Hon'ble Gujarat High Court while dealing with the issue of territorial jurisdiction of the court under Section 138 of the Negotiable Instrument Act, 1981 has distinguished on facts the land mark judgement of Hon'ble Supreme Court of India in the case of M/s HARMAN ELECTRONIC (P) LTD. & ANR Vs. M/s NATIONAL PANASONIC INDIA LTD., reported at 2009 AIR SCW 410 relying upon the division bench judgement of Bombay High Court and various earlier Supreme Court Judgement.
It has been held after discussing Section 177 of Code of Criminal Procedure that any court within whose jurisdiction either of the following acts has occured i.e. (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, is competent and have jurisdiction to try the case u/s 138 of the Negotiable Instruments Act, 1981.
The High Court inter alia observed as under:-
“11. In paragraph 13, the Division Bench of the Bombay High Court has considered the decision of the Hon'ble Supreme Court in the case of SHAMSHAD BEGAM (SMT)(Supra), which reads as under;
“13. In SHAMSHAD BEGAM (SMT), a Single Judge of the Karnataka High Court had dismissed the petition under Section 482 of the Code where a prayer was made to quash the case pending on the file of learned Magistrate at Mangalore arising out of Section 138 of the NI Act. The appellant accused had filed the petition in the Karnataka High Court on the ground that the Mangalore Court had no jurisdiction to try the case because the agreement was entered into at Bangalore and the cheques were returned by the Banks at Bangalore. The respondent-complainant stated that before issuing the notice, he had shifted his residence to Mangalore and, therefore, he had issued the notice from Mangalore, which was received by the appellant-accused and the reply was sent by her to the appellant-accused at Mangalore address. As the notice in writing to the drawer of the cheque demanding payment of cheque amount was sent from Mangalore, the Court at Mangalore has jurisdiction to try the case. The High Court noted that one of the components of the offences was giving notice in writing to the drawee of the cheque by demanding payment of the cheque amount. The said action had taken place in Mangalore and, therefore, the petition was without merit. The Supreme Court referred to K. BHASKARAN and quoted extensively from it. The Supreme Court reaffirmed that offence under Section 138 of the NI Act has five components i.e. (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 and (5) failure of the drawer to make payment within 15 days of the receipt of the notice. The Supreme Court reiterated that it is not necessary that the above five acts should have been perpetrated at the same locality and it is possible that each of these five acts could be done at five different localities. The Supreme Court refused to interfere with the High Court's order. In our opinion, the law of jurisdiction has been succinctly stated in K. BHASKARAN followed by SHAMSHAD BEGAM (SMT) and we need to say nothing more on this aspect.”
11.1. Before the Bombay High Court, it was the case on behalf of the accused that the cheque was drawn on Syndicate Bank, Angamaly Branch, Ernakulam District, Kerala and the accused is doing business at Ernakulam and the dealership agreement was entered into at District Ernakulam and the notice was issued at Ernakulam and the cheque was handed over in Kerala and, therefore, Mumbai Court would not have any jurisdiction. On considering the aforesaid two decisions of the Hon'ble Supreme Court, and other decisions on the point, the Division Bench of the Bombay High Court negatived the said contention and held that the Court at Mumbai will have jurisdiction. The Division Bench of the Bombay High Court also considered the decision of the Hon'ble Supreme Court in the case of M/s HARMAN ELECTRONIC (P) LTD. & ANR (Supra) (the decision, which is heavily relied upon by the learned advocate appearing on behalf of the respective applicants) and the Division Bench held that the said decision would not be applicable as in the case before the Hon'ble Supreme Court in the case of M/s HARMAN ELECTRONIC (P) LTD. & ANR (Supra), on facts, Hon'ble Supreme Court held that the Chandigarh Court had jurisdiction to entertain the Complaints because the parties were carrying on business at Chandigarh and it has its branch office at Chandigarh. The transactions were carried on only from Chandigarh and the cheque was issued and presented at Chandigarh and, therefore, considering the above, the Division Bench of the Bombay High Court held that the case of M/s HARMAN ELECTRONIC (P) LTD. & ANR (Supra) is therefore, only an authority on the question whether a Court will have jurisdiction because only notice is issued from the place which falls within its jurisdiction and it does not deviate from the other principles laid down by the Hon'ble Supreme Court in the case of K. BHASKARAN (Supra).
12. Considering the aforesaid decision of the Hon'ble Supreme Court in the case ofK. BHASKARAN (Supra) and SHAMSHAD BEGAM (SMT)(Supra) what is emerging is that the offence under Section 138 of the Act has five components; (i) drawing of the cheque (ii) presentation of the cheque to the Bank (iii) returning the cheque unpaid by the drawee bank (iv) giving notice in writing of the to drawer of the cheque demanding payment of the cheque amount and (v) failure of the drawer to make payment within 15 days of the receipt of notice.
13. In the aforesaid decisions and the decision of the Bombay High Court it is specifically held that it is not necessary that the above five acts should have been perpetrated at the same locality. Each of these five acts could have been done at five different localities. Thus, from the aforesaid decisions and the observations made by the Hon'ble Supreme Court in the aforesaid decisions, the locality where the bank which dishonoured the cheque is situated cannot be regarded as a sole criteria to determine the place of the offence. In the aforesaid decision, the Hon'ble Supreme Court has further observed that the offence under Section 138 of the Act would not be completed with the dishonour of the cheque. It attains completion only with failure of the drawer of the cheque to pay the cheque amount within the expiry of 15 days mentioned in Clause (c) of the proviso to Section 138 of the Act and, therefore, considering the aforesaid decisions and the facts of the case on hand when the original complainant has its Head Office at Ahmedabad, the transactions are alleged to have taken place at Ahmedabad, the cheques are reported to be issued at Ahmedabad and the same were deposited by the original complainant with their Banker at Ahmedabad and even the statutory notice under Section 138 of the Act were issued from Ahmedabad and the same were replied by the respective applicants at the address at Ahmedabad, it is very difficult to accept the contention on behalf of the respective applicants that the Court at Ahmedabad would not have territorial jurisdiction.
14. This Court is in complete agreement with the reasoning given by the Division Bench of the Bombay High Court made while considering the decision of the Hon'ble Supreme Court in the case of M/s HARMAN ELECTRONIC (P) LTD. & ANR(Supra). As seen from the decision of the Hon'ble Supreme Court in the case of M/s HARMAN ELECTRONIC (P) LTD. & ANR (Supra), on facts, it was held that the Chandigarh Court had jurisdiction to entertain the Complaint because the parties were carrying on business at Chandigarh and had its Branch Office at Chandigarh and the transaction were carried on only from Chandigarh and the cheque was issued and presented at Chandigarh. Only statutory notice under Section 138 of the Act was issued by the original complainant from New Delhi. Considering the aforesaid, the Hon'ble Supreme Court held that issuance of notice would not by itself give rise to a cause of action and, therefore, solely on the ground that notice was issued from the Head Office of the complainant at New Delhi Court at Delhi would not have territorial jurisdiction.
15. Under the circumstances and for the reasons stated hereinabove, the contention on behalf of the respective applicants that the Court at Ahmedabad would not have any territorial jurisdiction to entertain the Complaints in question cannot be accepted and, therefore, the present applications deserves to be dismissed and are accordingly dismissed. Notice is discharged. Ad-interim relief granted earlier stands vacated forthwith in both of the applications"
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