Dynamatic Forgengs India Ltd. and Another vs Nagarjuna Investment Trusts Ltd. and Another

The petition is directed u/s 482 of the Code of Criminal Procedure (hereinafter referred to as ''the Code'' to call for the records in C.C. No. 367 of 1991 on the file of the Metropolitan Magistrate, Hyderabad and to quash the same. The facts which are not in dispute are that the first petitioner is a company of which the second petitioner is the Director. In lieu of a hire purchase arrangement a cheque was issued by the first petitioner for Rs. 5 lakhs on March 30, 1991 on the Karnataka Bank, Bombay. The same was presented for encashment on 1-4-1991 and the same was bounced with an endorsement "funds expected, present again". The same was represented again in the Month of May 19, 1991 and on the second occasion too, it bounced with an endorsement "referred to drawer". As such having issued the statutory notice, the first respondent filed C.C. No. 367/91 on the file of the V Metropolitan Magistrate, Hyderabad u/s 138 of the Negotiable Instruments Act. Thereupon the petitioners who are the accused, filed the present criminal petition u/s 482 of the Code to quash C.C. 367/91 pending on the file of the V Metropolitan Magistrate, Hyderabad. The fact that the petitioners issued the cheque dt. 30-3-1991 for Rs. 5 lakhs on the Karnataka Bank is not in dispute. Similarly the further fact that the said cheque was presented at Hyderabad for collection on 1-4-1991, on 8-4-1991 the said cheque was bounced with an endorsement "funds expected, present again" and for the second time when it was presented in the month of May, 1991 it once again bounced as per the endorsement of the bank "referred to drawer" dt. 16-5-1991 is not in dispute. In V. R. Krishnan v. V. S. Narayanan 1990 (1) MWN (Cri) 76, it is observed that in the banking parlance the reason "referred to drawer" when cheques are returned unpaid is used generally of returning the cheque for want of funds from the drawer''s account. To the same effect are the decisions reported in Voltas Limited and Others Vs. Hiralal Agarwalla and Others,

In this case it is more than evident that on both the occasions, the cheque was bounced due to paucity of funds in the account of the 1st petitioner. The correspondence between the parties and as a matter of fact, the averments in the Criminal Petition categorically show that the cheque in question bounced on both the occasions for want of funds. In the Telex dated 13-5-1991 referring to the first dishonour the first petitioner mentioned as follows :

"We could not honour due to financial constraint" The said Telex is annexure ''C'' in the material papers. Similarly in the latter dated May 26, 1991 by the petitioners to the whole time director, it is mentioned as follows :

"We explain to you, due to various financial constraints we were not able to make payments in time due to which arrears were accumulated. We have every intention of clearing up of the arrears".

It is significant to note that this letter was addressed after the cheque in question was bounced for the second time.

3-4. Coming to the averments in the criminal petition it is observed as follows :

"As the petitioner is in financial difficulties for the last about one year the first petitioner has been irregular in payment of instalments to the first respondent -

The petitioner No. 1 by their Telex message dated 13-5-1991 expressed their financial difficulties and requested respondent No. 1 to bear with the petitioner No. 1

The petitioner No. 1 by its letter dated July 10, 1991 once again stated the financial crisis through which it was passing requested the first respondent to wait for some more time for payments.

Thus, even in the petition it was clearly admitted that the first petitioner company was passing through financial crisis and consequently could not arrange for payment of the amount covered by the cheque in question. Thus this is not a case where the Andhra Pradesh decision referred to in M/s. Union Road Ways (p) Ltd. v. M/s. Shah Ramlal Stesh Kumar, 1992 (i) Anm 372 has any application and on the contra the facts in the case clinche in establishing that due to financial difficulties the first petitioner-company admits that it could not arrange for payment of the amount covered by the cheque in question on both the occassions.

