Punjab-Haryana High Court
T.K. Khungar vs Sanjay Ghai on 27 August, 1993
Equivalent citations: [1999]98COMPCAS601(P&H), (1994)106PLR384, 1995 A I H C 636, (1993) 3 RECCRIR 612, (1993) 3 ALLCRILR 649, (1993) CRILT 639, (1994) 3 CRIMES 802, (1994) 1 CIVILCOURTC 420, (1994) 1 LANDLR 546, (1994) 1 PUN LR 384, (1993) 4 CURCRIR 2776, (1999) 98 COMCAS 601
JUDGMENT G.S. Chahal, J.
1. This petition under Section 482 of the Code of Criminal Procedure, 1973, has been brought with a prayer for quashing of the complaint annexure P1 and the summoning order annexure P2 vide which the present petitioner is being tried for offence under Section 138 of the Negotiable Instruments Act, 1881, in the court of the Judicial Magistrate First Class, Khanna.
2. As per the averments made in the complaint annexure P1, the complainant firm is engaged in the business of rice seller and after processing paddy rice is produced. Shri T.K. Khunger is the proprietor of the firm styled as M/s. T.K. Traders, wholesale merchant and commission agents, Aurangabad. The complainant sent 135 qtls. of rice of quality PR 106 in 270 containers for sale under the agency of the petitioner and issued CST-F Forms on February 18, 1991. Copies of bills, goods receipts and khata were also attached with the complaint with the prayer that they may be read as part of the complaint. The goods were valued at Rs. 55,350 and the petitioner paid Rs. 15,000 towards that price through bank draft dated February 4, 1991. To discharge his remaining liability the petitioner issued two cheques bearing No. AN/2 185660, dated February 26, 1991, drawn on the State Bank of Indore amounting to Rs. 20,548.75 and No. 185661, dated March 4, 1991, drawn on the State Bank of Indore, Aurangabad, amounting to Rs. 20,000. Both the cheques were presented by the complainant to the State Bank of Patiala at Khanna, but the same were not encashed for want of funds. On receipt of the information from the bank, the complainant issued a notice to the petitioner under registered post as well as under certificate of posting within the statutory period of fifteen days. The petitioner has, however, failed to pay the amount and hence the complaint.
3. The petitioner challenged the consideration of the cheques on the basis that he was only the agent and was to receive his commission on the sale of the goods. The factum of supply of goods was admitted but it was stated that the same were, sent for the purposes of agency. The payment of Rs. 15,000 through hank draft, was stated to be price of the goods sold. That post-dated cheques were issued when the employee of the complainant visited Aurangabad but there was clear understanding that these cheques were not to be presented unless and until the goods have been sold and the same had been issued by way of rough estimate in respect of the value of the goods. That the petitioner has tried to take undue advantage of the cheques received.
4. At the time of the arguments, the learned counsel for the petitioner urged that there was no liability of the petitioner which was required to be discharged by issuing of cheques and as such the cheques could not be enforced against the petitioners ; secondly, the complaint had been filed after the expiry of period of limitation and thirdly the courts at Khanna had no jurisdiction to try the offence.
5. It is an admitted fact that the goods in the form of rice had been supplied by the complainant to the petitioner. At this stage enough evidence is not on the record to hold that in fact the petitioner had no liability which remained to be discharged by issue of cheques. If the petitioner has any such defence he is to establish it at the stage of the trial. The specific plea of the complainant is that the petitioner did owe money with respect to the sale price of the rice supplied. I may also add here that it has been laid down by their Lordships of the Supreme Court in State of Haryana v. Bhajan Lal (1992] SCC (Crl.) 424, that the High Court is not justified in proceedings under Section 482 of the Criminal Procedure Code in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the first information report or the complaint. Thus it is not necessary here to record a definite finding about the petitioner being under a liability for which the cheques were issued.
6. The petitioner has not been able to state as to the date on which the notices were received by him. The petitioner is in possession of the best evidence to prove the date of receipt of notice, but those documents have been kept back. The trial court shall obviously examine the material that may be brought forth by the parties to arrive at a conclusion if the complaint has been filed within limitation. At this stage there is no material to hold that in fact the complaint had been filed after the expiry of the period of limitation.
7. Learned counsel states that since the cheques had been handed over to the complainant at Aurangabad, as stated by him, in para. 4 of the petition, and the cheques were drawn on a bank at Aurangabad, only the courts at Aurangabad had jurisdiction to try the matter. It may, however, be stated that on the mere averment made by the petitioner it cannot be accepted that the cheques were in fact handed over at Aurangabad. Even if it may be accepted it will not bar the jurisdiction of the courts at Khanna to try the matter. The two provisions of law, which need discussion may be stated :
"138. Dishonour of cheque for insufficiency, etc., of funds in the account.Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank-unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque or with both :
Provided that nothing contained in this section shall apply unless-
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier ;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid ; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.--For the purposes of this section, 'debt or other liability' means a legally enforceable debt or other liability. . . .
