HDFC Bank Ltd. vs Salamuddin Ahmed and Others

Sunil Gaur, J.—The question involved in the above titled eight petitions is of territorial jurisdiction. Petitioner had filed Crl. Rev. P. No. 151-

154/2009 & 156-159/2009 Page 1 eight complaints u/s 138 of Negotiable Instruments Act, 1881 before a Metropolitan Magistrate, Dwarka

Courts, Delhi, against the Respondents regarding bouncing of cheques.

Vide impugned order of 25th February, 2009, trial court has dismissed Petitioner''s aforesaid complaints on the ground of territorial jurisdiction

by relying upon a recent verdict of the Apex Court in the case of Harman Electronics (P) Ltd. and Another Vs. National Panasonic India Ltd., .

Petitioner''s counsel has been heard at length and the decision reported in K. Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, relied

upon by him have been perused.

In these petitions, it is not in dispute that the Respondents are residing outside the territorial jurisdiction of the trial court and the bank of the

Respondents is also beyond the territorial jurisdiction of the trial court. It would be pertinent to quote paragraphs No. 24 and 25 from a recent

verdict of the Apex Court in the case of Harman Electronics (P) Ltd. and Another Vs. National Panasonic India Ltd., , which reads as under:

Indisputably all statutes deserve their strict application, but while doing so the cardinal principles therefore cannot be lost sight of. A Court

derives a jurisdiction only when the cause of action arose within his jurisdiction. The same cannot be conferred by any act of omission or

commission on the part of the accused. A distinction must also be borne in mind between the ingredient of an offence and commission of a part of

the offence. While issuance of a notice by the holder of a negotiable instrument is necessary, service thereof is also imperative. Only on a service of

such notice and failure on the part of the accused to pay the demanded amount within a period of 15 days thereafter, commission of an offence

completes. Giving of notice, therefore, cannot have any precedent over the service. It is only from that view of the matter in M/s. Dalmia Cement

(Bharat) Ltd. Vs. M/s. Galaxy Traders and Agencies Ltd., , emphasis has been laid on service of notice.

We cannot, as things stand today, be oblivious of the fact that a banking institution holding several cheques signed by the same borrower

cannot only present the cheque for its encashment at four different places but also may serve notices from four different places so as to enable it to

file four complaint cases at four different places. This only causes grave harassment to the accused. It is, therefore, necessary in a case of this

nature to strike a balance between the right of the complainant and the right of an accused vis-a-vis the provisions of the Code of Criminal

Procedure.

However, learned Counsel for the Petitioner heavily relies upon another decision of the Coordinate Bench of the Apex Court in the case of K.

Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, , to contend that place of drawing of cheque, its presentation, its return, place of giving of

notice and place of failure of drawer to make the payment would have the jurisdiction to entertain a complaint u/s 138 of Negotiable Instruments

Act, 1881, pertaining to bouncing of cheque and the complaint can be filed at any one of the five places and the choice will be of the Complainant.

It has been pointed out on behalf of the Petitioner that aforesaid case of K. Bhaskaran (supra) has been quoted with approval in a recent

unreported decision by the Apex Court in the case of Smt. Shamshad Begum v. B. Mohammad, Crl. A. No. 1715/2008, decided on 3rd

November, 2008 and the same has been relied upon by a single bench of the High Court of Madhya Pradesh in Crl. C. No. 1233/2009, titled

Manjul v. Wasim Shekh"" decided on 3rd March, 2009, while distinguishing the verdict of the Apex Court in the case of Harman Electronics

(Supra).

Learned Counsel for the Petitioner vehemently contends that the case of Harman Electronics (Supra) has been illegally relied upon by the trial

court but the same is distinguishable on facts as in the above said case, statutory notice was given from Delhi but the entire transaction had taken

place at Chandigarh and therefore, it had been held that the Delhi courts do not have territorial jurisdiction as by giving of notice alone, territorial

jurisdiction cannot be created.

After having heard learned Counsel for the Petitioner at length and upon perusal of the decisions cited, I am of the considered opinion that the

recent verdict of the Apex Court in the case of M/s. Harman Electronics (Supra) holds the field. This decision has been rendered by the Apex

Court on 12th December, 2008 and the earlier decision of the Apex Court rendered in the case of K. Bhaskaran (Supra) has been duly

considered and the conclusive observations made in paragraph No. 14, reads as under:

It is one thing to say that sending of a notice is one of the ingredients for maintaining the complaint but it is another thing to say that dishonour of

a cheque by itself constitutes an offence. For the purpose of proving its case that the accused had committed an offence u/s 138 of the Negotiable

Instruments Act, the ingredients thereof are required to be proved. What would constitute an offence is stated in the main provision. The proviso

appended thereto, however, 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 the provisos (a), (b) and (c) appended to Section 138 of the Negotiable Instruments Act

intended to be applied in favour of the accused, there cannot be any doubt that receipt of a notice would ultimately give rise to the cause of action

for filing a complaint. As it is only on receipt of the notice the accused at his own peril may refuse to pay the amount. Clauses (b) and (c) of the

proviso to Section 138 therefore must be read together. Issuance of notice would not by itself give rise to a cause of action but communication of

the notice would.

