TMI Blog2024 (4) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... erent from where it was made or indorsed. In my opinion, therefore, merely because there is no prohibition on the cheque being presented for payment at a place different from where it is made or indorsed, Section 135 of the NI Act cannot be attracted - as far as a cheque is concerned, unless specifically made payable at some other place, it must be presented at the bank upon which it is drawn, that is, where the bank of the drawer is situated. This would also have the effect on the place where the offence under Section 138 of the NI Act is said to have been committed, as shall be discussed herein below. In DASHRATH RUPSINGH RATHOD VERSUS STATE OF MAHARASHTRA ANOTHER [ 2014 (8) TMI 417 - SUPREME COURT] , the Supreme Court has held that a reading of Section 138 of the NI Act in conjunction with Section 177 of the Cr.P.C. leaves no manner of doubt that the return of the cheque by the drawee bank alone constitutes the commission of the offence and indicates the place where the offence is committed. It held that the place, situs or venue of judicial inquiry and trial of the offence must logically be restricted to where the drawee bank is located. It held that the complainant is statutor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rge, Mr. Nishe Rajen Shonker, Mr. Keerthipriyan. E, Mr. Alim Anvar, Mr. Arkaneil Bhaumik Mr. Rayadurgam Bharat, Advs. For the Respondents Through: Mr. Shoaib Haider, APP. Mr. Gautam Dhamija, Adv. for R-2. JUDGMENT 1. This petition has been filed under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as 'Cr.P.C.') praying for quashing of the proceedings in the complaint under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') filed by respondent no. 2 herein, being CC No. 1397/2018, titled Sachin Kumar Parolia v. Right Choice Marketing Solutions JLT Ors.. Case of the Complainant: 2. The above complaint has been filed by the respondent no. 2, impleading the petitioners herein as accused nos. 1, 2, and 3 in the said complaint. 3. It is stated that petitioner no. 1 is an entity with its office in the United Arab Emirates (UAE) and is the sales and marketing wing of Right Choice Builders Private Limited, a company incorporated under the Companies Act, 2013, which is arrayed as accused no. 6 in the complaint. It is stated that the accused no. 6 has established various branches like Right Choice Properties, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that the accused thereafter requested respondent no. 2 not to present the cheques and also failed to repay the principal sum upon the expiry of the one-year period. On an arbitrary basis, they paid an amount of AED 50,000/- in the form of two cheques of AED 25,000/- each, making an assurance that the rest would be paid soon. 8. It is asserted that in January 2016, when respondent no. 2 called upon the accused at the head office at Pune, which is the registered address of accused no. 6, the petitioner nos. 1 and 3, on express instructions from petitioner no. 2, and accused nos. 4 and 5, issued ten fresh post-dated cheques towards the repayment of interest to respondent no. 2. These were spread over the entire year of 2016 and were issued with an undertaking that they shall be honoured as and when presented. 9. It is stated that respondent no. 2 presented the said cheques before the bankers, that is, National Bank of Abu Dhabi, and HSBC Bank, Middle East, and to the shock of respondent no. 2, the said cheques were returned dishonoured with the remarks insufficient funds . Upon repeated follow-ups, the petitioner nos. 1 and 3 again paid an arbitrary and ad hoc amount of AED 42, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturning Memo dated 07.12.2017. The cause of action further arose on 30.12.2017 when the Complainant herein through its counsel issued a statutory legal demand notice dated 30.12.2017 to the accused persons herein. Cause of action further arose on 16.01.2018 when even after the stipulated period of 15 days, the accused persons failed to pay the legitimate dues of the Complainant. 22. That the legal notice of demand was sent to the Accused persons within the stipulated period of limitations and thereafter this present complaint is also being filed within the period of limitation. 23. That the cheque in question was presented by the complainant with its banker at Greater Kailash, Delhi, where the complainant has been maintaining his bank account and the same has been returned unpaid by the banker of the complainant at Delhi. The aforesaid branch of the Complainant s bank comes under the territorial jurisdiction of this Hon ble Court and hence this Complaint. 16. I must herein note that by an order dated 27.08.2018 passed by the learned Additional Sessions Judge-04 and Special Judge (NDPS) South East, Saket Courts, New Delhi, the order dated 23.02.2018 passed by the learned Trial Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Dubai as also a legal opinion obtained, which show that in Dubai return of a cheque due to insufficiency of fund is no longer a criminal offence. 