To attract the criminal liability of the drawer of the cheque, the collecting bank is obliged to present the cheque in the drawer’s bank and the Courts where the collecting Bank is situated on this ground itself will not have jurisdiction to entertain the complaint

IN  THE  HIGH  COURT  OF  DELHI  AT  NEW  DELHI
SUBJECT : NEGOTIABLE INSTRUMENTS ACT, 1881
Date of decision: 15th January, 2013
CRL. REV. P. 65/2012
M/S. GEE PEE FOODS PVT. LTD. & ORS.                    ..... Petitioners
Through: Mr. Ranjeet Kumar Jaiswal, Adv. with Mr. Sheo Kumar Singh,
Adv.
versus
SH. DIGVIJAY SINGH      ..... Respondent
Through: Respondent in person.
     
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
J U D G M E N T
G. P. MITTAL, J. (ORAL)
1. The question that falls for determination in this Revision Petition is,
“whether a complaint under Section 138 of the Negotiable Instruments Act,
1881 (the Act) can be presented at a place where the Complainant deposited
the cheque in his Bank (i.e. at the place where the collecting Bank is
situated).”
2. A complaint under Section 138 read with Section  142 of the Act was
presented against the Petitioners on the averments that on 01.03.2009, the
Respondent was appointed as Chief Executive Officer (CEO) with the First
Petitioner on a monthly salary of `75,000/- to establish its operations in
Northern India.  In discharge of the liability to pay the salary, the Petitioners
handed over a cheque No.082471 dated 29.04.2009 for `74,800/- drawn on
IDBI Bank, 44, Shakespeare Sarani Branch, Kolkata-700 017 to the
Respondent. The said cheque when presented with HDFC Bank, New Delhi
stood dishonoured with remarks of ‘insufficient funds’.  In the complaint it
was alleged that bouncing of the said cheque was brought to the notice of
Petitioners No.2 and 3 and on their instructions, the Respondent presented the cheque again but it was again dishonoured on presentation with the
remarks “payment stopped by drawer”.  When the factum of bouncing of the
said cheque again was brought to the notice of Petitioners No.2 and 3
(accused No.2 and 3 before the learned Metropolitan Magistrate) they again
apologized and assured to make arrangement for encashment of the cheque.
The cheque was again dishonoured when presented on 18.08.2009.  A legal
notice through the lawyer at New Delhi was dispatched to the Petitioners
and on failure to make the payment within the statutory period as laid down
under Section 138 of the Act, a complaint under Section 138 read with
Section 142 of the Act was filed against the Petitioners.
3. After recording pre summoning evidence, the Petitioners were summoned
for the offence punishable under Section 138 of the Act.  They moved a
Petition before the High Court for quashing of the complaint on the ground
that the Delhi Courts had no territorial jurisdiction to try the complaint as no
part of the cause of action took place within the jurisdiction of NCT of
Delhi.  It is stated that the said Petition was withdrawn with liberty to
approach the Trial Court. Thus, the Petitioners filed an application under
Section 177 of the Code of Criminal Procedure before the Court of learned
Metropolitan Magistrate (‘MM’). The following averments were made in the
application:-
“(a) Applicants/accused are having their residence and office in Kolkata in
the State of West Bengal.
(b)  Complainant has been allegedly appointed as a CEO of the accused
No.1 – Company in Kolkata.
(c)  As per para 2 of the complaint, the cheuqe issued to the
complainant which got allegedly bounced was drawn on IDBI Bank, 44,
Shakespeare Sarani, Kolkata.  
(d)  As per para 3 of the complaint, the aforesaid cheque was re-presented
to the applicants’ banks at Kolkata which also stood allegedly returned.
(e)  As per para 5 of the compliant, a legal notice was allegedly served
upon the applicants/accused in Kolkata.
(f)  The entire cause of action pertaining to the question of
employment of the complainant as well as issuance of cheque and service of
legal notice, if any, arose in Kolkata and no part of the same arose in Delhi
(as per the averments of the complainant in the complaint itself).  As such,
this Ld. Court does not possess the territorial jurisdiction to try and proceed
with the entire complaint.” 4. It was stated that the legal notice allegedly served upon the Petitioners
from Delhi will not confer jurisdiction of Delhi Courts.                
