M.Y. Eqbal, J.
1. In this application filed under Section 482 of the Code of Criminal Procedure, the petitioner prayed for quashing' the entire criminal prosecution including the order on November 4, 1992, taking cognizance of the offence under Section 138 of the Negotiable Instruments Act, 1881, and under Section 420 of the Indian Penal Code in Complaint Case No. 654 of 1992.
2. The facts of the case, in brief, are that opposite party No. 2 filed a complaint in the Court of the Chief Judicial Magistrate, Bhagalpur, alleging therein that the complainant is a businessman and carrying on his business at Nathnagar, Bhagalpur, New Delhi and Gauhati (Assam) and is a permanent resident of Nathnagar, Bhagalpur and also owned a residential house at Greater Kailash, New Delhi. It is alleged that the petitioner is a resident of Ranchi and carrying on his business at Ranchi, New Delhi and other places and is also a director of STI Marketing (P.) Ltd., New Delhi. It
is further alleged that the petitioner being a director of the company had issued a cheque drawn on Central Bank of India, Khan Market branch, New Delhi, bearing cheque No. 164875 dated July 25, 1992, for an amount of Rs. 3,25,000 in settlement of outstanding dues of the complainant. It is further alleged that the complainant-opposite party No. 2 deposited the said cheque in the account of the petitioner in State Bank of India, Nehru Place branch, New Delhi, for collection of its payment from the Central Bank of India, Khan Market branch, Delhi. The cheque was dishonoured and referred back to the drawer with the endorsement that no arrangement for payment of the said cheque had been made. It is alleged that the complainant informed the accused person about the dishonour of the said cheque and have requested to pay the aforesaid sum and also sent legal notice but the accused person neither replied to the notice nor paid the aforesaid amount of Rs. 3,25,000. It is further alleged that the complainant-opposite party No. 2 on the assurance of the accused person again presented the cheque to the Central Bank of India, Nathnagar branch, Bhagalpur, but the said cheque was again returned to the complainant on September 25, 1992. The complainant, thereafter, instituted a complaint in the court of the Chief Judicial Magistrate, Bhagalpur, who took cognizance of the offence and issued process against the petitioner.
3. Mr. Pawan Kumar, learned senior counsel appearing on behalf of the petitioner assailed the continuance of the prosecution and order of taking cognizance, as being illegal and wholly without jurisdiction. Learned counsel made twofold submissions. Firstly, it was submitted that the court of Bhagalpur has no jurisdiction inasmuch as no cause of action arose within the jurisdiction of the Bhagalpur court. According to learned counsel, the cause of action as contemplated under Section 142 of the Negotiable Instruments Act, hereinafter referred to as 'the Act' arises at the place where the cheque was issued or at the place where the cheque was delivered to pay or even at the place where the cheque was deposited for collection. Learned counsel further submitted that as a matter of fact the cheque was deposited by the complainant in the State Bank of India, Nehru Place branch, New Delhi and when it was dishonoured a legal notice through an advocate of New Delhi was served on the petitioner on August 17, 1992, at New Delhi. Thereafter, no complaint was lodged by the complainant within 30 days from the date of service of notice at New Delhi. Learned counsel further submitted that after the complaint became barred by limitation the complainant at his own instance deposited the cheque in Bhagalpur where he resides for the purpose of making cause of action for lodging of the complaint. In support of his contention learned counsel relied upon the decision of the case of P.K. Muraleedharan v. C.K. Pareed [1993] 76 Comp Cas 615 (Ker). Learned counsel then submitted that there is no allegation in the complaint in terms of Section 141 of the Act that the petitioner is in
charge of and was responsible to the company for the conduct of the business. There is also no averment in the complaint that the petitioner had any liability for payment of any amount. In the absence of these averments no case under Section 138 of the Act is made out and, therefore, the prosecution of the petitioner is liable to be quashed.
