TMI Blog2022 (2) TMI 1163X X X X Extracts X X X X X X X X Extracts X X X X ..... 142(2)(a), and the edicts of the Supreme Court in relation thereto in M/S BRIDGESTONE INDIA PVT. LTD. VERSUS INDERPAL SINGH [ 2015 (12) TMI 777 - SUPREME COURT] and M/S HIMALAYA SELF FARMING GROUP ANR. VERSUS M/S GOYAL FEED SUPPLIERS [ 2020 (9) TMI 1240 - SUPREME COURT] , it cannot be doubted that institution of the complaint case before the Trial Court was strictly in accordance with law, as obtaining presently. The Trial Court has jurisdiction over the area in which respondent No.1 maintains her bank account, being the account to which the cheque amount was to be credited. Therefore, the Trial Court clearly has territorial jurisdiction to entertain and deal with the matter. In the light of the law laid down by the Supreme Court in CC. ALAVI HAJI VERSUS PALAPETTY MUHAMMED [ 2007 (5) TMI 335 - SUPREME COURT] , a presumption arises as to the service of the demand notice upon the petitioner as the address was shown correctly and there is no evidence of the said notice being returned unserved. Further, as pointed out in the said decision, this is a matter for evidence and cannot constitute a ground for non-suiting the complainant at the threshold. It is for the petitioner to reb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi, for a sum of ₹ 5 lakh but when she deposited the said cheque at the Yes Bank Branch at Naraina Vihar in New Delhi for being credited to her bank account bearing No.05499300000605 in the Yes Bank Branch at Thangal Bazar, Imphal, it was dishonoured on the ground of insufficient funds . The complainant stated that Demand Notices dated 16.03.2020 were sent to the petitioner herein at both his known addresses, one at S-206, Panchasheel Park, New Delhi, and the other at Farm No.16, Defodil Lane, Satbari, Chatarpur, Delhi. As he failed to pay the amount due under the cheque within 15 days, as stipulated in the statute, she approached the Court of the learned Chief Judicial Magistrate, Imphal West (hereinafter, the Trial Court ), through her power of attorney holder, by way of the subject complaint. Process was issued by the Trial Court against the petitioner herein under the orders dated 09.02.2021 and 04.03.2021. Aggrieved by these developments, he filed the present quash petition. [3] An interim order was passed by this Court on 20.12.2021 to the effect that the warrant issued against the petitioner by the Trial Court should not be executed and leaving it open to him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two demand notices were sent to the petitioner s known addresses at New Delhi and Delhi and the same would be sufficient in law. He would point out that the address of the petitioner in the cause title of this criminal petition is the same as the one to which a demand notice was sent, viz., S-206, Panchasheel Park, New Delhi, and contend that the petitioner cannot deny receipt thereof. He would argue that no grounds are made out to hold that the Trial Court lacks territorial jurisdiction and pray for rejection of this quash petition. Both the learned counsel relied on case law in support of their respective contentions. [7] Section 138 of the Act of 1881 provides that when a cheque drawn by a person on a bank account maintained by him for payment of any amount of money to another person from out of that account for the discharge of any legally enforceable debt or other liability is returned by the bank unpaid, either because the amount of money in that account is insufficient to honour the cheque or it exceeds the amount arranged to be paid from that account, such person shall be deemed to have committed an offence and would be punishable with imprisonment for a term which ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated; or (b) if the cheque is presented for payment by the payee or holder in due course, otherwise than through an account, the branch of the drawee bank where the drawer maintains the account is situated. The Explanation thereto states that for the purpose of clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course maintains the account. [9] The newly added Section 142A is titled Validation for transfer of pending cases . Section 142A(1) states that notwithstanding anything contained in the Code of Criminal Procedure, 1973, or any judgment, decree, order or direction of any Court, all cases transferred to the Court having jurisdiction under Section 142(2), as amended by the Negotiable Instruments (Amendment) Ordinance, 2015 (Ordinance 6 of 2015), shall be deemed to have been transferred under this Act, as if that sub-section had been in force a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 720], another 2-Judge Bench of the Supreme Court again considered territorial jurisdiction of a Court to try an offence under Section 138 of the Act of 1881. In that case, the cheque was issued at Chandigarh and was presented at Chandigarh. The complainant, however, issued the demand notice from Delhi and the same was served upon the drawer of the cheque at Chandigarh. The case was instituted by the complainant at Delhi. In this situation, having considered the earlier decision in K.Bhaskaran (supra), the Supreme Court stated that it is one thing to say that sending of the notice is one of the ingredients for maintaining a complaint but it is another thing to say that dishonour of the cheque, by itself, constitutes an offence. According to the Supreme Court, receipt of the demand notice would ultimately give rise to the cause of action for filing a complaint. Issuance of the notice would not, by itself, give rise to a cause of action but communication of the notice would. The Bench held that for constituting an offence under Section 138, the notice must be received by the accused though it may be deemed to have been received in certain situations. The Bench therefore held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... territorial jurisdiction of Courts in relation to Section 138 of the Act of 1881. Relying on its earlier decision in Nishant Aggarwal (supra), the