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Judgment
Ramesh Madhav Bapat, J.—The petitioner in the above petition was an accused. The first respondent herein filed a complaint against the accused u/s 138 of the Negotiable Instruments Act. On receipt of summons, the petitioner approached this court for quashing the proceedings by filing a petition u/s 482 of the Criminal Procedure Code, 1973.
The averments made in the complaint are as follows :
"It is further submitted that the accused intentionally avoiding and evading to pay the amount to the complainant. As such, the complainant insisted for the amount. Hence, the accused issued a cheque bearing No. 1135158 dated July 20, 1998, drawn on Bank of India, Eluru, East Godavari District for a sum of Rs. 2,36,683.76 towards the due amount. Believing the accused, the complainant accepted and presented the said cheque through their banker State Bank of Hyderabad, Kakinada branch, for realisation of the amount. But the same was returned, dishonoured by the accused banker with an endorsement "Insufficient funds" vide their memo dated July 23, 1998. The same was intimated to the complainant by their banker on July 28, 1998, The fact of the dishonour of the said cheque was intimated to the accused by the complainant orally, but the accused failed and neglected to pay the cheque amount to the complainant with an intention to cheat the complainant. The original cheque and dishonour memo are filed herewith."
From the reading of the complaint, it is evident that the cheque was issued to the complainant against an account maintained in Bank of India at Eluru by the accused. The cheque was presented by the complainant in the State Bank of Hyderabad, Kakinada branch where he maintained an account for realisation from the Bank of India, Eluru. The cheque was returned and dishonoured with an endorsement "Insufficient funds". On this basis, the accused sought for quashing of the complaint by filing a petition u/s 482 of the Criminal Procedure Code, 1973.
In para. 6 of the complaint it was averred by the complainant as under :
"The Hon''ble court has got jurisdiction to try the complaint as the complainant''s regs. office situated at Panjagutta, Nagarjuna Hills, Hyderabad, which comes under the jurisdiction of this Hon''ble Court."
The accused pleaded that the court at Hyderabad has no jurisdiction to entertain the complaint and therefore sought quashing of the proceedings as the cause of action arose beyond the jurisdiction of the court at Hyderabad.
The above quashing proceedings was placed before the learned single judge of this court (Bilal Nazki J.). The learned single judge felt that there have been differences of opinion in the earlier decisions rendered by this court. The learned single judge cited a case in Goutham Television Centre and Another Vs. Apex Agencies and Another, . The learned single judge did not agree with the said decision. The learned single judge felt that the cause of action did not arise within the jurisdiction of the Hyderabad court only because a notice calling upon the accused to pay the amount within a period of 15 days was issued through the registered office situated at Hyderabad, and therefore, the learned single judge directed the Registry to place the matter before the Hon''ble Chief Justice for placing the matter before the Division Bench of this court for laying down the correct position of law.
It further appears from the record that similar petitions, i. e., Crl. Petitions Nos. 2489 and 2490 of 1999 came before another learned single judge (Vaman Rao J.) and therefore, at the directions of the Hon''ble Chief Justice, all the criminal petitions involving the same law point have been referred to this court for laying down the correct position of law.
Learned counsel, Mr. E. Ella Reddy appeared for some of the accused and Mr. B. Nalani Kumar appeared for some of the accused. It was contended by learned counsel appearing on behalf of the original petitioners (accused) that the cause of action ardse to the complainant for filing the complaint only at the place where the cheque was dishonoured.
In order to appreciate the aforesaid contention, Section 138 of the Negotiable Instruments Act is extracted as under :
"138. Dishonour of cheque for insufficiency, etc., of funds in the account.--Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both : Provided that nothing contained in this section shall apply unless-
(a) the cheque has been 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.
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.--For the purposes of this section, ''debt or other liability'' means a legally enforceable debt or other liability."
With these statutory provisions on record, it was contended by learned counsel for the accused that the jurisdiction of the court has to be determined on the basis of the complaint and not on the basis of the other material placed on record. It was further contended by learned counsel that when the cheque is dishonoured by the bank for not having sufficient funds in the account of a drawer of the cheque, the offence is complete. Learned counsel further submitted that the offence is complete not at Hyderabad only because the complainant has a registered office at Hyderabad. It was also pointed out by learned counsel for the accused-petitioner herein that the prosecution ought to have been filed at the place of dishonour and not at the place where the complainant has a registered office.