(emphasis supplied)

Thus, it is abundantly clear that for commission of an offence u/s 138 of Negotiable Instruments Act, 1881, notice must be received by the

accused. It may be deemed to have been received in certain situations. Section 177 of the Code of Criminal Procedure determines the jurisdiction

of a court trying the matter. The court will have the jurisdiction only where the offence has been committed. The provisions of Sections 178 and

179 of the Code of Criminal Procedure are exceptions to Section 177. These provisions presuppose that all offences are local. However, there

may be a case, where the accused would have shifted his residence outside the territorial jurisdiction of the court concerned, but then, in such a

case, the court in whose territorial jurisdiction drawee bank, (i.e., banker of the accused) is situated would have the territorial jurisdiction to

entertain the complaint in question. Therefore, the place where an offence has been committed plays an important role. Therefore, the place where

an offence has been committed plays an important role.

In M/s. Harman Electronics (Supra), the contention was raised that a debtor must seek the creditor should be applied in a case of this nature

and it was repelled in the following words:

We regret that such a principle cannot be applied in a criminal case. Jurisdiction of the Court to try a criminal case is governed by the provisions of

the Criminal Procedure Code and not on common law principle.

It needs no elaboration that when two decisions of coordinate benches of the Apex Court are cited, then the later one prevails. The decision of

the Apex Court in the case of Smt. Shamshad Begum (supra) relied upon by the Petitioner is of 3rd November, 2008; whereas, the Apex Court

decision in the case of M/s. Harman Electronics (Supra) is of 12th December, 2008. I find myself unable to agree with the reasoning in decision

rendered by a Single Bench of the High Court of Madhya Pradesh in the case of Manjul v. Wasim Shekh (Supra), as the latest decision of the

Apex Court in the case of M/s. Harman Electronics (Supra) cannot be brushed aside by simply observing that it was rendered in a different

context and by relying upon the decision in the case of K. Bhaskaran (Supra).

It is a ground reality that we cannot, as things stand today, be oblivious that financial institutions have their branch offices in number of cities

from where they enter into transactions with the persons interested in personal loan/housing loan/car loan/furniture loan/educational loan, etc. and

the courts cannot be a mute spectator by permitting the Complainant to proceed against accused persons residing at far of places.

The aforesaid ground reality stands illustrated from Crl. Rev. P. No. 210/2009, wherein the Respondent accused is from Vellore, which is in

South India and the complaint regarding dishonor of cheque has been filed in Delhi court. Taking note of such a situation, Apex Court in the case

of M/s. Harman Electronics (Supra) has declared in unequivocal terms that financial institutions, ought not to be permitted to do forum hunting as

per their convenience, much to the grave harassment of the accused and a balance has to be struck.

I am in respectful agreement with the above said ratio of the decision in the case of M/s. Harman Electronics (Supra).

During the course of the arguments, it had transpired that criminal complaints of Petitioner pertain to cheque amounts ranging from Rs. 1,500/-

to Rs. 4,500/- only in these matters. In such like cases, it would be too harsh upon a Respondent/accused to come to Delhi from far of places and

to face the proceedings u/s 138 of Negotiable Instruments Act, 1881, merely because Petitioner chooses to file the complaints under the aforesaid

Act in Delhi.

It is a hard reality that the financial institutions like the Petitioner, have made Delhi Courts a dumping ground for filing of criminal complaints u/s

138 of Negotiable Instruments Act, 1881, in bulk and, even in cases where the territorial jurisdiction is of the courts as far as in South India. This

has resulted in choking of the criminal courts seized with such like matters. In the impugned order, trial court has rightly relied upon the latest

verdict of the Apex Court rendered in the case of M/s. Harman Electronics (Supra) to hold that it does not have territorial jurisdiction to entertain

these criminal complaints.

Although in Crl. Rev. P. No. 157/2009, the address of Respondent is shown to be of Delhi but the same is against record, as the trial court

record clearly shows that the address of the Respondent in the complaint as well as in statutory notice is of Bahadurgarh, which is in State of

Haryana, i.e. outside Delhi and outside the purview of jurisdiction of the trial court, therefore, the position in Crl. Rev. P. No. 157/2009 is no

different and is on the similar footing as in the connected petitions.

In view of the aforesaid narration, I do not find any illegality or infirmity in the impugned order of 25th February, 2009 and thus, all these

revision petitions are dismissed being meritless.

With aforesaid observations, these eight petitions stand disposed of.