20. Placing reliance on Section 135 of the NI Act, he submits that it is only where the cheque is specifically made payable at a different place from where it was made, that the law applicable to the place where such cheque is made payable, shall become applicable. He submits that Section 135 of the NI Act, therefore, excludes the application of Section 70 of the NI Act, on which the learned counsel for the respondent no. 2 has placed reliance on, inasmuch as the said provision is based on a presumption which gets excluded because of Section 135 of the NI Act which is applicable to a foreign cheque. 21. He submits that, in the present case, the transaction in question admittedly took place in UAE; the cheque was drawn on Dubai based branch of a UAE Bank; there is no endorsement on the cheque that it is payable in India; the cheque is payable in the currency of UAE, that is, Emirati Dirham (AED); the respondent no. 2 was a resident of UAE at the time when the transaction had taken place; the petitioner no. 1 on whose behalf the cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of facts, and this Court should, therefore, refuse to exercise its jurisdiction under Section 482 of the Cr.P.C.. In support, he places reliance on the judgment of Supreme Court in HMT Watches Ltd. v. M.A. Abida Anr., (2015) 11 SCC 776. Analysis and Findings 28. I have considered the submissions made by the learned counsels for the parties. 29. From the complaint itself, it becomes evident that the respondent no. 2 had invested in the accused no. 1, that is, the petitioner no. 1 herein, a company registered and situated at Dubai, by issuing multiple cheques that were payable in Dubai, which were in foreign currency that is, AED. In return, the cheques which were issued by the petitioner no. 1 were drawn on National Bank of Abu Dhabi and in the foreign currency-AED. On return of some of the cheques as unpaid, the respondent no. 2 had earlier filed the proceedings before the Abu Dhabi Courts of First Instance and orders were also passed in favour of the respondent no. 2. 30. It is only on the non-compliance/non implementation of the said orders, that the respondent no. 2 thereafter presented the subject cheque to his bank at ICICI Bank, Greater Kailash-I, New Delhi, which was expec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced by such instrument is invalid according to the law of the country wherein it was entered into does not invalidate any subsequent acceptance or indorsement made thereon within India. 137. Presumption as to foreign law. The law of any foreign country regarding promissory notes, bills of exchange and cheques shall be presumed to be the same as that of India, unless and until the contrary is proved. 38. Section 134 of the NI Act states that in the absence of a contract to the contrary, a liability of the maker or drawer of a foreign cheque is regulated in all essential matters by the law of the place where the instrument was made. In Pale Horse Designs (supra), the High Court of Madras has observed that the term liability mentioned in Section 134 of the NI Act means only the civil liability. Therefore, unless there is a contract to the contrary shown, in case of a foreign cheque, as is in the present case, the civil liability of the drawer, that is, the petitioner no. 1, is governed by the law of place where the cheque was drawn, that is, Dubai. Reliance in this regard is also placed on the judgment of the Andhra Pradesh High Court in Vinjanamapati Anantaramaiah, (Supra). 39. Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 138 of the NI Act is said to have been committed, as shall be discussed herein below. 44. Section 137 of the NI Act prescribes a presumption that the law of any foreign country regarding the cheque shall be presumed to be the same as that of India, unless and until, the contrary is proved. Though, the learned counsel for the petitioners has sought to contend that the dishonour of cheque is no longer visited with a criminal liability in UAE, this would be a question of fact and a matter to be decided on evidence and cannot be a ground to quash the complaint at this stage. 45. This now brings me to Section 138 of the NI Act, which reads 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 of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the place, situs or venue of judicial inquiry and trial of the offence must logically be restricted to where the drawee bank is located. It held that the complainant is statutorily bound to comply with Section 177, etc., of the Cr.P.C. and therefore, the place or situs where the Section 138 complaint is to be filed is not of his choosing; the territorial jurisdiction is restricted to the court within whose local jurisdiction the offence was committed, which is where the cheque is dishonoured by the bank on which it is drawn. The Supreme Court summed up its conclusions as under: - 58. To sum up: 58.1. An offence under Section 138 of the Negotiable Instruments Act, 1881 is committed no sooner a cheque drawn by the accused on an account being maintained by him in a bank for discharge of debt/liability is returned unpaid for insufficiency of funds or for the reason that the amount exceeds the arrangement made with the bank. 58.2. Cognizance of any such offence is however forbidden under Section 142 of the Act except upon a complaint in writing made by the payee or holder of the cheque in due course within a period of one month from the date the cause of action accrues to such paye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period; (c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138. (2) The offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction, (a) if the cheque is delivered 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 through an account, the branch of the drawee bank where the drawer maintains the account, is situated. Explanation . For the purposes 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, as the case may be, maintains the account. 