5. The application moved under Section 177 Cr.P.C. was contested by the
Respondent.  However, the factum of the cheque in question having not been
delivered to the Respondent at Kolkata being drawn  on IDBI Bank 44,
Shakespeare Sarani Branch, Kolkata-700 017 was not  disputed.  It was
asserted that since the Respondent presented the cheque to HDFC Bank at
New Delhi branch for collection, part of cause of action arose within the
Union Territory of Delhi and thus, the Delhi Courts did have the jurisdiction.
6. The learned MM relying on a judgment of learned Single Judge of this
Court in Religare Finvest Ltd. v. State & Anr. 173 (2010) DLT 185 opined
that the place where the cheque was presented by the payee was one of the
essential ingredients of Section 138 of the Act and thus, part of the cause of
action arose within the territory of Delhi, consequently, the application was
dismissed.
7. In the Revision Petition, it is stated that in fact the Respondent had
worked with the First Petitioner only for one month.  It was stated that the
first cheque was dishonoured on presentation on the ground of insufficient
funds but because of suspicious and unbecoming conduct of the Respondent,
they had stopped payment of the cheque and when the Respondent
approached the Petitioners, the amount of `74,800/- was deposited in the
Respondent’s account but, thereafter the Respondent maliciously presented
the cheque.  Obviously, these questions being disputed questions of facts are
not to be gone into at this stage.  What is to be seen is whether on the basis
of the averments made in the complaint, whether some of the essential acts
forming part of the offence or cause of action was done within the territory
of Delhi so as to confer jurisdiction on Delhi Courts. The question of
presentation of the cheque at a place other than the drawee Bank directly
came up for consideration before a learned Single Judge of this Court in
Online IT Shoppe India Pvt. Ltd. & Ors. v. State &  Anr. Crl.MC
No.2695/2009 decided on 20.11.2009 (V.K.Jain, J.).  The learned Single
Judge while relying on Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd;
(2001) 3 SCC 609 observed that Shri Ishar Alloy had dealt with the issue of
“the Bank” referred to in Clause (a) to the proviso to Section 138 of the Act
as the drawee Bank on which the cheque is drawn and not all the banks
where the cheque is presented for collection including the Bank of the payee, in whose favour the cheque is issued. In paras 8 and 9, the learned Single
Judge held as under:-  
“8. As regards presentation of the cheque, the learned counsel for the
petitioner has relied upon the decision of the Hon’ble Supreme Court in  Shri
Ishar Alloy Steels Ltd. Vs. Jayaswals Neco Ltd;  (2001) 3 SCC 609. In this
case the Hon’ble Supreme Court, inter-alia, held that “The bank” referred to
in clause (a) to the proviso of Section 138 of the Act would mean the drawee
bank on which the cheque is drawn and not all the banks where the cheque is
presented for collection including the bank of the payee, in whose favour the
cheque is issued.”
It was further observed that “the payee of the cheque has the option to
present the cheque in any bank including the collecting bank where he has
his account but to attract the criminal liability of the drawer of the cheque
such collecting bank is obliged to present the cheque in the drawee or Payee
bank on which the cheque is drawn within the period of six months from the
date on which it is shown to have been issued.”
In para 10 of the judgment the Hon’ble Supreme Court further observed that
“Sections 3, 72 and 138 of the Act would leave no doubt in our mind that the
law mandates the cheque to be presented at the bank on which it is drawn if
the drawer is to be held criminally liable.”
9. The ratio of the above referred judgment of the Hon’ble Supreme Court is
that a cheque is deemed to have been presented to the banker of the drawer
irrespective of the fact whether it is deposited by the payee in his own bank.
The banker of the payee, after receiving the cheque from him, is required to
present it to the banker of the drawer and therefore if the cheque issued from
a bank in Ernakulam is deposited in Delhi, the bank in which it is deposited
in Delhi, is required to present it to the bank at Ernakulam, for the purpose
of encashment.  Therefore, it cannot be said that the cheques issued by the
petitioners were presented in Delhi, despite the fact that the bank in which
the respondent No. 2 had an account was in Delhi, the cheque shall be
deemed to have been presented only to the bank at Ernakulam on which they
were drawn.  Therefore, deposit of cheques in Delhi would not confer
jurisdiction of Delhi court to try this complaint.”
