariseUll withill1l tlhe terrntoria~ jm·rrsdlktnon of i!Jne Cm.nrt all1ldl the same must !be deddledl oUll Uue lb01sis 10Jf U11e averme1111ts madle illll tlhle comp~ialiUllt witlhiiOJillit embialrkung IUIIJJOI!ll an ill11qlllliry ialS to tlhie corn-ecitD1less Or IOJitlhierwise oif tlhie Sialndi fad." XXX XXX XXX CRL.RE\I.P. 179/2009 Pa~ge 10 of 18

¶29!!!1 view o·f the albove prin-udp!es, the ColUrrit O!fl basns oif the averments made n!fl tfrlle comp~aimrft:, nif ut us prima facie o·f tfrlle opn!!lnon-u il:lhlait tlhle wlhlo!e or a part of call.llse of ac1tio1111 lhlas arnsemJ nDll nits · jrLuisdlktionv nil: earn certaolf1lly tal<e coglf1liZaiiTllce of i!:lhle comp!aolf1lt. Tlhere is lf1lO need! to ascerritO:UUITll tilJ;arlt · tlhle ai!!egaticms made are tr\Ule nu11 ~'ad." (emphasis added)

¶14The attention of this Court has been drawn to the two recent decisions of Single Benches of this Court in the cases of Religare Finvest Limited vs . .Sambath Kumar A reported as (2.010) JCC (rNII) 266 and Patiala_ ;Casting P. Ltd. 8l Ors. vs. Bhushan Steel Ltd. reported as 2l!JJ1l!JJ IV AD

(CRl)( DHC) 2615. In both the cases, the Single Benches noticed the judgment in the case of Harman Electronics· (supra), and held that mere sending of notice from Delhi would itself not give rise to a cause of action irl Delhi, for taking cognizance under the Act and the said act ought to be accompanied by some. other act(s), for vesting territorial jurisdiction in a particular court. In the case of Religare Finvest Limited (supr-a), the Single Judge crlso considered the judgment in the cases of Mosaraf Hossain Khan vs. Bhagheeratha Enqq. Ltd. reported as (2.1[)((])6) 3 SCC 658 and Lok Housinq and Constructions Limited vs. Raghupati Leasing. and Finance Limited and Anr. reported as lilJIDl (2002) Dl T 38 to hold that a icomplaint under Section 138 of the Act could be filed in any of the five local areas where any of the five different acts constituting the offence under Section 138 of the NI Act were clone. The judgment in the case of Delhi High Court Legal Services Committee vs. Government of N.C.T. of Delhi reported as 116i3l (2009) DlLT 515 was also distinguished by holding that the same had no application to the facts of the said case as the· said judgment directed return of complaints in cases, in which Delhi courts did not have territorial jurisdiction to tr-y the complaints. It may be noted that the afor-esaid judgment is stated to have been taken in CRL.REV.P. 179/2009 appeal to ·. . . . . ;@~>/ . . ·~ the Supreme Court and status quo WiJS ol-dered to be mamtamed \ until further orders and the matter has been directed to be posted befo,-e a, three Judges Bench. It is stated that the said matter is still pending disposal.

¶15As regards the submission of the counsel for the respondent that territorial jurisdiction vests in a Court in whose jurisdiction, the major portion of the cause of action arises, i.e., the locality where the bank of the accused which has dishonoured the cheque is situated, the Supreme Court has clarified in the case of K. Bhaskaran (supra), that the locality where the bank of the accused which has dishonoured the cheque, is situated cannot be regarded as I > the sole cl-iteria to determine the place of offence and that a place, for the purpose of invoking the provisions of Section 138 of the Act, would depend on a variety of facts. Pertinently, the term used by the SUpi-eme Cou,-t in thE aforesaid case for coml]leting the offence und~r Section 138 of the Act is "acts" and not "cause of action" .. The said position emerges cleal-ly from a bare reading of paras 11, 14 and 16 of the afol-esaid judgment reproduced hereinabove. Therefore, this Court is not inclined to agree with the submis~;ion of the counsel for the respondent that the major portion of the cause of action in the present case arose only after the cheque issued by the respondent/accused was forwarded by the banker of the petitioner/complainant to the banker of. the accused, and where, on .J presentation, the cheque was dishonoured, which in the p!-esent case, is situated not in' Delhi, but in Pune.

