P. Soman vs Fullerton India Credit Company Ltd.

R. Mala, J.—This Criminal Original Petition is filed to withdraw and transfer the case in C.C. No. 9534 of 2010, pending on the file of

XXIII Metropolitan Magistrate''s Court, Saidapet, Chennai, to Nagercoil or any other competent Court situated within the territorial jurisdiction of

Nagercoil, Kanyakumari District.

The skeleton of the case of the Petitioner is that the Petitioner borrowed a sum of Rs. 95,000/-by way of personal loan from the complainant on

28.06.2008 and he agreed to repay the same in 36 equal monthly instalments of Rs. 4,571/-p.m. So the Petitioner issued 36 signed blank cheques.

He repaid the same properly upto 31.12.2009 without any default, i.e. 18 instalments. At the time of disbursing of the loan, the

Respondent/complainant received 36 numbers of signed blank cheques. Due to the problem arised in his business, the Petitioner was unable to pay

the balance amount. When the cheques were presented, they were returned with endorsements as ''account closed'' and hence, the

Respondent/complainant issued statutory notice dated 03.07.2010. Since the Petitioner/accused was unable to pay the cheque amounts, the

Respondent/complainant preferred a complaint u/s 138 of the Negotiable Instruments Act before XXIII Metropolitan Magistrate, Saidapet,

Chennai, which was taken on file in C.C. No. 9534/2010. It is further submitted that XXIII Metropolitan Magistrate''s Court has No. jurisdiction

to entertain the same, since the entire cause of action arose only at Nagercoil and No. cause of action arose at Chennai conferring territorial

jurisdiction to file a complaint u/s 138 of the Negotiable Instruments Act. The loan transaction was at branch of the Respondent''s firm situated at

Nagercoil. The cheques were presented at HDFC Bank, Nagercoil and notice alone has been issued from Chennai and as per the dictum of the

Apex Court, the trial Court has No. jurisdiction to entertain the same and hence, he prayed for withdrawal and transfer of the case pending before

XXIII Metropolitan Magistrate, to the competent territorial jurisdictional Court at Nagercoil, Kanyakumari District.

The Respondent/complainant in the trial Court, filed counter affidavit stating that the trial has already commenced and the same is pending for

questioning the accused u/s 313 Code of Criminal Procedure Since the Petitioner/accused defaulted in payment of the amount, the cheques were

presented before HDFC Bank, Chennai and the cheques were returned and hence, statutory notice has been issued and since the accused has not

repaid the amount, the complaint has been preferred. So, XXIII Metropolitan Magistrate''s Court has territorial jurisdiction to entertain the

complaint and hence, he prayed for dismissal of the case.

Considering the rival submissions made by both sides, it is admitted that there was loan transaction and the Petitioner borrowed Rs. 95,000/-for

his business purpose and issued 36 cheques for repayment of loan in 36 monthly instalments of Rs. 4,571/-. The issuance of cheques bearing Nos.

45848, 45849 and 45850, dated 4.3.2010, 4.4.2010 and 4.5.2010 were presented, which were returned as ""Account Closed"". So, the notice

has been issued from Chennai and reply has been received and then the complaint has been preferred.

The learned Counsel for the Petitioner has raised two points. One is the cheques were issued only at HDFC Bank, Nagercoil and notice alone

has been issued from Chennai. Mere issuance of notice is not conferred any territorial jurisdiction.

The learned Counsel for the Respondent submitted that the cheques were presented before the HDFC Bank, Chennai. So as per the dictum of

apex Court reported in K. Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, , there are 5 cause of actions. The third cause of action is

presentation of the cheque to the Bank is having territorial jurisdiction. Here, since the cheques were presented at HDFC Bank, Chennai and

notice also issued at Chennai, the learned XXIII Metropolitan Magistrate, Chennai, has territorial jurisdiction to entertain the complaint.

