Holding

A criminal court can try a Section 138 offence only where the offence is committed, i.e., where the notice is received and the default occurs; therefore the Delhi court lacked jurisdiction and the case must be tried in Chandigarh.

Summary

The appeal concerned the territorial jurisdiction of a criminal court to try an offence under Section 138 of the Negotiable Instruments Act, 1881. The complainant, National Panasonic India Ltd., filed a complaint in Delhi alleging that a cheque drawn and presented in Chandigarh was dishonoured and that a notice was served from Delhi. The Supreme Court held that jurisdiction is governed by Section 177 of the Criminal Procedure Code and depends on the place where the offence is completed, i.e., where the notice is received and the payment default occurs. Since the cheque was drawn, presented, dishonoured and the notice was served in Chandigarh, the cause of action arose there, making the Delhi court without jurisdiction. Consequently, the Court ordered the transfer of the complaint to the competent court in Chandigarh and allowed the appeal.

Issues considered

The appropriate territorial jurisdiction for offences under Section 138 of the Negotiable Instruments Act.
Whether the filing of a complaint in Delhi is maintainable when the cause of action arose in Chandigarh.
The legal effect of the 'debtor must seek the creditor' principle in criminal proceedings.
The interpretation of 'communication' of notice under the Act and its impact on jurisdiction.

Legislation cited

Code of Criminal Procedure, 1973s. 177, s. 178, s. 179
General Clauses Acts. 27
Negotiable Instruments Act, 1881s. 138

Subjects

Section 138Negotiable Instruments ActTerritorial jurisdictionCriminal Procedure CodeCause of actionNotice serviceDebtor‑creditor principleCase transfer

Judgment

[2008) 17 S.C.R. 487
.,
MlS. HARMAN ELECTRONICS (P) LTD. & ANR. A
v.
\ M/S. NATIONAL PANASONIC INDIA LTD.
(Crimi_nal Appeal No.2021 of 2008)

DECEMBER 12, 2008
B
[S.B. SINHA AND CYRIAC JOSEPH, JJ.]

--........... Code of Criminal Procedure, 1973 - s.177 - Territorial
jurisdiction of criminal court - To try case u/s. 138 of
Negotiable Instruments Act - Held: In order to determine c
territorial jurisdiction of criminal Court place of commission
of offence is material - Court derives jurisdiction when the
cause of action arises - In a case u/s. 138 of the Act, cause
of action for filing complaint arises only after completion of
the offence, i.e., after service of notice by the holder of the
instrument and failure to pay on the part of accused within 15 D
days thereafter - Complaint can be filed at the place where
cause of action arose - On facts, complaint filed at Delhi not
. ~

maintainable - Direction to transfer the complaint to
__ competent court at Chandigarh - Negotiable Instruments Act,
1881 - s. 138. E
Doctrines/Principles:
Principle that 'debtor must seek the creditor' -
Applicability of - In criminal case - Held: Not applicable.
Jurisdiction:
Jurisdiction of criminal Court - Determination of - Basis F
t for - Held: Jurisdiction of Criminal Court is governed by the
• provisions of Cr.P.C. and not on common law principle .
Words and Phrases:
'Communication' - Meaning of.
G

-
The question for consideration in the instant appeal
. was as to what is the jurisdiction of a Court to try an
offence u/s.138 of Negotiable Instruments Act, 1881.

.. • Allowing the appeal, the Court
487 H
488 SUPREME COURT REPORTS [2008] 17 S.C.R.

A HELD: 1.1. Section 177 Cr.P.C. determines the
jurisdiction of a court trying the matter. The court
1

ordinarily will have the jurisdiction only where the offence
has been committed. Therefore, the place where an
offence has been committed plays an important role.
8 [Paras 19 and 20] [501-D-E] 1

1.2. A Court derives a jurisdiction only when the
cause of action arises within its jurisdiction. The same
cannot be conferred by any act of omission or
commission on the part of the! accused. A distinction
C must also be borne in mind between the ingredient of an
offence and commission of a part of the offence. [Para
24] [503-D]
2.1. The offence under Sectibn 138 of the Negotiable
Instruments Act, 1881 can be completed only with the
concatenation of a number of acts, namely, (1) Drawing
D of the cheque, (2) Presentation of the cheque to the bank, _
(3) Returning the cheque unpaid by the drawee bank, (4)
I

