VINAY KUMAR SHAILENDRAversusDELHI HIGH COURT LEGAL SERVICES COMMITTEE AND ANR.

                        [2014t9 S.C.R. 510


A               VINAY KUMAR SHAILENDRA
                              v.
      DELHI HIGH COURT LEGAL SERVICES COMMITTEE
                          AND ANR.
               (Civil Appeal No. 8468 of 2014)
B
                       SEPTEMBER 4, 2014
            [T.S. THAKUR, V. GOPALA GOWDA AND
                      C. NAGAPPAN, JJ.]

C         Negotiable Instruments Act, 1881 - s. 138 - Complaint
     under, for dishonour of cheque - Territorial jurisdiction upon
     the courts to take cognizance - Held: Courts should take the
    jurisdiction in cheque dishonour cases only if the drawee
    bank who dishonoured the cheque is situated within the
o   jurisdiction of the Court taking cognizance - On facts, issue
     of a notice from Delhi or deposit of cheque in a Delhi bank
    by the payee or receipt of the notice by the accused
     demanding payment in Delhi would not confer jurisdiction
     upon the Courts in Delhi.
E
      In these appeals, the direction issued by the High
  Court to return aJlthe complaints filed under Section 138
  of the Negotiable Instrument Act, 1881 in which
  Metropolitan Magistrates in Delhi have taken cognizance
  only because the statutory notices in terms of proviso to
F Section 138 of the Act demanding payment against the
  dishonoured cheque have been issued to the drawers of
  the cheque from Delhi, have been challenged.

         Dismissing the appeals, the Court
G
        HELD: The order passed by the High Court of Delhi
    simply directs return of complaints in cases where the
    same have been filed only because the statutory notices
    have been issued from Delhi. The direction proceeds on
H                                510
VINAY KUMAR SHAILENDRA v. DELHI HIGH COURT 511
          LEGAL SER. COMMITTEE
the basis that issue of statutory'notices from Delhi by        A
itself is not sufficient to confer jurisdiction on the Delhi
Courts to entertain the complaints. The issue of a notice
from Delhi or deposit of the cheque in a Delhi bank by
the payee or receipt of the notice by the accused
demanding payment in Delhi would not confer                    B
jurisdiction upon the Courts in Delhi. What is important
is whether the drawee bank who dishonoured the
cheque is situate within the jurisdiction of the Court
taking cognizance. In that view, there is no reason to
interfere with the order passed by the High Court which        C
simply requires the Magistrate to examine and return the
complaints if they do not have the jurisdiction to entertain
the same, keeping in view the decision of this Court in
Dashrath's case. [Para 5, 6) [514-F-G; 517-A-D]

   Harman Electronics Private Limited and Anr. v. National     D
Panasonic India Private Limited 2008. (17) SCR 487:(2009)
1 SCC 720; Dashrath Rupsingh Rathod v. State of
Maharashtra and Anr. (201~) 9 SCALE 97 - relied on.

    K. Bhaskaran v. Sankaran Vaidhyan Ba/an 1999 (3)           E
Suppl. SCR 271:(1999) 7 SCC 510; Dwarka Nath v. Income-
tax Officer, Special Circle, D Ward, Kanpur and Anr. 1965
 SCR 536 :AIR 1966 SC 81; Air India Statutory Corporation
and Ors. V. United Labour Union and Ors. 1996 (9) Suppl.
 SCR 579 :(1997) 9 SCC 377; Ada/at Prasad Roop/al v.           F
Jindal & Ors. (2004) 7 SCC 338 - referred to.
                    Case Law Reference :
  .1999 (3) Suppl. SCR 271 Referred to        Para 2, 5
   1965 SCR 536                Ref~rred to    Para· 3          G

   1996 (9) Suppl. SCR 579 Referred to        Para 3
   (2004) 7 SCC 338            Referred to    Para 3

                                                               H
    512        SUPREME COURT REPORTS [2014] 9· S.C.R.


A     2008 (17) SCR 487             Relied on       Para 5, 6
      (2014) 9 SCALE 97             Relied on       Para 5, 6

        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    8468 of 2014.
B
        From the Judgment and Order dated 23.09.2009 of the
    High Court of Delhi at New Delhi in WP (C) No. 11911 of 2009.

                                  WITH

C Civil Appeal No. 8469 of 2014.

       Vinay Kumar Shailendra, (In Person), Subhro Sanyal,
  Worthing Kasar, Vaibhav Rai Asithana, K.R. Sasiprabhu, E.C.
  Agrawala, Puja Sharma, Liz Mathew, K. Datta, Manish
D Srivastava, Rahul Malhotra, Praveen Agrawal for the Appellant.