¶16It is clear from the provision itself that an offence under Section 138 would not be completed with the dishonour of the cheque . Rather, i 1~ attains completion on!y with the failure of the drawer to pay the cheque amount: within the expiry of the fifteen days after the legal notice is served upon tr1e drawer of the cheque/s whose chequejs have been dishonoured. As I CRL.REV,P. 179/2009 ~ ~~ noted above, the offence under Section 138 of the Act can be completed only ~ with the concatenation of a number of acts, the acts being, drawing of tile cheque, presentation of the cheque with the bank, retuming of the cheque unpaid by the drawee bank, giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, and failure of the drawe,- to make payment within 15 days of the receipt of the notice. It is not essential~ i ·that all the acts should be committed at the same locality. It is quite possible that all the five acts are perpetrated in five different localities. In such a situation, any one of the courts e)(ercising jurisdiction in one of the fivE' localities can become the place of trial for the offence under Section 138 ot' the Act. At the stage of entertaining a complaint under Section 138 of, the Act, the Court is only required to arrive at a prima facie opinion as to the ten·itol·ial jurisdiction, on the basis of the averments made therein, without launching into a fact finding mission as to their correctness or otherwise.

¶17Hence, the contention of the counsel for the ,-espondent that non-payment of cheque amount under Section 142(b) of the Act alone can give ( rise to a cause of action for an offence under Section 138 of the Act and it is the "cause of action", which has to be seen and not "the act", is found to be untenaiJie and turned down. The five acts mentioned in the aforesaid judicia! dicta were clearly spelt out and the Supreme Co'urt further clarified that each of tho::;e five acts could. be done in five different localities. This woulc! naturally mean that the act of presenting of the cheque by the complainant where he is situated, could be in a different city from where the accused and his banker is situated.

¶18The argument of the counsel for the respondent that in the case of Shri Isllar A!loy Steels Ltd. (supra), the Supreme Court had clarified that the words, "a bank" and "the bank" ill Section 138 of the Act are an indication of CRL.REV,P, 179/2009 /' / J the intention of the legislature and that since both "a bank" and "the bank'' deal with the banker of the accused, the aspect of territorial jurisdiction has tc . . be examined in the said context, must be considel-ed in the light of the issuE. before the. said Court. In the aforesaid case, the issue, which engaged the Supreme Court was set out in para 2 of the judgment, which reads as below: ''2.(a) What is meant by, "the bank" as mentioned in clause (a): of the proviso to Section 138 of the Negotiable Instruments Act, 1881?

(b) Does such bank mean the bank of the drawer of the cheque or covers within its ambit any bank including the collecting bank of the payee of the cheque?

(c) To which bank the cheque is to be· presented for the purposes of attracting the penal provisions of Section 138 of the Act?"

¶19It is therefore quite apparent that the aforesaid judgment did not deal with the issue of territorial jurisdiction at all. Rather, the focus was ori the meaning of term, "tile bank", as mentioned in clause (a) of the proviso to i Section 138 of the Act and whether such a bank would take within its fold an} bank, including the collecting bank of the payee of the cheque, fol-the purposes of examining the validity of the cheque under the Act. It is settled law that a decision is not an authority for a proposition which did not fall for its con5;ideration. Hence, the aforesaid judgment cannot be said to 1 have 21 ' bearing on the issue of territorial jurisdiction to entertain a complaint by a particular court.

¶20In the case of Harman Electronics (supra), the Supreme Court particularly noted in pal-as and of the judgment that tilE~ complaint/petition did not show that the cheques were presented at Delhi ancl rather, the petition was completely silent on tl-.1at aspect. Having regal-d to the facts and circumstances of the aforesaid case, where it was observed tha;: CRL.REV.P. 179/2009 ~@ the parties had .been carr-ying on business at Chandigar-h, ~w· ~,\,. the transactions · took place at Chandigal-h, the cheques were issued and presented at Chandi~Jarh, the Supreme Court had observed that it had no option but to presume that the dheques were also presented at Chandigarh and dishonour of the cheques took place at Chandigarh and hence, mere sending of notice from D(~/hi itself would not give rise to a cause of action for taking cognizance under the Act. In the present case, mere issuance of a legal notice by thE petitioner/complainant from Delhi alone is not the sole basis fol-filing thE;: complaint in the terr-itorial jurisdiction of Delhi .. ·As noted in para (3) above; there vvere tertain other acts, which we!-e done within the territoria jurisdiction of Delhi, for-invoking Delhi jurisdiction.