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
E of the notice. If five different ;icts 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 u/s. 138 of the Act and the
complainant would be at liberty t<l> file a complaint petition
F at any of those places. [Para 9] [495-F-H; 496-A]
2.2. It is one thing to say that sending of a notice is
one of the ingredients for maintaining the complaint but
it is another thing to say that di~honour of a cheque by
itself constitutes an offence. For the purpose of proving
G its case that the accused had committed an offence u/s.
138 of the Act, the ingredients thereof are required to be
proved. What would constitute an offence is stated in the
main provision. The proviso apPiended thereto, however, _
imposes certain further conditions which are required to
be fulfilled before cognizance of the offence can be
H
e M/S. HARMAN ELECTRONICS (P) LTD. & ANR. v. MIS. 489
NATIONAL PANASONIC INDIA LTD.

taken. If the ingredients for constitution of the offence laid A
down in the provisos (a), (b) and (c) appended to Section
_.._,.
138, intended to be applied in favour of the accused, there
cannot be any doubt that receipt of a notice would
ultimately give rise to the cause of action for filing a
complaint. As it is only on receipt of the notice the 8
accused at his own peril may refuse to pay the amount.
Clauses (b) and (c) of the proviso to Section 138

~
therefore, must be read together. Issuance of notice
would not by itself give rise to a cause of action but
communication of the notice would. [Para 14] [499-C-F]
2.3. While issuance of a notice by the holder of a
c
negotiable instrument is necessary, service thereof is also
imperative. Only on a service of such notice. and failure
on the part of the accused to pay the demanded amount
within a period of 15 days thereafter, commission of an
offence completes. Giving of notice, therefore, cannot 'D
have any precedent over the service. [Para 24] [503-0-E]
-l( 2.4. For constitution of an offence u/s. 138 of the Act,
)'
the notice must be received by the accused. It may be
deemed to have been received in certain situations. The
word 'communicate' inter alia means 'to 'ma·ke known, E
inform, convey, etc.' It is one thing to say that a
presumption is raised that notice is served but it is
another thing to say that service of notice may not be held
to be of any significance or may, be held to be wholly
unnecessary. [Paras 17 and 20] [500-H; 501-A-E] F
\

t
2'.5. Presumption raised in support of service of
... notice would depend upon the facts and circumstances
of each case. Its application is on the question of law or
the fact obtaining. Presumption has to be raised not on
the hypothesis or surmises but if the foundational facts G
are laid down therefor. Only because presumption of
service· of notice is possible to be raised at the trial, the
same by itself may not be a ground to hold that the
distinction ~etween giving of notice and se..Vice of notice
ceases to exist. [Para 23] [503-A-B]
H
~:

490 SUPREME COURT REPORTS
'
[2008] 17 S.C.R. e
A 2.6. In the instant case, the parties had been carrying ,
on business at Chandigarh. The Head Office of the
complainant-respondent may be at Delhi but it has a +-- ~

branch office at Chandigarh. It is not in dispute that the
transactions were carried on only from Chandigarh. It is
B furthermore not in dispute that the cheque was issued
and presented at Chandigarh. [Para 12] [498-B]
2.7. The complaint petition does not show that the
cheque was presented at Delhi. The facility for collection
-,.---..--
ofJhe cheque admittedly was available at Chandigarh and
c the said facility was availed of. The certificate issued by
the Bank, which was not produced before the court
taking cognizance, even if taken into consideration, does
not show that the cheque was presented at the Delhi
Branch of the Bank. Therefore, it /is presumed that the
cheque was. presented at Chandigarh. Indisputably, the
D dishonour of the cheque also took place at Chandigarh.
• I

[Para 13] [498-G-H; 499•A]
State of Punjab vs. Amar Singh] Harika AIR (1966) SC )!..
.,
1313, followed.
K. Bhaskaran v. Sankaran Vaidhyan Ba/an and Anr.
E (1999) 7 SCC 510; Mis. Dalmia Cement (Bharat) ltd. vs. Ml
s Galaxy Traders and Agencies Ltd. f!nd Ors. AIR (2001) SC
676; State of Punjab vs. Khemi Ram (1969) 3 SCC 28;
Sultan Sadik vs. Sanjay Raj Subba and Ors (2004) 2 SCC
1