         Annam D.N. Rao, A. Venketesh, Sudipto Sircar, Neelam
    Jain, Vaishali R., Shailender Bhardwaj, Subramonium Prasad,
    Anil Katiyar for the Respondents.
E
          The Judgment of the Court was delivered by

          T.S. THAKUR, J. 1. Leave granted.

       2. These appeals arise out of a judgment dated 23rd
F September, 2009 passed by a Division Bench of the. High
  Court of Delhi in W.P. (C) No. 11911 of 2009 whereby the High
  Court has in.voked its jurisdiction under Article 226 of the
  Constitution. of India read with Section 482 of Gr:P.C. and
G directed return of all complaints filed under Section 138 pf the
  Negotiable· Instrument Act, 1881 in which the Metropolitan
  Magistrates in Delhi have taken cognizance only because the
  statutory notices in terms of proviso to Section 138 of the Act
  have been issued to the drawers of the cheque from Delhi. The
H matter arose out of a writ petition filed by ~he Delhi High Court
 VINAY KUMAR SHAILENDRA v. DELHI HIGH COURT 513
     LEGAL SER. COMMITTEE [T.S. THAKUR, J.]
Legal Services Committee in public interest pointing out that         A
a very large number of complaints under Section 138 of the Act
were pending in Courts of Metropolitan Magistrates in Delhi in
which cognizance had been taken although the Courts
concerned had no territorial jurisdiction to do so. The
Committee's case before the High Court was that such                  B
complaints were filed among others by financial institutions and
banks only on the ground that the statutory notices demanding
payment against the dishonoured cheque had been issued
from Delhi. Issue of a notice demanding payment of the
dishonoured cheque was not, however, sufficient to confer             c
jurisdiction upon the Courts in Delhi argued the Committee.
Reliance in support was placed upon the decision of this Court
in Harman Electronics Private Limited and Anr. v. National
Panasonic India Private Limited (2009) 1 SCC 720. The
Committee's grievance was that notwithstanding a clear                D
exposition of law on ttie subject by this Court in Harman's case
 (supra) complaints had been filed and cognizance taken by the
Courts in Delhi, relying upon the decision of this Court in K.
Bhaskaran v. Sankaran Vaidhyan Ba/an (1999) 7 SCC 510.
 It was in terms contended before the High Court that in the light    E
 of th!!! pronouncement of this Court in Harman's case (supra)
the complaints could not have been entertained nor could the
accused persons be summoned for trial in the Courts in Delhi.
 It was also argued that number of such complaints is so large
 that th.e Magistrates in Delhi were unable to handle and
 effectively manage the docket explosion and attend to what was       F
 otherwise within their jurisdiction and called for their immediate
 attention.

     3. The contentions urged by the Committee found favour
 with the High Court who relying upon the decisions of this Court     G
  in Dwarka Nath v. Income-tax Officer, Special Circle, D Ward,
 Kanpilr and Anr. (AIR 1966 SC 81) an(:! Air India Statutory
--Corporation and Ors. V. United Labour-Union and Ors. (1997)
 9 SCC 377 held that the Constitution did not place any fetters
 on the extraordinary jurisdiction exerdsable by the High Court       H
    514         SUPREME COURT REPORTS {2014] 9 S.C.R.


A   in a situation where Courts are flooded with complaints which
    they had no jurisdiction to entertain. The High Court further held
    that a direction for return of the complaints for presentation
    before the competent Courts was in the circumstances
    necessary, as Magistrates who had issued the summons were
s   unable to dismiss the complaints suo moto in the light of the
    decision of this Court in Ada/at Prasad Roop/al v. Jindal & Ors.
    (2004) 7  sec   338. The Higll Court accordingly allowed the writ
    petition with the following directions:

          "Consequently, in exercise of power under Article 226 of
c         the Constitution read with Section 482 of Code of Criminal
          Procedure, we direct return to the complainants for
          presentation in the Court of competent jurisdiction all
          those criminal complaints filed under Section 138 of NI
          Act that are pending in the courts of Metropolitan
D         Magistrates in Delhi in which cognizance has been taken
          by them without actually having territorial jurisdiction. n