Now this Court has to decide as to whether the cheques were presented before HDFC Bank, Chennai. On perusal of the cheques under

Exs.P2 to P4, in the front page, it was mentioned by rubber stamp as ''HDFC Bank Ltd., CMS, Chennai. In the back side of the cheques, there

was a rubber stamp as ''HDFC Bank Ltd., Nagercoil''. To clarify the same, a communication dated 22.06.2011, has been sent by this Court to the

Manager, HDFC Bank, Chennai, directing him to verify that where the cheques were presented for collection at Chennai. The report has been

received on 24.06.2011, stating that the cheques were presented only at Chennai and sent for collection to their branch at Nagercoil. So the

cheques were presented only at Chennai and forwarded to Nagercoil, since the cheques issued by the Petitioner/accused herein is having his

account at Punjab National Bank, Nagercoil Branch. So I am of the view that cheques were presented only at HDFC Bank, Chennai.

At this juncture, it is appropriate to consider as to whether the ''Bank'' mentioned in Section 138 of Negotiable Instruments Act is collection

Bank or Drawee Bank. The learned Counsel for the Petitioner submitted that a ''Bank'' in Section 138 of Negotiable Instruments Act, means only

a ''drawee bank'' not ''collection Bank''. Merely because of the cheques were presented for collection at Chennai will not infer territorial jurisdiction

to entertain the complaint.

At this juncture, it is appropriate to consider the following decisions relied upon by the learned Counsel for the Petitioner.

(a) CDJ 2001 SC 120 (Shri Ishar Alloy Steels Ltd. v.

Jayaswals Neco Ltd), in that it was specifically mentioned that the bank referred to in Clause (a) to the proviso to Section 138 of the Negotiable

Instruments Act, would 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 issued. In this citation, it was held that the cheque should be presented within six

months from the date of issuance of cheque and the cheque has been presented within six months from the collecting bank and not reached the

drawee bank within six months and there was an issue raised is ""Bank"" mentioned in Section 138 of Negotiable Instruments Act, whether it is a

collection bank or drawee bank. In this citation, it was held that the cheque has been reached the drawee bank within six months from the date of

issuance of cheque. In the present case, limitation is not the point to be decided. In such circumstances, I am of the view that the above citation is

not applicable to the facts of the present case.

(b) CDJ 2010 MHC 6637 (Pale Horse Designs and Anr. v. Natarajan Rathnam), in that it was held that the cheques were drawn in

Massachusetts, United States of America. Therefore, in all essential matters the law in the United States of America shall be attracted towards any

action against the drawer. So the citation is not applicable to the facts of the present case.

(c) CDJ 2011 DHC 317 (SH.Ramaswamy S.Iyengar v. The State (NCT of Delhi) and Anr.) in that, it was held that the place of location of

collecting bank through which cheque was sent to some other branch jurisdiction would not confer jurisdiction on the courts having territorial

jurisdiction over that place. The question of territorial jurisdiction of a Court to try an offence u/s 138 of Negotiable Instruments Act came up for

the consideration of the Supreme Court in Harman Electronics (P) Ltd. and Another Vs. National Panasonic India Ltd., , the Hon''ble Supreme

Court has once again held that the place where from notice was issued would not by itself give rise to cause of action for prosecution for the

dishonour of the cheque u/s 138 of the Negotiable Instruments Act. In this citation, it also mentioned that in (Trilux Technologies Singapore P. Ltd.

and Ors. v. Boon Technologies) reported in (2005) 123 Comp. Cases 551 (Mad), it was held that though the cheque was drawn in respect of an

account maintained by the drawer at a bank in Singapore, since the amount was payable at the place of the complainant that was at Chennai, the

complaint preferred in Chennai was maintainable. But, all the above citations are not applicable to the case of the present case.