Bench held that Courts within whose jurisdiction the cheque is presented and dishonoured would also have jurisdiction to try the offence. In that case, the cheque was issued in Kolkata and presented in Delhi. As it was dishonoured, notice was issued from Delhi and proceedings were finally initiated at Delhi. The High Court, however, held that the Delhi Court did not have jurisdiction and asked the complainant to prosecute his case before the Kolkata Court. Disagreeing with this view, the Supreme Court affirmed that the Court within whose jurisdiction the dishonoured cheque was presented for encashment would also have jurisdiction to try the case. In effect, K.Bhaskaran (supra) was again reaffirmed. [15] The dichotomy between the views taken in K.Bhaskaran (supra) and later decisions, including Harman Electronics Private Limited (supra), was resolved by a 3-Judge Bench of the Supreme Court in Dasarath Rupsingh Rathod vs. State of Maharastra and another [(2014) 9 SCC 129]. Having considered the gamut of precedential law on the issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of exceeding arrangement , the company issued a demand notice but Inderpal Singh failed to pay the amount within the stipulated period. The company thereupon initiated proceedings against Inderpal Singh before the Court at Indore under Section 138 of the Act of 1981. Inderpal Singh raised the issue of territorial jurisdiction and the matter ultimately came before the Supreme Court. Reliance was placed by Inderpal Singh on Dashrath Rupsingh Rathod (supra), which held to the effect that the Court at the place where the cheque is dishonoured, viz., where the bank on which the cheque is drawn is located, would alone have jurisdiction to try the case under Section 138 of the Act of 1881. However, the company relied on the amended provisions of the Act of 1881 to overcome the legal position declared in Dashrath Rupsingh Rathod (supra). By virtue of these amended provisions and more particularly, Sections 142(2) and 142A, the Supreme Court observed that there was no room for any doubt that, with reference to an offence under Section 138 of the Act of 1881, the place where the cheque is delivered for collection, i.e., the branch of the bank of the payee or the holder in due cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Branch of Yes Bank for being credited to the said account. Mere presentation of the cheque at a Delhi Branch has no impact whatsoever in the light of the Explanation to Section 142(2)(a), which categorically states that even if the cheque is delivered in any other branch of the bank of the payee, it shall be deemed to have been delivered to the branch where the payee actually maintains an account. Therefore, presentation of the cheque at a Delhi Branch of Yes Bank is of no import at all. In the light of the amended provisions of the Act of 1881 and more so, Section 142(2)(a), and the edicts of the Supreme Court in relation thereto in Bridgestone India Pvt. Ltd. (supra) and M/s Himalaya Self Farming Group (supra), it cannot be doubted that institution of the complaint case before the Trial Court was strictly in accordance with law, as obtaining presently. The Trial Court has jurisdiction over the area in which respondent No.1 maintains her bank account, being the account to which the cheque amount was to be credited. Therefore, the Trial Court clearly has territorial jurisdiction to entertain and deal with the matter. [18] As regards service of the demand notice in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r about a month or two or a person who can get a fake endorsement made regarding his non-availability and can successfully avoid his prosecution, as the payee is bound to issue notice to him within a period of 30 days from the date of receipt of information about the dishonour of the cheque. The Supreme Court further pointed out that it is a matter of evidence and proof and even in a case where the demand notice is returned with the endorsement that the premises were found locked or the addressee was not available, it would be open to the complainant to prove at the trial, by evidence, that the endorsement was not correct and that the addressee, with knowledge of the notice, had deliberately avoided to receive the same. Applying the purposive construction or mischief rule propounded in Heydon s case [(1584) 76 ER 637], it was held that in interpreting a statute the Court must adopt that construction which suppresses the mischief and advances the remedy. In effect, the Supreme Court held that the question as to whether service of notice has been fraudulently refused by unscrupulous means and whether there was deemed service of the notice is essentially a question of fact and that mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt of the summons from the Court in respect of the complaint filed under Section 138 of the Act of 1881, make payment of the cheque amount and submit to the Court that he had made such payment within 15 days of the receipt of the summons and, therefore, the complaint is liable to be rejected. It was further observed that a person, who does not pay the cheque amount within 15 days of the receipt of the summons from the Court, cannot thereafter contend that there was no proper service of the demand notice as required under Section 138, by ignoring the statutory presumption to the contrary under Section 27 of the Act of 1897 and Section 114 of the Act of 1872. In that case, there was no averment in the complaint that the demand notice had even been sent to the correct address of the drawer. However, the returned envelope was annexed to the complaint and the same showed that the notice had been sent by registered post to the correct address and was returned with the endorsement addressee abroad . On these facts, the Supreme Court held that the requirement of Section 138 of the Act of 1881 as to service of a demand notice had been sufficiently complied with. Be it noted that in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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