2013 (11) TMI 95 - SC - Indian Laws

Jurisdiction of court - whether the Court within the jurisdiction whereof, the complainant had presented the dishonoured cheque (issued by an accused), had the jurisdiction to entertain a petition filed under Section 138 of the Negotiable Instruments Act - Held that - No doubt Section 138 of the Act does not require that the notice should be given only by post therefore, uphold the conviction of the offence under Section 138 of the Act, but we set aside the sentence awarded by the High Court for enabling the trial court to pass orders on the question of sentence and the compensation, if any payable - High Court erred in concluding that the courts at Delhi, did not have the jurisdiction to try the petition filed by the appellant under Section 138 of the Negotiable Instruments Act. The impugned order dated 27.4.2012 passed by the High Court is accordingly liable to be set aside - Decided in favour of Appellant.

Summary

Issues Involved:
1. Territorial jurisdiction under Section 138 of the Negotiable Instruments Act.
2. Application of precedents from K. Bhaskaran, Harman Electronics, and other relevant cases.

Detailed Analysis:

1. Territorial Jurisdiction under Section 138 of the Negotiable Instruments Act:
The primary issue in this case was whether the court within whose jurisdiction the complainant presented the dishonoured cheque had the authority to entertain a petition under Section 138 of the Negotiable Instruments Act. The Supreme Court affirmed that the court where the cheque was presented for encashment has jurisdiction. This was based on the precedent set in K. Bhaskaran vs. Shankaran Vaidhyam Balan, which identified five components constituting the offence under Section 138:
- Drawing of the cheque.
- Presentation of the cheque to the bank.
- Returning the cheque unpaid by the drawee bank.
- Giving notice in writing to the drawer demanding payment.
- Failure of the drawer to make payment within 15 days of receiving the notice.

The Court concluded that the complainant could choose any one of these places to file a complaint, thereby widening the scope of territorial jurisdiction.

2. Application of Precedents:
The judgment referenced multiple precedents to support its conclusion:
- K. Bhaskaran Case: This case established that the jurisdiction for offences under Section 138 could be determined by any of the five components of the offence, allowing the complainant to choose the jurisdiction.
- Harman Electronics Case: This case was distinguished on the grounds that it dealt with the jurisdiction based on the place of issuance of notice, not the place of presentation or dishonour of the cheque. The Supreme Court clarified that Harman Electronics did not deviate from the principles laid down in K. Bhaskaran.
- FIL Industries Limited vs. Imtiyaz Ahmed Bhat: This case reaffirmed the principles laid down in K. Bhaskaran, emphasizing that the court where the cheque was presented for encashment has jurisdiction.

Judgment Summary:
The Supreme Court held that the High Court erred in concluding that the courts at Delhi did not have jurisdiction to try the complaint under Section 138 of the Negotiable Instruments Act. The High Court's decision was not in consonance with the decision rendered in Nishant Aggarwal's case, which affirmed that the court where the dishonoured cheque was presented for encashment has jurisdiction. The Supreme Court set aside the High Court's order and allowed the appeal, emphasizing that the determination was based on the factual position taken into consideration by the High Court.

The judgment also allowed for the possibility that the respondent could raise an objection on the issue of jurisdiction based on the factual assertion that the cheque was presented at Faridabad, which should be entertained and disposed of in accordance with law.