142. Cognizance of offences.--Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),--
(a) no court shall take cognizance of any offence punishable under Section 138 except upon a complaint, in writing made by the payee or, as the case may be, the holder in due course of the cheque ;
(b) such complaint is made within one month of the date on which the cause of action arises under Clause (c) of the proviso to Section 138 ;
(c) no court inferior to that of a Metropolitan Magistrate or a judicial Magistrate of the First Class, shall try any offence punishable under Section 138."
8. A bare reading of the Section 138 indicates that to make out an offence under this provision the following conditions must be satisfied :
(i) Cheque must have been issued to discharge a liability ;
(ii) Cheque must have been dishonoured for insufficiency of funds ;
(iii) Notice must be given by the payee to the drawer of the cheque giving intimation of the dishonour of the cheque and making of a demand of the amount ; and
(iv) The drawer's failure to pay the amount of cheque within fifteen days of service of the notice.
9. So long as the period of notice does not expire there can be no cause of action with the payee to make the drawer liable criminally. The issuing of a cheque, its dishonour, receipt of its due intimation do not make out an offence. The drawer can stall criminal prosecution by paying the amount of the cheque. It is only failure to make the payment that gives a cause. Section 142(b) also speaks of cause of action arising under Clause (c) of the proviso to Section 138. Other facts are only a bundle of material facts which have also to be proved for establishing the charge. I draw support for my view from the observations of a Division Bench of the Kerala High Court in Prithviraj v. Mathew Koshi [1991] 71 Comp Cas 131; [1991] 1 KLT 95. Normally the payment by cheque amounts to repayment of the loan. However, the debt will stand discharged only if the cheque is honoured and the payment is made. In case of dishonour of the cheque the debt not being discharged, the payee continues to hold the status of a creditor. It is the rule of common law that a debtor must seek his creditor. Unless the place for making payment is specified a debtor must make the payment at the normal place of business of the creditor. Since the respondent has his normal place of business at Khanna, it was for the petitioner to discharge the debt by making payment at Khanna and the cause of action arose to the complainant respondent at Khanna.
10. There is another provision in the Code of Criminal Procedure, 1973, which is to be considered for deciding the controversy. Section 178 of the Criminal Procedure Code reads as under :
"178. Place of inquiry or trial.--(a) When it is uncertain in which of several local areas an offence was committed, or
(b) where an offence is committed partly in one local area and partly in another, or
(c) where an offence is continuing one, and continues to be committed in more local areas than one, or
(d) where it consists of several acts done in different local areas, it may be inquired into or tried by a court having jurisdiction over any of such local areas."
11. The offence under Section 138 of the Negotiable Instruments Act consists of several acts done in different local areas. The cheque was issued at Aurangabad, presented by the complainant-respondent at Khanna, the intimation of dishonour received at Khanna, notice served upon the petitioners to make the payment at Khanna. In this situation either of the courts at Aurangabad or Khanna had the jurisdiction to try the offence in view of the provisions of Clause (d) of the above quoted section. It was for the complainant-respondent to select the forum and the Khanna courts thus had the jurisdiction to try the petitioner for the offence complained of.
12. Learned counsel has relied upon certain observations in P.K. Muralee-dharan v. C.K. Pareed [1992] RCC 673, 677 ; [1993] 76 Comp Cas 615 (Ker).
13. In the above case it has been held that the court within the jurisdiction of which the cheque was handed over to the payee has also the jurisdiction to try the matter under Section 138 of the Negotiable Instruments Act. The learned judge had also observed that the venue of the enquiry or trial is primarily to be determined by the averments contained in the complaint. The learned judge also made the following observations (at page 622) :
"From the discussions in the foregoing paragraphs the position that emerges is that the venue of enquiry or trial has primarily to be determined by the averments contained in the complaint. If on the basis of such averments the court has jurisdiction, it has to proceed with the complaint. The place where the creditor resides or the place where the debtor resides cannot be said to be the place of payment unless there is any indication to that effect either expressly or impliedly. The cause of action as contemplated in Section 142 of the Act arises at the place where the drawer of the cheque fails to make payment of the money. That can be the place where the bank to which the cheque was issued is located. It can also be the place where the cheque was issued or delivered. The court within whose jurisdiction any of the above mentioned places falls has therefore got jurisdiction to try the offence under Section 138 of the Act."
14. There was no occasion for the learned judge to decide as to which court will have jurisdiction if the cheque is handed over at a place different from the normal place of business of the payee. If the learned judge meant to hold that after dishonour of the cheque the place where the creditor has his normal place of business, no cause of action arises, I am unable to endorse it. I am thus unable to agree with the learned counsel for the petitioner that the courts at Khanna where the normal place of business of the payee is located will not be the place where the cause of action arose. Once the cheque is dishonoured and the payee serves the notice he is entitled to enforce his rights under Section 138 of the Negotiable Instruments Act at the place of his business. I thus conclude that the courts at Khanna have the jurisdiction to try the criminal charge against the petitioner.
15. No case is thus made out for quashing of the complaint and consequent proceedings. This petition is, hereby, dismissed.