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Andhra High Court · body

2011 DIGILAW 418 (AP)

R. Suresh Babu v. Sanigepally Mohan Rao

2011-06-08

R.KANTHA RAO

body2011
Judgment : 1. This criminal petition is filed under Section 482 Cr.P.C. to quash the entire proceedings in C.C.No.812 of 2007 pending on the file of the II Additional Munsif Magistrate, Ongole. 2. The proceedings are sought to be quashed on the ground that the II Additional Munsif Magistrate, Ongole has no jurisdiction to entertain the complaint filed by the first respondent under Section 138 of Negotiable Instruments Act. 3. Shortly stated, the facts relevant for considering the criminal petition are as follows: The wife of the petitioner/accused Smt.T.Shanthakumari, resident of Bangalore entered into an agreement with the first respondent/complainant at Bangalore to purchase a vacant site admeasuring 8050 square feet situate at Bangalore. Smt.T.Shanthakumari executed an agreement to sell dated 24.09.2006 in favour of the first respondent on 24.09.2006 at Bangalore. Under the said agreement to sell, the wife of the petitioner received Rs.25 lakhs and also further sum of Rs.2 lakhs subsequently towards sale consideration under two cheques. Thereafter, the first respondent having come to know about the disputes relating to the property sought to be sold, expressed his intention to repudiate the contract owing to defects in the title. It was agreed upon between the parties that the petitioner’s wife has to pay the amount back to the first respondent and in consequence thereof, the petitioner/accused issued two cheques dated 30.01.2007 for the amounts of Rs.10 lakhs and Rs.17 lakhs respectively drawn on State Bank of Mysore, Vyalikaval Branch, Bangalore. When the said cheques were presented by the first respondent for collection in Karur Vysya Bank, Bangalore, they were dishonoured with the endorsement “insufficient funds”. Thereafter, the first respondent got issued a legal notice dated 28.07.2007 to the petitioner demanding payment of cheque amount and also stating therein that on failure to pay the cheque amount, he would be constrained to file a complaint against the petitioner/accused under Section 138 of Negotiable Instruments Act. The said notice was issued from Ongole and after waiting for the requisite period, the first respondent filed a complaint under Section 138 of the Negotiable Instruments Act against the petitioner. 4. The said notice was issued from Ongole and after waiting for the requisite period, the first respondent filed a complaint under Section 138 of the Negotiable Instruments Act against the petitioner. 4. The present criminal petition is filed by the petitioner/accused to quash the entire proceedings in C.C.No.812 of 2007 which are the result of taking cognizance of the offence punishable under Section 138 of the Negotiable Instruments Act pursuant to the complaint filed by the first respondent in the Court of II Additional Munsif Magistrate, Ongole. 5. The only point arises for consideration in this criminal petition is whether the issuance of notice by the first respondent from Ongole to the petitioner/accused demanding payment of amounts under the cheques which were dishonoured and expressing his intention to file a complaint against the petitioner on his failure to pay the said amount would confer jurisdiction on the II Additional Munsif Magistrate, Ongole to entertain a complaint under Section 138 of the Negotiable Instruments Act. 6. The contention put-forth on behalf of the petitioner is that since no acknowledgement of notice sent was received by the first respondent, mere sending of notice from Ongole does not confer jurisdiction on the II Additional Munsif Magistrate, Ongole and the proceedings in C.C.No.812 of 2007 before him are liable to be quashed. 7. On the other hand, it has been argued on behalf of the first respondent/complainant that a bare reading of Section 138 of Negotiable Instruments Act would make it clear that one of the places at which cause of action arises is the place from where the payee or the holder in due course of the cheque makes a demand for payment of the cheque amount by giving notice in writing and therefore, since the first respondent in the instant case issued a notice in writing demanding payment of cheque amount within 15 days of the receipt of the notice and even though no acknowledgment is received from the petitioner/accused, the Court of Magistrate at Ongole has jurisdiction to take the cognizance of the offence under Section 138 of the Negotiable Instruments Act. 8. 8. In K. BHASKARAN v. SANKARAN VAIDHYAN BALAN AND ANOTHER( (1999) 7 SCC 510 ) the Supreme Court dealing with the jurisdiction of the Court in relation to taking cognizance of the offence under Section 138 of the Negotiable Instruments Act held as follows: “The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. The 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. It is not necessary that all the above five acts should have been perpetrated at the same locality. It is possible that each of those five acts could be done at five different localities. But a concatenation of all the above five is a sine qua non for the completion of the offence under Section 138 of the Act. 9. If the five different acts were done in five different localities any one of the courts exercising jurisdiction in one of the five local areas can become the place of trial for the offence under Section 138 of the Act. In other words, the complainant can choose any one of those courts having jurisdiction over anyone of the local areas within the territorial limits of which any one of those five acts was done. As the amplitude stands so widened and so expansive it is an idle exercise to raise jurisdictional question regarding the offence under Section 138 of the Act.” 10. However, in HARMAN ELECTRONICS PRIVATE LIMITED AND ANOTHER v. NATIONAL PANASONIC INDIA PRIVATE LIMITED ( (2009) 1 SCC 720 ) the Supreme Court took a different view despite referring to the above decision to the effect that issuance of notice would not by itself would give rise to a cause of action but communication of the notice only would give rise to cause of action. The Supreme Court is of the view that giving of notice, therefore, cannot have any precedence over the service and while issuance of a notice by the holder of a negotiable instrument is necessary, service thereof is also imperative. The Supreme Court is of the view that giving of notice, therefore, cannot have any precedence over the service and while issuance of a notice by the holder of a negotiable instrument is necessary, service thereof is also imperative. It is significant to notice that though apart from other decisions, the Supreme Court referred Bhaskaran’s case (1st cited supra), nowhere in the judgment it has been pointed out that the law down earlier inBhaskaran’s case (1st cited supra), is not correct. The Supreme Court in HARMAN ELECTRONICS PRIVATE LIMITED case (2nd cited supra) gave a different