49. In view of the above amendment, and more speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is made or endorsed, iii) law applicable to negotiable instruments which are made in accordance with law of India even though made out of India and iv) presumption as to the foreign law in this regard. There are four sections in Chapter XVI. 24. Section 134 is to the effect that the liability of the maker or drawer of a foreign negotiable instrument, in the absence of a contract to the contrary, shall be regulated in all essential matters by the law of place where the instrument was made. In respect of such instruments, the liabilities of acceptor or indorser alone shall be governed by the law of the place where the instrument is made payable. From Section 134 it is quite clear that the liability of a foreign negotiable instrument shall be governed by law of the place where the instrument was made in all essential matters. In this case, it is not in dispute 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. It is again reiterated that the said section deals with the question of civil liability and not criminal liability. 25. Sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the same as a referee to law relating to criminal liability found in the next chapter also, it was held by the learned single judge of this court in the said case that the instrument made in Singapore was valid in accordance with Indian law. Here again this court wants to remind that Section 137 also deals with the presumption of law of foreign country regulating civil rights and liabilities in respect of negotiable instruments. When an Act is not generally recognised by the international community, by a general convention, treaty or a universal declaration to be an offence, no presumption can be made that, simply because such an act made is punishable as an offence under the law of India, the same shall have also been made punishable under the law of any foreign country. It must be kept in mind that though the liability is civil in nature, by a special provision under Section 138 of the Negotiable Instruments Act, 1881, the dishonour of a cheque when the cheque amount is not paid within a specified time after the receipt of statutory notice of demand, it is made an offence. The section has been placed in Chapter XVII of Negotiable Instruments Act, 1881. Therefore, the presump ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heque, the failure to make payment of the cheque after receipt of the statutory notice, were all committed not in India, but in USA, the drawer of the cheque cannot be prosecuted in India for an offence under Section 138 of the NI Act. 54. In the present case, due to the amendment in Section 142 of the NI Act, now the dishonour of the cheque, due to its presentation for payment at the bank of the respondent no. 2 at Delhi, is deemed to have taken place at Delhi. Though, Section 134 of the NI Act states that in absence of a contract to the contrary, the liability of the drawer of a foreign cheque is regulated in all essential matters by the law of the place where he made the cheque, there is nothing in the said provision which would exclude the application of Section 138 of the NI Act read with Section 142 of the NI Act. Merely because the payee or holder in due course of a foreign cheque chooses to present the cheque in India out of mala fide, the application of the provision of Section 138 of the NI Act and the jurisdiction of the court where such cheque is deposited for payment, cannot be ousted. 55. It is also to be kept in mind that Section 138 of the NI Act was inserted with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated, inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained. (2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner of place of investigating, inquiring into, trying or otherwise dealing with such offences. 58. The Supreme Court in the judgment of P. Mohanraj (Supra) has held that the proceedings for an offence under Section 138 of the NI Act are almost in the nature of a civil wrong which has been given criminal overtones. It can be said to be a civil sheep in a criminal wolf s clothing , as it is the interest of the complainant/victim that is sought to be protected, the larger interest of the State being subsumed in the complainant/victim alone moving a court in cheque bouncing cases. It was further observed that it is in actuality a hybrid provision to enforce payment of a bounced cheque. It is because of such a nature of the offence under Section 138 of the NI Act, that the Legislature in its wisdom has used the term cause of action in Section 142 of the NI Act. While inter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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