Learned counsel for the petitioner herein contended that the provisos to Section 138 of the Negotiable Instruments Act laid down only the procedural laws and does not confer any jurisdiction to the court. The court gets the jurisdiction the moment the cheque is dishonoured on which the cheque is drawn by the accused. Learned counsel further pointed out to constitute an offence as provided u/s 138 of the Negotiable Instruments Act, three acts have to be looked into viz., (1) issuance of the cheque ; (2) presentation of the cheque and (3) dishonouring of the cheque. Learned counsel relied upon the wording contained in Section 138 of the Negotiable Instruments Act wherein it is stated .... "where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part of any debt or other liability, is returned by the bank unpaid, either because the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence." With this legal provision it was contended that only the place where the cheque is dishonoured will have the jurisdiction and not otherwise. The registered office of the company i.e., the complainant, is irrelevant for the purposes of conferring the jurisdiction on the court.
Learned counsel also pointed out the relevant provisions contained in Section 20 of the Code of Civil Procedure, 1908. Learned counsel further submitted that as per the provisions of Section 20 of the Code of Civil Procedure, 1908, the suit can be instituted where the defendant resides or the cause of action arises. But the same provisions are not synonymous with the provisions contained in Section 138 of the Negotiable Instruments Act. Learned counsel further submitted that Section 138 of the Negotiable Instruments Act confers the jurisdiction on the court where the cheque is dishonoured.
To substantiate the aforesaid arguments, learned counsel relied upon the rulings in Premlata Chaddha (Ku.) v. Surendra Kwnar Soni 1998 94 Comp Cas 808 ; 1998 2 ALD (Cri.) 890 and Jai Parkash v. Dinesh Dayal 1991 97 Cri. LJ 418 (Delhi). Learned counsel also relied upon a ruling in State of Mad-hya Pradesh v. K.P. Ghiara AIR 1957 SC 196.
While rebutting the aforesaid arguments of learned counsel for the petitioners, learned counsel, Mr. V.R. Manohar and Mr. C. Mulla Reddy appearing on behalf of the complainant-respondent herein submitted at the Bar that to constitute an offence u/s 138 of the Negotiable Instruments Act, the entire pleadings as well as the entire Section 138 read with Section 142 of the Negotiable Instruments Act has to be taken into consideration. Section 142 of the Negotiable Instruments Act reads as under :
"142. Cognizance of offences.--Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),-
(a) no court shall take cognizance of any offence punishable u/s 138 except upon a, complaint, in writing, made by the payee, or, as the case may be, the holder in due course of the cheque ;
(b) such complaint is made within one month of the date on which the cause of action arises under Clause (c) of the proviso to Section 138 ;
(c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the First Class shall try any offence punishable u/s 138."
Learned counsel submitted that as per Sub-clause (b) of Section 142 of the Negotiable Instruments Act, the complaint has to be made within a period of one month of the date on which the cause of action arises under Clause (c) of the proviso to Section 138 of the Negotiable Instruments Act. According to the submissions made by learned counsel the cause of action to the complaint would not arise only when a statutory notice is issued to the accused calling upon him to pay the amount due under the cheque within a period of 15 days from the date of receipt thereof and the offence is only completed after the expiry of 15 days from the date of receipt of the notice issued by the complainant and not before it and if the accused fails to make the payment of the amount, the cause of action arises for the first time on the 16th day.
Learned counsel for the respondent herein drew our attention to Section 2(n) of the Code of Criminal Procedure, 1973, where the word "offence" is defined, which reads as under :
"''offence'' means any act or omission made punishable by any law for the time being in force and includes any act in respect of which a complaint may be made u/s 20 of the Cattle Trespass Act, 1871."
It was contended by learned counsel for the respondent herein that to constitute an offence (there must be) an omission to pay the amount before the expiry of 15 days. Leaned counsel further relied upon Section 146 of the Companies Act. Section 146 of the Companies Act reads as under :
"146. Registered office of company.--(1) A company shall, as from the day on which it begins to carry on business, or as from the (thirtieth) day after the date of its incorporation, whichever is earlier, have a registered office to which all communications and notices may be addressed."
Clause (a) of Section 146 of the Companies Act reads as under :
"(a) in the case of an existing company, outside the local limits of any city, town or village where such office is situated at the commencement of this Act, or where it may be situated later by virtue of a special resolution passed by the company ; . . . "
Learned counsel also relied upon Section 209 of the Companies Act wherein it is made mandatory that every company is required to keep all the proper books of account at the registered office. With these two provisions, learned counsel further submitted that the accused ought to have made payment at the registered office. Learned counsel further submitted that it is well-settled principle of law that the debtor must find the creditor to make the payment and the creditor can only be found at the company''s registered office and therefore when the payment was not made on receipt of the notice issued by the complainant company u/s 138 of the Negotiable Instruments Act, the company gets cause of action to file the complaint at the place where the registered office is located and the offence also is deemed to have completed at the place where the registered office of the company is located.