8. Another Single Judge of this Court in Mahika Enterprises & Anr. v. State
(NCT of Delhi) & Anr. 173 (2010) DLT 361 relied on the judgment of the
Supreme Court in Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd;  (2001) 3 SCC 609 and the judgment of this Court in Shroff Publishers &
Distributors Pvt. Ltd. v. Springer India Pvt. Ltd. 143 (2007) DLT 661; ICICI
Bank Limited v. Subhash Chand Bansal & Ors., 160 (2009) DLT 379; and
Online IT Shoppe India Pvt. Ltd. & Ors. v. State & Anr. I (2010) DLT (Crl.)
110 and held that to attract the criminal liability of the drawer of the cheque,
the collecting bank is obliged to present the cheque in the drawer’s bank and
the Courts where the collecting Bank is situated on this ground itself will not
have jurisdiction to entertain the complaint.  Para 12 of the report is
extracted hereunder:-
“12. In Shroff publisher and Distributors Pvt. Ltd. vs. Springer  India Pvt.
Ltd. 2008 Criminal Law Journal 1217, it  has been held that the payee has an
option to present the cheque in any bank  including the collecting bank
where he has his account, but to  attract the criminal liability of the drawer
of the cheque such  collecting bank is obliged to present the cheque in the
drawer’s  bank, on which cheque is drawn. In Ishar  Alloy Steel Ltd. vs.
Jayaswals NECO Ltd. 2001 II AD (S.C.) 330, Supreme Court held  that “the
bank” referred to in Clause (a) to the proviso to Section 138 of the Act
means 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 issued.  In ICICI Bank Ltd. vs. Subhash
Chand Bansal & Ors. 160 (2009) Delhi Law Times 379, this Court held that
the court in whose territorial jurisdiction drawee bank is situated would have
territorial jurisdiction to entertain the complaint in question. Similar view
has been taken in Online IT Shopee India Pvt. Ltd.,and V.S. Thakur (reports
cited supra).  
9. Yet another learned Single Judge of the Court in Ramaswamy S. Iyengar
v. The State (NCT of Delhi) & Anr. Crl.MC No.4140/2009 decided on
16.03.2011; Grandlay Electricals (India) v. ESS ESS Enterprises & Ors.
CRP No.313/2011 decided on 18.07.2011; and Dushyant Verma v. Tek
Chand Crl.MC No.3531/2010 decided on 30.08.2011 also relied on Shri
Ishar Alloy (supra) and held that the place where the cheque is presented by
the payee for collection by itself will not have any jurisdiction.
10. In Ramaswamy S. Iyengar, the learned Single Judge opined that the
judgment passed by the learned Single Judge of this Court in Religare
Finvest Ltd. would be of no avail to the Complainant in view of the
judgment of the Supreme Court in Shri Ishar Alloy and M/s. Harman
Electronics (P) Ltd. & Anr. v. M/s. National Panasonic India Ltd., 2009 (1)
SCC 720.   11. To confer jurisdiction on a Court for an offence of dishonour of the
cheque, one or the other act which constitute the offence must be done
within the jurisdiction of the Court where the complaint under Section 138
of the Act is filed.  In the instant case all the acts, that is, the handing over of
the cheque to the payee, that is, the Respondent, was at Kolkata; the cheque
was drawn at IDBI Bank having its branch at Kolkata; the cheque was
dishonoured by the earlier said branch at Kolkata which was the drawee of
the cheque. The drawer of the cheque in spite of the receipt of notice at
Kolkata failed to make the payment within the stipulated period.
12. It is no longer res integra that service of notice from any place, in the
instant case Delhi, would not confer jurisdiction on Delhi Courts (See M/s.
Harman Electronics (P) Ltd. & Anr. v. M/s. National Panasonic India Ltd.,
2009 (1) SCC 720.). Similarly, on the strength of the judgment of the
Supreme Court in Shri Ishar Alloy, the presentation of the cheque for
collection at HDFC Bank New Delhi would not confer jurisdiction on Delhi
Courts.
13. The learned MM erred in holding that the Delhi Courts have jurisdiction
to entertain the complaint under Section 138 of the Act.
14. The Revision Petition, therefore, has to succeed; the same is accordingly
allowed.  Consequently, the complaint stands dismissed on the ground that
Delhi Courts did not have any territorial jurisdiction.
         Sd/-
(G.P. MITTAL)
              JUDGE
JANUARY 15, 2013