377; Mosaraf Hossain Khan vs. Bh agheeratha Engg. Ltd.
F (2006) 3 sec 658; Y.A. Ajit. v. Sofaha Ajit AIR (2007) SC
3151, relied on. .
1

--t
3.1. A banking institution holding several cheques 'fl

signed by the·same borrower ca~not only present the
cheque for its encashment at four different places· but also
G may serve notices from four diff~rent places so as to
enable it to file four complaint cases at four different
places. This only causes grav~ harassment to the
accused. It is, therefore, necessary iin a case of this nature
to strike a balance between the right of the complainant •
and the right of an accused vis-a-vis the provisions of
H
MIS. HARMAN ELECTRONICS (P) LTD. & ANR. v. MIS. 491 •
NATIONAL PANASONIC INDIA LTD.

Cr.P.C. [Para 25] (503-F-H] A
· 3.2. The principle that the debtor must seek the
I
"-i
creditor cannot be applied in a criminal case. Jurisdiction
of the Court to try a criminal case is governed by the
provisions of Cr.P.C. and not on common law principle.
(Paras 26 and 27] (504-A-B] B
4. It is directed that the complaint case pending in the.
=='- court at New Delhi, be transferred to the competent Court:
at Chandigarh. (Para 28] [504-D]
~
Case Law Reference:
(1999) 1 sec 510 relied on. Para 9 c
.. AIR 2001 SC 676
AIR (1966) SC 1313
(1969) 3 sec 28
relied on
followed
relied on
Para 11
Para 16
Para 17
(2004) 2 sec 377 relied on Para 18
(2006) 3 sec 658 relied on Para 21 D-.
(2007) SC 3151 relied on Para 22
~ CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
P'
No. 2021 of 2008.
From the final Judgment and Order dated 13.2.2004 of the
High Court of Delhi at New Delhi in Crl. M.C. No. 1023 of 2003. E
Ashok Grover, Mehul Sharma (for Madhu Moolchandani)
for the Appellants.
Sakesh Kumar, M.A. Khan and Ramenswar Prasad Goyal
for the Respondent.
The Judgment of the Court was delivered by F
..' >·
S.B. SINHA, J. 1. Leave granted.
't
2. Territorial jurisdiction of a court to try an offence under
Section 138 of the Negotiable Instruments Act, 1881 (for short,
"the Act") is in question in this appeal.
The said question arose in the following circumstances•. G
Appellants and respondent entered into a business ,
transaction. Appellant is a resident of Chandigarh. He carries
• on business in Chandigarh. The cheque in question admittedly
was issued at Chandigarh. Complainant also has a branch
office at Chandigarh although his Head Office is said to be at H
• 492 SUPREME COURT REPORTS [2008] 17 S.C.R.
e
A Delhi. It is stated that the cheque was presented at Chandigarh.
f-:iowever, it is in dispute as to whether the said cheque was
'sent for collection to Delhi. The cheque was dishonoured also
at Chandigarh. However, the complainant - respondent issued
a notice upon the appellant asking him to pay the amount from
B New Delhi. Admittedly, the said notice was served upon the
appellant at Chandigarh. On failure on the part of the appellant
to pay the amount within a period of 15 days from the date o_f
communication of the said letter, a complaint petition was filed
~
at Delhi. In the complaint petition, it was stated:
"10. That the complainant presen~ed aforesaid cheque for
c encashment through its banker Oiti Bank NA. The Punjab
& Sind Bank, the banker of the accused returned the said
cheque unpaid with an endorsement "Payment stopped by
drawer" vide their memo dated 3d.12.2000. The aforesaid
memo dated 30.122000 was rec~ived by the complainant
D on 3.1.2001. 1

11. Upon dishonour of the above mentioned cheque, the
1

complainant sent notice dt. 11.1.2001 in terms of section ~
>(
138 of Negotiable Instruments Act to the accused persons
demanding payment of aforesaid cheque amount at Delhi.
E The accused persons were served with said notice by
registered AID.
12. By the said notice the accused persons were called
upon to pay to the complainant the sum of Rs.5,00,000/-
within 15 days of the receipt of said notice.
F 13. Despite the service of notice dt. 11.1.2001 the accused
persons have failed and/or neglected to pay amount of ....
I

aforesaid cheque within the stipulated period of 15 days -.,.
after the service of the notice.
14. Accused persons clandestinely/deliberately and with
G malafide intention and by failing to make the payment of
the said dishonoured cheque within the stipulated period
have committed the offence under Section 138 read with
' · Section 141 6f the Negotiable Instruments Act, 1881. ¥
15. The complainant further submit that the ,complaint is
H being filed within 1 month from !he date of expiring of the
M/S. HARMAN ELECTRONICS (P) LTD. & ANR. v. M/S. 493
NATIONAL PANASONIC INDIA LTD. [S.B. SINHA, J.]