Learned counsel relied upon a ruling in Chandra Deo Singh Vs. Prokash Chandra Bose and Another, . In para. 12 of the judgment, their Lordships were pleased to observe as under (headnote) :
"(c) Criminal Procedure Code, 1898, Section 203--Sufficient ground for proceeding.--Materials on which Magistrate has to base its decision.
Since the object of an enquiry u/s 202 is to ascertain whether the allegations made in the complaint are intrinsically true, the Magistrate acting u/s 203 has to satisfy himself that there is sufficient ground for proceeding. In order to come to this conclusion, he is entitled to consider the evidence taken by him or recorded in an enquiry u/s 202, or statements made in an investigation under that section, as the case may be. He is not entitled to rely upon any material besides this. Where there is prima facie evidence, even though an accused may have a defence that the offence is committed by some other person or persons, the matter has to be left to be decided by the appropriate forum at the appropriate stage and issue of process cannot be refused."
Looking to the ruling of the apex court, we hold that while deciding the jurisdiction, the court has to consider not only the complaint filed but also the court has to consider the material filed along with the complaint conferring the jurisdiction on a particular court.
Learned counsel relied upon one more ruling in M/s. Sil Import, USA Vs. M/s. Exim Aides Silk Exporters, Bangalore, . In para. 7 of the judgment, their Lordships were pleased to observe as under (page 578 of Comp Cas) :
"The language used in the above section admits of no doubt that the Magistrate is forbidden from taking cognizance of the offence if the complaint was not filed within one month of the date on which the cause of action arose. Completion of the offence is the immediate forerunner of rising of cause of action. In other words, cause of action would arise soon after completion of the offence, and the period of limitation for filing the complaint would simultaneously start running."
With this legal provision on record it was contended by learned counsel that the cause of action arises to the complainant only on completion of the period of 15 days prescribed u/s 138 of the Negotiable Instruments Act.
Learned counsel for the respondent herein further relied upon a ruling reported in Goutham Television Centre and Another Vs. Apex Agencies and Another, in which the learned single judge has observed while interpreting the provisions contained in Sections 177 and 179 of the Criminal Procedure Code. In para. 9 of the judgment, the learned single judge of this court observed as under:
"Cause of action is a bundle of facts. Issuance of cheque, presentation of the cheque, endorsement of dishonour, issuance of a statutory notice and the location of the office of the person in whose favour the cheque was issued are all the factors which are to be taken into account for deciding the cause of action.'' Cause of action need not confine to a particular transaction where an offence is alleged to have been committed. In cases filed u/s 138 of the Negotiable Instruments Act, series of acts will result at different places. As already discussed (supra), giving the cheque by the accused to the complainant and presenting the same for collection by the complainant at his place will also be the facts constituting the offence. So, the place where the cheque has been issued also has got jurisdiction and the place where the intimation has been received from the collecting bank also confers jurisdiction."
Finally learned counsel pointed out a latest pronouncement of the apex court in Bhaskaran (K.) v. Sankaran Vaidhyan Balan (Criminal Appeal No. 1015 of 1999, dated September 29, 1999), since reported in K. Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, , which was obtained by learned counsel from the internet in which their Lordships were pleased to hold as under : ''
"Territorial jurisdiction--Dishonour of cheque Complaint can be filed at any of the places : (1) where the cheque was drawn ; (2) where the cheque was presented for encashment; (3) where the cheque was returned unpaid by drawee-bank ; (4) where notice in writing was given to drawer of cheque demanding payment ; and (5) where drawer of cheque failed to make payment within 15 days of receipt of notice."
In para. 11 of the judgment their Lordships were pleased to further observe as under (page 271 of 99 Comp Cas) :
" .... It must be remembered that the offence u/s 138 would not be completed with the dishonour of the cheque. It attains completion only with the failure of the drawer of the cheque to pay the cheque amount within the expiry of 15 days mentioned in Clause (c) of the proviso to Section 138 of the Act. It is normally difficult to fix up a particular locality as the place of failure to pay the amount covered by the cheque. A place, for that purpose, would depend upon a variety of factors. It can either be at the place where the drawer resides or at the place where the payee resides or at, the place where either of them carries on business. Hence, the difficulty to fix up any particular locality as the place of occurrence for the offence u/s 138 of the Act."
Considering the above ruling, we have no hesitation in holding that in the present case the notice of demanding the amount due was issued from the registered office located at Hyderabad and the payment was not made within 15 days and therefore the complainant was justified in filing the complaint before the Magistrate in Hyderabad.
Therefore, we hold that the complaint filed at Hyderabad is proper.
Thus, the reference is answered accordingly.
All the other petitions can be sent back to the learned judge to dispose of the said petitions as per the observations made by the Bench of this court.