2008 (11) TMI 654 - SC - Companies Law

Whether the cause of action has arisen at all as the notice sent by the complainant to the accused was returned as unclaimed ? Held that - As was noted in K. Bhaskar s case 1999 (9) TMI 941 - SUPREME COURT OF INDIA it is possible that each of those five acts could be done at five different localities. But concatenation of all the above five is sine qua non for the completion of the offence under Section 138 of the Act.

Summary

Issues:
Challenge to jurisdiction of trial court in a case related to Section 138 of the Negotiable Instruments Act, 1881.

Analysis:
The appeal before the Supreme Court challenged the judgment of a learned Single Judge of the Karnataka High Court, which dismissed a petition filed under Section 482 of the Code of Criminal Procedure. The petition sought to quash proceedings in a case before the Vth JMF Court Mangalore, where the appellant was accused of an offence under Section 138 of the Negotiable Instruments Act. The appellant argued that the Mangalore Court lacked jurisdiction as the agreement between the parties was made in Bangalore, and the parties resided in Mangalore, with the cheques being returned from banks in Bangalore. However, the respondent contended that as the notice demanding payment of the cheque amount was sent from Mangalore, the Mangalore Court had jurisdiction. The High Court agreed, emphasizing that giving notice in writing was a crucial component of the offence, and since this occurred in Mangalore, the petition lacked merit. The High Court also noted that the appellant could seek exemption from appearance if deemed unnecessary for the proceedings to continue.

The appellant's counsel argued in support of the appeal that the Mangalore Court lacked jurisdiction, while the respondent's counsel supported the High Court's judgment. The Supreme Court referred to the case of K. Bhaskaran v. Sankaran Vaidhyan Balan & Anr. and highlighted that for the offence under Section 138 of the Act, a concatenation of five acts is essential, which may occur in different localities. The Court clarified that any court having jurisdiction over any of the local areas where these acts took place could try the case. The Court also emphasized that the completion of the offence required the fulfillment of specific acts, including drawing the cheque, presenting it to the bank, returning it unpaid, giving written notice demanding payment, and the drawer's failure to make payment within 15 days of receiving the notice.

Ultimately, the Supreme Court upheld the High Court's judgment, stating that it did not suffer from any infirmity warranting interference. The appeal was dismissed, affirming the jurisdiction of the Mangalore Court to try the case based on the location where the crucial act of giving notice in writing occurred.