Andhra HC (Pre-Telangana)
Dynamatic Forgings India Ltd. And Anr. vs Nagarjuna Investment Trusts Ltd. And ... on 1 September, 1992
Equivalent citations: [1994]79COMPCAS583(AP), 1993CRILJ1206
JUDGMENT Iyyapu Panduranga Rao, J.
1. The petition is directed under section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as "the Code"), to call for the records in C.C. No. 367 of 1991 on the file of the Vth Metropolitan Magistrate, Hyderabad, and to quash the same. The facts which are not in dispute are that the first petitioner is a company of which the second petitioner is the director. In lieu of a hire purchase arrangement a cheque was issued by the first petitioner for Rs. 5 lakhs on March 30, 1991, on the Karnataka Bank, Bombay. The same was presented for encashment on April 1, 1991, and the same bounced with an endorsement "funds expected, present again". The same re-presented again in the month of May 19, 1991, and on the second occasion too, it bounced with an endorsement "refer to drawer". As such, having issued the statutory notice, the first respondent filed C.C. No. 367 of 1991 on the file of the Vth Metropolitan Magistrate, Hyderabad, under section 138 of the Negotiable Instruments Act, 1881. Thereupon, the petitioners who are the accused filed the present criminal petition under section 482 of the Code to quash C.C. No. 367 of 1991 pending on the file of the Vth Metropolitan Magistrate, Hyderabad. The fact that the petitioners issued the cheque dated March 30, 1991, for Rs. 5 lakhs on the Karnataka Bank is not in dispute. Similarly, the further fact that the said cheque was presented at Hyderabad for collection on April 1, 1991, on April 8, 1991, the said cheque bounced with an endorsement "funds expected, present again" and for the second time when it was presented in the month of May, 1991, it once again bounced as per the endorsement of the bank "refer to drawer" dated May 16, 1991, is not in dispute. In V. S. Krishnan v. V. S. Narayanan [1990] 1 MWN (Crl) 76; [1991] 71 Comp Cas 536, it is observed that in banking parlance the reason "refer to drawer" when cheques are returned unpaid is used generally for returning the cheques for want of funds from the drawer's account. To the same effect is the decision in Voltas Ltd. v. Hiralal Agarwalla [1991] 71 Comp Cas 273 (Cal).
2. In this case, it is more than evident that on both the occasions, the cheque bounced due to paucity of funds in the account of the first petitioner. The correspondence between the parties and, as a matter of fact, the averments in the criminal petition categorically show that the cheque in question bounced on both the occasions for want of funds. In the telex dated May 13, 1991, referring to the first dishonour, the first petitioner mentioned as follows :
"We could not honour due to financial constraint". The said telex is annexure C in the material papers. Similarly, in the letter dated May 26, 1991, by the petitioners to the whole-time director, it is mentioned as follows :
'We explained to you, due to various financial constraints we were not able to make payments in time due to which arrears have accumulated. We have every intention of clearing up of the arrears.'"
3. It is significant to note that this letter was addressed after the cheque in question bounced for the second time.
4. Coming to the averments in the criminal petition it is observed as follows :
"As the petitioner is in financial difficulties for the last about one year, the first petitioner has been irregular in payment of instalments to the first respondent -
Petitioner No. 1, by their telex message dated May 13, 1991, expressed their financial difficulties and requested respondent No. 1 to bear with petitioner No. 1.
Petitioner No. 1, by itself letter dated July 10, 1991, once again stated the financial crisis through which it was passing and requested the first respondent to wait for some more time for payments."
5. Thus, even in the petition it was clearly admitted that the first petitioner-company was passing through a financial crisis and consequently could not arrange for payment of the amount covered by the cheque in question. Thus, this is not a case where the Andhra Pradesh High Court decision referred to in Union Road Ways (P.) Ltd. v. Shah Ramanlal Ritesh Kumar [1992] 1 An WR 372; [1993] 76 Comp Cas 315, has any application and on the contra the facts in the case clinches in establishing that due to financial difficulties the first petitioner-company admits that it could not arrange for payment of the amount covered by the cheque in question on both the occasions.