4. On the other hand, Mr. S.N. Singh, learned counsel appearing for the complainant-opposite party No. 2, submitted that it has been specifically alleged in the complaint that when the cheque was dishonoured from the bank at New Delhi, the accused persons assured the complainant that the cheque will be encashed and directed him to deposit the said cheque in his bank account. Accordingly, the complainant came to Bhagalpur where he permanently resides and deposited the cheque which was sent for collection to New Delhi. Again, the cheque was dishonoured. According to learned counsel, the court at Bhagalpur has jurisdiction and the complaint has been rightly filed in the court of the Chief Judicial Magistrate, Bhagalpur. Learned counsel then submitted that when a cheque is dishonoured, the offence is complete and the plea of no liability to discharge the dues cannot be entertained. Learned counsel relied upon the decision of the case of Electronics Trade and Technology Development Corporation Ltd. v. Indian Technologists and Engineers (Electronics) Pvt. Ltd. [1996] 86 Comp Cas 30 (SC) ; AIR 1996 SC 2339.
5. After having heard learned counsel for the parties, two points emerge for consideration by this court :
(i) Whether the court at Bhagalpur had jurisdiction to entertain the complaint and to initiate prosecution against the petitioner ?
(ii) Whether it is necessary for the complainant to prima facie satisfy the court that the cheque was issued by the accused persons for the discharge of any debt or other liability before any action is taken against the accused persons
6. Before answering these points arising in this case it would be useful to look into the relevant provisions of the said Act. Chapter XVII consisting of Sections 138 to 142 was introduced by Section 4 of the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988. By virtue of this amendment, dishonour of cheques for insufficiency of the funds in the account has been made an offence. Section 138 provides that where any cheque issued by a person for the discharge of debt or other liability is returned by the bank unpaid because of insufficiency of funds then the person who issued the cheque shall be deemed to have committed an offence. However, the proviso to Section 138 says that for the purpose of constituting an offence and holding the person liable for prosecution, the cheque has to be presented to the bank within a period of six months from the date on which it was drawn or within the period of its validity, whichever is earlier. 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, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid ; and the drawer of such cheque fails to make the payment of the said amount of money to the payee, as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice, then the complainant must lodge the complaint within one month thereafter. Section 139 provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability. Section 141 makes provision for said offences by companies. Section 142 lays down the procedure for taking cognizance of the offence. Section 142 reads as under :
'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.'
7. Now, I shall take up the first point regarding jurisdiction of the court at Bhagalpur for entertaining a complaint filed by the complainant-opposite party No. 2. From a bare reading of the whole provisions of Chapter XVII of the said Act, it is manifest that the cause of action arises only after the payee fails to pay the amount within 15 days of the receipt of notice by which demand for payment of the said money was made by the payee after dishonour of the cheque. It is also clear that issuance of a cheque and dishonour of the cheque does not itself give rise to cause of action because if on the dishonour of the cheque and on issuance of notice by the payee, the cheque amount is paid then there will be no offence. The next question arises as to which court shall have jurisdiction over the matter initiated under the aforesaid provisions of the said Act. Normally, the jurisdiction lies either in the place where the maker executed pronote or the place where they reside, but in a case of this nature, normally the jurisdiction will lie in the place where the cheque was issued or the place where the drawer of the cheque fails to make payment of money or the place where the bank to which the cheque was issued is located. However, in order to ascertain the place where the cause of action arises, one has to look into the allegations made in the complaint. It is well-settled that the jurisdiction of the court to hear a case depends on the allegations made in the complaint, but if the allegations are exaggerated with the intention of seeking remedy in a particular court, then such allegation cannot be accepted for the purpose of jurisdiction.
8. Let us now examine the allegations made in the complaint filed by opposite party No. 2, It has been categorically stated that both the complainant and opposite party No. 2 carry on business besides other places at New Delhi. The petitioner is alleged to have issued the cheque of Central Bank of India, Khan Market branch, New Delhi, in favour of the complainant. The complainant deposited the said cheque in the State Bank of India, Nehru Place branch, New Delhi. It is, therefore, clear that the bank wherefrom the cheque was drawn and the bank where the cheque was deposited for collection are situated in New Delhi. It is alleged that the cheque was dishonoured and returned to the complainant on August 11, 1992, and on August 17, 1992 the complainant sent a legal notice from New Delhi through his advocate practising' in New Delhi demanding the amount of cheque and it is said that the petitioner did not give any reply to the said notice. Admittedly, the complainant did not bring any action or file a complaint within the period stipulated under Sections 138 and 142 of the said Act. However, the complainant then makes out a case that the petitioner assured and requested the complainant to deposit the said cheque again in his bank account after a week for its payment and on such assurance the complainant came to his residential house in Bhagalpur and deposited the cheque in the Central Bank of India, Nathnagar Branch, Bhagalpur. It would rather be appropriate to reproduce the allegations made in paragraphs 8, 9 and 10 of the complaint which reads as under :
'That the complainant again made contact with the accused persons and requested to pay the aforesaid amount, but the accused person did not pay the said amount in cash to the complainant. Accused No. 1, Binod Sarawgi assured and requested the complainant to deposit the said cheque again in his bank account after a week for its payments.