interpretation to the language employed in Section 138 of the Negotiable Instruments Act which indicates that issuing notice by the payee or the holder in due course give rise for cause of action for filing a complaint under Section 138 of the Negotiable Instruments Act. 11. In this context, it would be necessary to refer to Bhaskaran’s case (1st cited supra) wherein the Supreme Court explained the concept of the jurisdiction under Section 138 of the Negotiable Instruments Act in vivid terms. The Supreme Court in the said case clarified the jurisdictional issue as follows: “The context envisaged in Section 138 of the Act invites a liberal interpretation for the person who has the statutory obligation to give notice because he is presumed to be the loser in the transaction and it is for his interest the very provision is made by the legislature. The words in clause (b) of the proviso to Section 138 of the Act show that the payee has the statutory obligation to “make a demand” by giving notice. The thrust in the clause is on the need to “make a demand”. It is only the mode for making such demand which the legislature has prescribed. A payee can send the notice for doing his part for giving the notice. Once it is dispatched, his part is over and the next depends on what the sendee does. 12. If a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start running no matter that the payee sent the notice at the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different strategies and he could escape from the legal consequences of Section 138 of the Act. It must be borne in mind that the court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative measure.” 13. The Supreme Court specifically held that “any other interpretation can lead to a very tenuous position as the drawer of the cheque, liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice.” (Emphasis supplied). 14. Further in later judgment in SHAMSHAD BEGUM (SMT) v. B. MOHAMMED ( (2008) 13 SCC 77 ) relying onBhaskaran’s case (1st cited supra) the Supreme Court held as follows: “Thus it is clear, if the five different acts were done in five different localities any one of the courts exercising jurisdiction in one of the five local areas can become the place of trial for the offence under Section 138 of the Act. In other words, the complainant can choose any one of those courts having jurisdiction over any one of the local areas within the territorial limits of which any one of those five acts was done. As the amplitude stands so widened and so expansive it is an idle exercise to raise jurisdictional question regarding the offence under Section 138 of the Act.” 15. The Supreme Court in SHAMSHAD BEGUM’s case (3rd cited supra) while following the ratio in Bhaskaran’s case (1st cited supra) held that the offence under Section 138 of the Negotiable Instruments Act can be completed only with the concatenation of a number of acts. (Five components mentioned in Bhaskaran’s case (1st cited supra). The Supreme Court clarified the position held as follows: “It is not necessary that the five acts should have been perpetrated at the same locality. 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 Negotiable Instruments Act.” 16. In SHAMSHAD BEGUM’scase (3rd cited supra), the Karnataka High Court initially held that one of the components of the offence is giving notice in writing to the drawer of the cheque demanding payment of the cheque amount. The said action took place within the Mangalore jurisdiction and therefore, the petition for quashing the proceedings was without any merit. In SHAMSHAD BEGUM’scase (3rd cited supra), the Karnataka High Court initially held that one of the components of the offence is giving notice in writing to the drawer of the cheque demanding payment of the cheque amount. The said action took place within the Mangalore jurisdiction and therefore, the petition for quashing the proceedings was without any merit. It was also made clear by the Karnataka High Court that the presence of the appellant was not very necessary for continuation of the proceeding, on appropriate application being filed, the court can grant exemption from appearance. In the appeal the Supreme Court held that the judgment of the High Court of Karnataka does not suffer from any infirmity to warrant interference and consequently dismissed the appeal. 17. Section 178(d) of Cr.P.C. lays down that where an offence consists of several acts done in different local areas, it may be enquired into or tried by a court having jurisdiction over any of such local areas. Similarly, clause (b)(i) of Section 138 of the Negotiable Instruments Act is plain in its language that requirement for a payee or holder in due course of the Court is only to make a demand for payment of the cheque amount by giving notice in writing to the drawer and nothing more. The plain language of the proviso does not show that receipt of notice by the drawer of the cheque is a requirement for initiation of proceedings under Section 138 of the Negotiable Instruments Act. 18. The plain language of the proviso does not show that receipt of notice by the drawer of the cheque is a requirement for initiation of proceedings under Section 138 of the Negotiable Instruments Act. 18. Therefore, in view of the law laid down by the Supreme Court in Bhaskaran’s case (1st cited supra), which was followed subsequently in Shamshad Begum’s case (3rd cited supra) which are binding on me and from the language which is employed by the legislature in the statute which is plain, I hold that in the case on hand the Court at Ongole from where the first respondent issued notice to the petitioner/accused in writing demanding payment of amount under the cheques and expressing his intention to file a complaint on failure to pay also has jurisdiction to entertain the complaint under Section 138 of the Negotiable Instruments Act filed by the first respondent, I would like to add that communication or receipt of notice is a mixed question of law and fact capable of different interpretations and the said question can not be decided without adducing evidence at the trial and appreciation thereof by the Court. The contention of the petitioner that no part of cause of action arose at Ongole and that mere issuing of notice in writing by the first respondent to the petitioner does not confer jurisdiction to entertain a complaint by the Munsif Magistrate at Ongole is without any merit. Further, even for the sake of argument if it is viewed that Munsif Magistrate, at Ongole has no jurisdiction to entertain the complaint and take cognizance of the offence, it cannot be said that the entire proceedings in C.C.No.812 of 2007 are liable to be quashed. In such an event, the proper course open to the Munsif Magistrate, Ongole is to send the complaint to the court having jurisdiction to entertain the same. Viewed from any angle, therefore, the proceedings in C.C.No.812 of 2007 are not liable to be quashed. 18. In the result, the criminal petition is dismissed.