6. On behalf of the petitioners it is submitted that the prosecution launched by the first respondent will not be in time as per the provisions of section 138 read with section 142 of the Negotiable Instruments Act, 1881, if a criminal case were to be filed basing on the first dishonour to get over the said difficulty, the cheque was presented for the second time only with a view of see that limitation is saved. This position is covered by a judgment of this court in Richard Samson Sherrat v. State of Andhra Pradesh [1992] 2 APLJ 27; [1993] 78 Comp Cas 28, wherein it was held that the cheque can be 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. Clause (a) of the proviso to section 138 of the Negotiable Instruments Act does not lay down as to the "number of times" a cheque can be presented to the bank, when the statute has not laid down any limitation on the number of times that a cheque may be presented within the period of six months or any shorter period under clause (a) of the proviso to section 138 of the Negotiable Instruments Act, it will not be desirable to read into the said clause any such restriction as to the number of times a cheque may be presented. That was a case where the cheque was presented twice within six months and the same was dishonoured on both the occasions as in the present case. Hence, in Richard Samson Sherrat's case [1992] 2 APLJ 27; [1993] 78 Comp Cas 28, it was held that the presentation of the cheque for the second time within the stipulated period of six months is not bad under law. To the same effect is the decision in K. V. Iyer v. Chitra and Co. [1990] 2 MWN (Crl) 47. Thus, in view of the above two decisions, I hold that the presentation of the cheque for the second time within the stipulated period of six months is not unwarranted and it cannot be said that the second presentation in this case is an excuse to save the limitation.
7. Mr. Venkataramana, learned counsel for the petitioners, submits that the Vth Metropolitan Magistrate, Hyderabad, has no jurisdiction and consequently the complaint petition has to be returned for presentation to the proper court. Elaborating his submission, learned counsel for the petitioners submits that the contract of hire purchase was entered into at Bombay; the payment was proposed to be made at Bombay; the dishonouring of the cheque took place at Bombay; the first petitioner and the first respondent had meetings to discuss the payment of money at Bombay and after the dishonour of the cheque there have been several meetings between the first petitioner and the first respondent at Bombay and consequently the offence, if any, was committed only at Bombay and the courts at places other than Bombay have no jurisdiction to take cognizance of the offence. It is the contention of the first respondent that the cheques were issued to the first respondent at Hyderabad, the cheques were presented for collection at Hyderabad, the first respondent received information regarding bouncing of the cheques only at Hyderabad and consequently the courts at Hyderabad have got jurisdiction. It is further submitted on behalf of the first respondent that by virtue of sections 178 and 179 of the Code of Criminal Procedure, the courts at Hyderabad have got jurisdiction. It is further submitted that the debtor has to find out the creditor and consequently the place where the creditor company is having its office will have jurisdiction to try the case.
8. Section 178 of the Code, so far as it is relevant, and section 179 read thus :
"178. Place of enquiry or trial, - ...
(b) where an offence is committed partly in one local area and partly in another, or .......
(d) where it consist 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.
179. Offence triable where act is done or consequence ensues. - When an act is an offence by reason of anything which has been done and of a consequence which has ensued, the offence may be inquired into or tried by a court within whose local jurisdiction such thing has been done or such consequence has ensued."
9. It is to be seen that the office of the first respondent is located at Nagarjuna Hills, Hyderabad, over which the Vth Metropolitan Magistrate, Hyderabad, has jurisdiction. The cheque was issued in favour of the first respondent-company with its head office at Nagarjuna Hills, Hyderabad, the said cheque was presented at Hyderabad for collection and consequently part of the cause of action arose at Hyderabad by virtue of sections 178 and 179 of the Code of Criminal Procedure and consequently the court at Hyderabad has got jurisdiction to try the offence.
10. In M. M. Malik v. Prem Kumar Goyal [1991] Crl LJ 2594; [1992] 73 Comp Cas 425 (P&H) it is observed that the debtor has to find out the creditor and the court within whose jurisdiction the office of the creditor company is located will have jurisdiction. To the same effect are the decisions in Ess Bee Food Specialities v. Kapoor Brothers [1992] Crl LJ 739; [1993] 78 Comp Cas 570 (P&H) and Shree Bharat Laxmi Wool Store v. Punjab National Bank [1992] ISJ (Banking) 111.
11. Ess Bee Food Specialities v. Kapoor Brothers [1992] Crl LJ 739; [1993] 78 Comp Cas 570 (P&H) is a case where the case was instituted at the place where the cheque was dishonoured and it was held that the court where the cheque was dishonoured has jurisdiction.
12. Shree Bharat Laxmi Wool Store v. Punjab National Bank [1992] ISJ (Banking) 111 is a case where the cheque was presented for collection at Bangalore and the said cheque was dishonoured and it was held that the court at Bangalore had got jurisdiction to try the case.
13. Under these circumstances, finding no merits the criminal petition is dismissed.
14. But this does not bar the petitioners from taking all such pleas available to them under law in the trial court.