But as per the decision reported in Shri Ishar Alloy Steels Ltd. Vs. Jayaswals NECO Ltd., , the Petitioner is located at Mumbai. The cheques

in question were issued at Mumbai, the cheques were sent for collection to the drawee bank at Mumbai and even the notice of demand u/s 138 of

Negotiable Instruments Act was served upon the Petitioner at Mumbai address. Therefore, it is apparent that the entire cause of action for filing a

complaint u/s 138 of Negotiable Instruments Act has arisen at Mumbai. As per the decision reported in Shri Ishar Alloy Steels Ltd. Vs. Jayaswals

NECO Ltd., , the expression ''the bank'' occurring in proviso (a) to Section 138 of the Negotiable Instruments Act, means the drawee bank and

not the collecting bank.

Now it is appropriate to consider the decision relied upon by the learned Counsel for the Respondent reported in CDJ 2008 SC 2092 (M/S.

Harman Electronics (P) Ltd. and Anr. v.

M/S. National Panasonic India Ltd.), which equals to Harman Electronics (P) Ltd. and Another Vs. National Panasonic India Ltd., , in paragrpah-

9, it was held that this Court opined that the offence u/s 138 of the Negotiable Instruments Act can be completed only with the concatenation of a

number of acts, namely, (1) Drawing of the cheque, (2) Presentation of the cheque to the bank, (3) Returning the cheque unpaid by the drawee

bank, (4) Giving notice in writing to the drawer of the cheque demanding payment of the cheque amount (5) Failure of the drawer to make

payment within 15 days of the receipt of the notice. It was opined that if five different acts were done in five different localities, any one of the

courts exercising jurisdiction in one of the five local areas can become the place of trial for the offence u/s 138 of the Act and the complainant

would be at liberty to file a complaint petition at any of those places. In this citation,

it was held that the complaint petition does not show that the cheque was presented at Delhi. It is absolutely silent in that regard. It was held that

the notice alone has been issued from Delhi. So it was held that Delhi High Court has No. jurisdiction.

Further, the learned Counsel for the Petitioner relied upon the decision of this Court reported in CDJ 2010 MHC 2156 (P.Saravanakumar v.

Jai Sakthi Knit Embroidaries, rep. by its Proprietor M.Murugesan, Tirupur), in that, it was stated that the decision reported in Harman Electronics

(P) Ltd. and Another Vs. National Panasonic India Ltd., has been followed. Since notice alone has been issued, issuance of notice alone has not

been conferred any territorial jurisdiction for entertaining the complaint. It is well settled dictum of the apex Court that issuance of notice will not

conferred jurisdiction. Hence, I am agreed with the argument advanced by the learned Counsel for the Petitioner in this aspect.

But, here, not only notice has been issued from Chennai, the cheques were also presented at Chennai. As per the dictum of the apex Court

reported in K. Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, , I am of the view that since the cheques were presented for collection at

Chennai, XXIII Metropolitan Magistrate''s Court, Chennai has territorial jurisdiction to entertain the complaint. In such circumstances, I am of the

view that mere issuance of notice will not confer any territorial jurisdiction to entertain the complaint u/s 138 of Negotiable Instruments Act. But,

the presentation of cheque to the Bank is having territorial jurisdiction to entertain the complaint u/s 138 of Negotiable Instruments Act. Hence I

am of the view that XXIII Metropolitan Magistrate''s Court is having jurisdiction to entertain the complaint.

Furthermore, already, P.W.1/Respondent was examined, but however, he was not cross-examined by the accused, when the matter was

posted for questioning u/s 313 Code of Criminal Procedure Issuance of cheque is not disputed by him and dishonour of cheque has not been

disputed by him. In such circumstances, to delay the proceedings, he come forward with this petition for transferring the case from XXIII

Metropolitan Magistrate''s Court, Saidapet, Chennai, to any other competent Court situated within the territorial jurisdiction of Nagercoil,

Kanyakumari District, does not merit acceptance. Hence, the criminal original petition is dismissed as devoid of merits.

In fine,

The Criminal Original Petition is dismissed. Consequently, connected miscellaneous petition is closed.

Since the case is u/s 313 Code of Criminal Procedure questioning stage, the trial Court is directed to dispose of the case within three months from

the date of receipt of copy of this order.

Both the parties are directed to co-operate for earlier disposal of the case.