       4. The appellant who is a practicing Advocate of the High
  Court of Delhi has, with the permission of this Court, filed this
E appeal which was referred for hearing to a three-Judge Bench
  by an order dated 3rd November, 2009. That is precisely how
  the present appeal alongwith the connected appeal filed by
  lndiabulls Financial Services Ltd. against the very same order
  passed by the High Court have come up before us.
F      5. We have heard learned counsel for the parties at some
  length. The order passed by1 the High Court simply directs
  return of complaints in cases where the same have been filed
  only because the statutory notices have been issued from Delhi.
  The direction proceeds on the basis that issue of statutory
G notices from Delhi by itself is not sufficient to confer jurisdiction
  on the Delhi Cou~s to entertain the complaints. Reliance has
  been placed for that proposition upon the decision of this Court
  in Harman's case (supra). In Dashrath Rupsingh Ratbod v.
  State of Maharashtra and Anr. (2014) 9 SCALE 97 we bave
H had an occasion to consider whether the view expressed by
VINAY KUMAR SHAILENDRA v. DELHI HIGH COURT 515
    LEGAL SER. COMMITTEE [T.S. THAKUR, J.]
this Court in K. Bhaskaran's case (supra) was sound and              A
whether complaints under Section 138 could be maintained at
a place other than the place where the drawee bank is situate.
Answering the question in the negative this Court held that an
offence under Section 138 is committed no sooner the cheque
issued on an account maintained by the drawer with a bank and        B
representing discharge of a debt or a liability in full or part is
dishonoured on the ground of i.nsufficiency of funds or on the
ground that the same exceeds the arrangements made with the
bankei:. Prosecution of the offender and cognizance of the
commission of the offence is, however, deferred by the proviso       c
to Section 138 till such time the complainant has the cause of
action to institute such proceedings. This Court found that the
proviso to Section 138 does not constitute ingredients of the
offence punishable under Section 138. The legal position on
the subject was summed up in the following words:
                                                                     D
     "To sum up:

     (i) 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             E
     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.

     (ii) Cognizance of any such offence is however forbidden        F
     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 payee or holder
     under clause (c) of proviso to Section 138.
                                                                     G
     (iii) The cause of action to file a complaint accrues to a
     complainant/payee/holder of a cheque in dt1.e course if

            (a) the dishonoured cheque is presented to the
                                                                     H
    516        SUPREME COURT REPORTS [2014] 9 S.C.R.


A                drawee bank within a period of six months from the
                 date of its issue.

                 (b) If the complainant has demanded payment of
                 cheque amount within thirty days of receipt of
                 information by him from the bank regarding the
B
                 dishonour of the cheque and

                 (c) If the drawer has failed to pay the cheque
                 amount within fifteen days of receipt of such notice.

c         (iv) The facts constituting cause of action do not
          constitute the ingredients of the offence under Section ,
          138 of the Act.

          (v) The proviso to Section 138 simply postpones/defers
          institution of criminal proceedings and taking of
D         cognizance by the Court till such time cause of action in
          terms of clause (c) of proviso accrues to the complainant.

          (vi) Once the cause of action accrues to the complainant,
          the jurisdiction of the Court to try the case will be
E         determined by reference to the place where the cheque
          is dishonoured.

          (vii) The general rule stipulated under Section 177 of
          Cr. P. C applies to cases under Section 138 of the
          Negotiable Instruments Act. Prosecution in such cases
F
          can, therefore, be launched against the drawer of the
          cheque only before the Court within whose jurisdiction the
          dishonour takes place except in situations where the
          offence of dishonour of the cheque punishable under.
          Section 138 is committed along with other offences in a
G         single transaction within the meaning of Section 220(1)
          read with Section 184 of the Code of Criminal Procedure
          or is covered by the provisions of Section 182(1) read
          with Sections 184 and 220 thereof."

H         6. In the light of the above pronouncement of this Court we
  VINAY KUMAR SHAILENDRA v. DELHI HIGH COURT 517
      LEGAL SER. COMMITIEE [T.S. THAKUR, J.]
  have no hesitation in holding that the issue of a notice from           A
  Delhi or deposit of the cheque in a Delhi bank by the payee or
· receipt of the notice by the accused demanding payment in
  Delhi would not confer jurisdiction upon the Courts in Delhi.
  \Nhat is important is whether the drawee bank who dishonoured
  the cheque is situate within the jurisdiction of the Court taking       B
  cognizance. In that view, we see no reason to interfere with the
  order passed by the High Court which simply requires the
  Magistrate to examine and return the complaints if they do not
  have the jurisdiction to entertain the same in the light of the legal
  position as stated in Harman's case (supra). All that we need           c
 .to add is tl:lat while examining the question of jurisdiction the
  Metropolitan Magistrates concerned to whom the High Court
  has issued directions shall also keep in View the decision of
  this Court in Dashrath's case (supra).

      7. With the above observations these appeals fail and are           D
 hereJ:>y dismissed but in the circumstances without any orders
 as to costs.
· Nidhi Jain.                                       Appeals dismissed.