That the complainant came to his residential-cum-business place of Nathnagar, Bhagalpur, from Delhi with the said cheque.
That as per the assurance given by accused No. 1, the complainant again deposited the above cheque in his bank account of the Central Bank of India, Nathnagar branch, Bhagalpur, for the collection of its payment from the Central Bank of India, Khan Market branch, Delhi. The said cheque was again presented to the Central Bank of India, Khan Market branch, Delhi, but the same was again dishonoured by the accused person knowingly and intentionally with ulterior motive and the said cheque was subsequently returned to the complainant on September 25, 1992, by his banker, Central Bank of India, Nathnagar branch with the cheque return memo mentioning the reasons 'fund insufficient'.'
9. From a bare perusal of the aforesaid paragraphs of the complaint it appears that although the petitioner did not reply to the legal notice sent through the advocate, but verbally the complainant was requested to deposit the cheque. From para. 8 of the complaint it does not appear that such assurance was given in writing or the petitioner asked the complainant to go to Bhagalpur and deposit the cheque in the bank at Bhagalpur for collection. Rather it appears that the complainant at his own instance came to Bhagalpur from New Delhi and again deposited the cheque at Bhagalpur. From the facts stated in these paragraphs it is clear that these facts are nothing but exaggerated facts which have been alleged in the complaint in order to give rise to a fresh cause of action within the jurisdiction of the court at Bhagalpur. In my opinion, such exaggerated allegations for the purpose of creating fresh cause of action does not give jurisdiction to a court to take cognizance of the offence under Section 142 of the Act. As noticed above, the admitted facts are that the cheque drawn on Central Bank of India, Khan Market branch, was issued and the said cheque was deposited in the State Bank of India, Nehru Place branch, New Delhi. After dishonour of the cheque, a demand notice was sent from New Delhi. It is also not disputed that both the complainant and the petitioner reside and carry on business in New Delhi. There is no allegation that the cheque was issued for the discharge of liability which accrued in a place other than New Delhi. In that view of the matter, in my opinion, the offence was complete in New Delhi and the cause of action also arises in New Delhi and, therefore, it is the court in New Delhi which has jurisdiction to take cognizance of the offence. I am of the view that the cause of action as contemplated under Section 142 of the said Act arises at a place where the cheque was issued and the drawer of the cheque fails to make payment of the money. It also arises at a place where the bank to which the cheque was issued is located or a place where the cheque was issued or delivered. Had it been a case where the cheque was issued from New Delhi, but it was delivered at Bhagalpur, and the cheque was deposited at Bhagalpur for collection then the Bhagalpur court would have jurisdiction. A similar question was considered by a Bench of the Kerala High Court in the case of P.K. Muraleedharan v. C.K. Pareed [1993] 76 Comp Cas 615. His Lordship after discussing various authorities observed as under (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.'
10. In the facts and circumstances of the case and the law discussed hereinabove, I am of the opinion that the court below has no jurisdiction to take cognizance of the offence.
11. Since the answer to point No. 1 has been given in the negative, there is no need to express my view on point No. 2. Suffice it to say that Section 139 of the Act gives presumption in favour of the holder of the cheque. It says that unless the contrary is proved, it shall be presumed that the holder of the cheque received the cheque for discharge, in whole or in part of any debt or other liability. It is, therefore, clear that for the purpose of taking cognizance the court shall presume issuance of cheque for the discharge of any debt or other liability.
12. Having regard to the facts and law discussed above, this application is allowed and the entire prosecution and the impugned order passed by the learned court below are quashed.