¶21Apart fr-om the aforesaid judgments, counsel for the respondent relies CJn the decisions of two Single Benches of this Court in the cases of ICICI Bank Ltd. (supra) and Achintya Mandai (supra) to urge that the learned Metropolitan Magistrate had rightly returned the complaint to the petitioner: for want of terr-itorial jurisdiction. A perusal of the aforesaid judgments shows th.at reliance was placed on the judgment in the case of Harman Electronics (supra) to hold that the IVlagistrate was right in retur-ning the complaint petitions. But the fact position of both the cases are entirely different and distinguishable from the· instant case. In the case of Ach intya Manda;. j {supra), the leal-ned Single Judge observed th~t the only single fact of the statuto:-y notice being dispatched from Delhi formed the basis of filing thft! complaint in Delhi and that alone could not vest territorial jur-isdiction or~ Courts in Delhi. In the case of ICICI Bank Ltd.(supra), it was observed that the respondents were residing outside the terr-itorial jurisdiction of the trial court and the bank of the respondent was beyond the territorial jurisdiction o{ the triai court. However, there is no mention in the said judgment as to the. CRL.REV.P. 179/2009 ~-/~ location, where the other acts mentioned in the case of K. Bhasl<aran (suorc3) ~ were done. In this view of the matter, neither of the two judgments can bE~~ stated to be applicable to the facts of the instant case. . .

¶22With respect to the submission of the counsel for the respondeni: that cause of action has to be considered i~ the context of substantive law viz-~ a-viz procedural law, it may be noticed that Section 4(2) of the Cr.P.C: postulates that all offences under any other law shall be investigated, inquil-ecl I into, tried and othel-wise, dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner 01-place of investigating, inquiring into, trying or otherwise dealing with such offences. Section 5 of the Cr.PC,-which is the saving clause, stipulates that nothing contained in the Code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure. prescrilJecl, by any othel-law for the time being iil force.

¶23In the present case, the Negotiable Instruments Act is the i substantive statute and the procedural aspect of filing of the complaint, ancl dealing with the procedures to be followed by the trial court thereafter are all governed undel-the procedural law, i.e., the Code of Criminal Procedure. Hence, reference to Chapter XIII of the Code of Criminal Procedure, which I ~deals with jul-isdiction of Cl-iminal courts, is but natural. Section 177 relates to ordinary place of inquiry and trial, Section 178 relates to place of inquiry or· trial and Section 179 relates to offence triable where act is done 01-consequence ensues .. All the aforesaid three provisions have been particularly explained by the Supreme Court in the case of K. Bhaskaran (supra), as noted above. Therefore, reading of the Negotiable Instruments Act in isolation dehors the procedure prescribed in the Cr. PC, for dealing with the filing of thE;:~ CRLREV.P. 179/2009 :_ @ complaint and the manner of proceeding with the complaint, is neither t:B possible, nor per-missible.

¶24As discussed above, the Magistrate taking cognizance of an offence must not necessarily have the territorial jurisdiction to try the case as well. Only when an enquiry or-trial begins, does the jur-isdictional aspect become relevant. Infact, after taking cognizance of the offence, the Magistrate may have to decide as to which cour-t would have the jurisdiction to enquire into the case and such a situation can arise only during the post- ' cognizance stage. At the pre-cognizance stage, the Magistr-ate has only to examine the averments, as set out in the complaint and not more, for prima facie arriving at a decision as to whether some of the acts essential for.- completing an offence under Section 138 of the Act were done in the territorial jurisdiction of that Court.: In the present case, having per-used the complaint filed by the petitioner/complainant without ascertaining the correctness of the allegations made therein, prima facje it has to be held that a part of the cause of action has arisen in Delhi and the same is not based solely on the issuance of a legal notice by the petitioner/complainant to the respondent/accused from Delhi, but some other acts done prior thereto, as set out in para (3) hereinabove.

¶25From the aforesaid facts and circumstances, there appears no _/ ambiguity on the aspect of the right of the petitioner/complainant to file a complaint in a Court having jur-isdiction in the context of the five act~·, mentioned in the case of K. Bhaskaran (supra). Jn the present case, as noted above, a substantial part of the cause of action for filing of the complaint b\r ·the petitioner/company against the respondent/accused under Section 138 of the Act! prima facie appears to have arisen within the jurisdiction of the cour-ts in De/lli. · However, it is clarified that. if after taking cognizance, the CRL.REV.P. 179/2009 respondent/accused is able to place such material facts on the record which demonsuate that the Courts in Delhi do not have the territorial jurisdiction to entertain the complaint, the learned Metropolitan IVJagistrate sh.all still have a free hand to ascertain the truth of the allegations made by the petitioner/complainant and aiTive at a different conclusion.

¶26The present petitions are therefore allowed and the impugned · order is set aside. The case is remanded back to the trial court with directions i:o proceed further and deal with the complaint of the petitioner un.der Section 138 of trle Act, in accordance with law. The petitioner shall appear before the learned l'-1etropolitan IV!agistrate on 18.10.2010 at 2:00PM.

¶27A copy of this order shall be forwarded by the Registry forthWith to the tria I court for information. SEPTEMBER 23, 2010 "'-'rkb CRLREV.P. 179/2009 (HIMA KOHLI) JUDGE Pa~ge 18 rof 18