On behalf of the petitioners it is submitted that the prosecution launched by the first respondent will not be in time as per the provisions of Section 138 read with 142 of the Negotiable Instruments Act, if a criminal case were to be filed basing on the first dishonour to get over the said difficulty, the cheque was presented for the second time only with a view to see that limitation is saved. This position is covered by a Judgment of this court reported in Richard Samson Sherrat Vs. State of Andhra Pradesh and Another, wherein it was held that the cheque can be presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier. Clause (a) of proviso to Section 138 of the Negotiable Instruments Act does not lay down as to the number of times a cheque can be presented to the bank, when the statute has not laid down any limitation on the number of times that a cheque may be presented within a period of six months or any shorter period under clause (a) of proviso to Section 138 of the Negotiable Instruments Act it will not be desirable to read into the said clause any such restriction as to the number of times a cheque may be presented. That was a case where the cheque was presented twice within six months and the same was dishonoured on both the occasions as in the present case. Hence in Richard Samson Sherrets case it was held that presentation of the cheque for the second time within the stipulated period of six months is not bad under law. To the same effect is the decision reported in K. V. Iyer, Prop. Peral Consultancy Services v. Chitra & Co. 1990 (2) Mad WN (Cri) 47, Thus in view of the above decisions I hold that the presentation of the cheque for the second time within the stipulated period of six months is not unwarranted and it cannot be said that the second presentation in this case is an excuse to save the limitation.

Mr. Venkataramana, the learned counsel for the petitioners submits that the 5th Metropolitan Magistrate. Hyderabad had no jurisdiction and consequently the complaint petition has to be returned for presentation to proper court. Elaborating his submission, the learned counsel for the petitioners submits that the contract of hire purchase was entered into at Bombay; the payment was proposed to be made at Bombay; the dishonouring the cheque took place at Bombay the first petitioner and the first respondent had meetings to discuss the payment of money at Bombay and after the dishonour of the cheque there have been several meetings between the first petitioner and the first respondent at Bombay and consequently the offence if any was committed only at Bombay and the courts at places other than the Bombay have no jurisdiction to take cognizance of the offence. It is the contention of the first respondent that the cheque were issued to the first respondent at Hyderabad, the cheque were presented for collection at Hyderabad, the first respondent received information regarding bouncing of the cheques only at Hyderabad and consequently the courts at Hyderabad have got jurisdiction. It is further submitted on behalf of the first respondent that by virtue of Sections 178 and 179 of the Code of Criminal Procedure the courts at Hyderabad have got jurisdiction. It is further submitted that the debtor has to find the creditor and consequently the place where the creditor company is having its office, will have jurisdiction of try the case.

Section 178 of the Code so far as it is relevant and Section 179 read thus :

S. 178 : Place of Enquiry or trial :

a) xxxxx

b) where an offence is committed partly in one local area and partly in another, or

c) xxxxx

d) where it consists of several acts done in different local areas, it may be inquired into or tried by a Court having jurisdiction over any of such local area.

Section 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 inquired into or tried by a Court within whose local jurisdiction such thing has been done or such consequence has ensued.

It is to be seen that the office of the first respondent is located at Nagarjuna hills Hyderabad, the said cheque was presented at Hyderabad over which the 5th Metropolitan Magistrate, Hyderabad has jurisdiction. The cheque was issued in favour of the first respondent company with head office at Nagarjuna Hills, Hyderabad for collection and consequently part of the cause of action arose at Hyderabad by virtue of Sections 178 and 179 of the Code and consequently the court at Hyderabad have got jurisdiction to try the offence.

In M.M. Malik and Others Vs. Prem Kumar Goyal, it is observed that the debtor has to find creditor and the court within whose jurisdiction the office of the Creditor company is located will have jurisdiction. To the same effect are the decisions reported in Ess Bee Food Specialities and Others Vs. Kapoor Brothers, M/s. Shree Bharat Laxmi Wool Store v. P.N.B.

Ess Bee Food Specialities and Others Vs. Kapoor Brothers, is a case where the case was instituted at the place where the cheque was dishonoured and it was held that the court where the cheque was dishonoured has jurisdiction.

M/s. Shree Bharat Laxmi Wool Store v. V.P.N.B. 1992 IJ (Bank) 111, is a case where the cheque was presented for collection at Bangalore and the said cheque was dishonoured and it was held that the Courts at Bangalore have got jurisdiction to try the case.

Under these circumstances, finding no merits the Criminal Petition is dismissed.

But this does not bar the petitioners to take all such pleas available to them under law in the trial court.

Petition dismissed.