JUDGEMENT
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(1.)Leave granted in Special Leave Petitions. These
Appeals raise a legal nodus of substantial public importance
pertaining to Court's territorial jurisdiction concerning
criminal complaints filed under Chapter XVII of the
Negotiable Instruments Act, 1881 (for short, 'the NI Act').
This is amply adumbrated by the Orders dated
3.11.2009 in I.A.No.1 in CC 15974/2009 of the three-
Judge Bench presided over by the then Hon'ble the Chief
Justice of India, Hon'ble Mr. Justice V.S. Sirpurkar and
Hon'ble Mr. Justice P. Sathasivam which SLP is also
concerned with the interpretation of Section 138 of the
NI Act, and wherein the Bench after issuing notice on the
petition directed that it be posted before the three-Judge
Bench.
PRECEDENTS
(2.)The earliest and the most often quoted decision
of this Court relevant to the present conundrum is K. Bhaskaran v. Sankaran Vaidhyan Balan, 1999 7 SCC 510
wherein a two-Judge Bench has, inter alia, interpreted
Section 138 of the NI Act to indicate that, "the offence under
Section 138 can be completed only with the concatenation of
a number of acts. Following are the acts which are
components of the said offence: (1) Drawing of the cheque,
(2) Presentation of the cheque to the bank, (3) Returning the
cheque unpaid by the drawee bank, (4) Giving notice in
writing to the drawer of the cheque demanding payment of
the cheque amount, (5) Failure of the drawer to make
payment within 15 days of the receipt of the notice." The
provisions of Sections 177 to 179 of the Code of Criminal
Procedure, 1973 (for short, 'CrPC') have also been dealt with
in detail. Furthermore, Bhaskaran in terms draws a
distinction between 'giving of notice' and 'receiving of
notice'. This is for the reason that clause (b) of proviso to
Section 138 of the NI Act postulates a demand being made
by the payee or the holder in due course of the dishonoured
cheque by giving a notice in writing to the drawer thereof.
While doing so, the question of the receipt of the notice has
also been cogitated upon.
(3.)The issuance and the receipt of the notice is
significant because in a subsequent judgment of a
Coordinate Bench, namely, Harman Electronics Pvt. Ltd. v. National Panasonic India Pvt. Ltd., 2009 1 SCC 720
emphasis has been laid on the receipt of the notice, inter
alia, holding that the cause of action cannot arise by any act
of omission or commission on the part of the 'accused',
which on a holistic reading has to be read as 'complainant'.
It appears that Harman transacted business out of
Chandigarh only, where the Complainant also maintained an
office, although its Head Office was in Delhi. Harman issued
the cheque to the Complainant at Chandigarh; Harman had
its bank account in Chandigarh alone. It is unclear where the
Complainant presented the cheque for encashment but it
issued the Section 138 notice from Delhi. In those
circumstances, this Court had observed that the only
question for consideration was "whether sending of notice
from Delhi itself would give rise to a cause of action for
taking cognizance under the NI Act." It then went on to
opine that the proviso to this Section "imposes certain
further conditions which are required to be fulfilled before
cognizance of the offence can be taken." We respectfully
agree with this statement of law and underscore that in
criminal jurisprudence there is a discernibly demarcated
difference between the commission of an offence and its
cognizance leading to prosecution. The Harman approach is
significant and sounds a discordant note to the Bhaskaran
ratio. Harman also highlights the reality that Section 138 of
the NI Act is being rampantly misused so far as territorial
jurisdiction for trial of the Complaint is concerned. With the
passage of time equities have therefore transferred from one
end of the pendulum to the other. It is now not uncommon
for the Courts to encounter the issuance of a notice in
compliance with clause (b) of the proviso to Section 138 of
the NI Act from a situs which bears no connection with the
Accused or with any facet of the transaction between the
parties, leave aside the place where the dishonour of the
cheque has taken place. This is also the position as regards
the presentation of the cheque, dishonour of which is then
pleaded as the territorial platform of the Complaint under
Section 138 of the NI Act. Harman, in fact, duly heeds the
absurd and stressful situation, fast becoming common-place
where several cheques signed by the same drawer are
presented for encashment and requisite notices of demand
are also despatched from different places. It appears to us
that justifiably so at that time, the conclusion in Bhaskaran
was influenced in large measure by curial compassion
towards the unpaid payee/holder, whereas with the passage
of two decades the manipulative abuse of territorial
jurisdiction has become a recurring and piquant factor. The
liberal approach preferred in Bhaskaran now calls for a
stricter interpretation of the statute, precisely because of its
misemployment so far as choice of place of suing is
concerned. These are the circumstances which have
propelled us to minutely consider the decisions rendered by
two-Judge Benches of this Court.