15 days grace time given under the notice for payment of A
said amount.
16. This Hon'ble Court has jurisdiction to entertain the
present complaint as complainant carries on its business
at Delhi. The demand notice dt. 11.1.2001 was issued
from Delhi and the amount of cheque was payable at Delhi B
and because accused failed to make the payment of
amount of said cheque within statutory period of 15 days
. .,._
---- .
I
from receipt of notice."
3. Cognizance of the offence was taken against the
appellant by the learned judge. c
Questioning the jurisdiction of the court of Additional
Sessions Judge, New Delhi, an application was filed which was
disposed of by the learned Additional Sessions Judge, New
Delhi in terms of an order dated 3.2.2003 stating:
"2. The main grievance of the accused is that the accused D
persons, as well as the complainant are carrying their
business at Chandigarh. The cheque in question was given
by the accused to the complainant in Chandigarh, and it
was present to their banker at Chandigarh. Only notice
was given by the complainant to the accused persons, from
Delhi. That the same was served on the accused 'E
admittedly, at Chandigarh and that both the parties are
carrying out their business also at Chandigarh. Therefore,
it is contended that it would amount to absurdity if the
complaint of the complainant is entertained, in Delhi, in
view of the case law reported in AIR 1999 Supreme Court F
3782, K. Bhaskaran Vs. Sankaran Vaidyyan Ba/an and
....
Another.-
6. I have considered the arguments advanced at the
bar,.and I am of the considered opinion that this court has
jurisdiction to entertain this complaint, as admittedly the G
notice was sent by the complainant to the accused
persons from Delhi, and the complainant is having its
registered office at Delhi, and that they are carrying out the
business at Delhi. Admittedly, it is also evident from the
record that accused allegedly failed to make the payment H
!"""

494 SUPREME COURT REPORTS [2008] 17 S.C.R.

t
A at Delhi, as the demand was made from Delhi and the
payment was to be made to the!complainant at Delhi."
4. By reason of the impugned judgmen't, Criminal
Miscellaneous Petition filed by the appellant has been
dismissed. I
B 5. Mr. Ashok Grover, learned Senior Counsel appearing
on behalf of the appellant would submit that as the entire cause
.of action arose within the jurisdictioh of the courts at
Chandigarh, the learned Additional Sessions
I
Judge, New Delhi
had no jurisdiction to take cognizance of the offence.
c 6. Mr. Sakesh Kumar, learned counsel appearing on behalf
of the respondent, on the other hand 1 would contend:
i. The cheque although was! deposited at Chandigarh,
the same having been sent by Citi Bank NA for
collection at Delhi, the amount became payable at
D Delhi. . I
ii. Giving of a notice being ~ condition precedent for
filing a complaint petition under Section 138 of the
Negotiable lnstrur:n,e,ms Act, a n.otice having been
issued from Delhi, the Uethi Court had the reqJ.Jisite
jurisdiction, particularly '1hen demand was made ,
E
upon the appellant to pay the complain~nt at Delhi.
7. Section 138 of the Negotiable Instruments Act reads as
unde~ . [
"138. Dishonour of cheque for insufficiency, etc., of funds
in the account. - Where any cheque drawn by a person
F
on an account maintained byI 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 t~e bank unpaid,
either because ,of the amount pf money standing to the
G credit of that account is insufficient to honour the cheque
or that it exceeds the amount ar~anged to be paid from that
account by an agreement made with that bank, such person
shall be deemed to have comm itted an offence and shall,
1

without prejudice to any other provisions of this Act, be,
H punished with imprisonment for a term which may be
M/S. HARMAN ELECTRONICS (P) LTD. & ANR. v. MIS. 495
NATIONAL PANASONIC INDIA LTD. [S.8. SINHA, J.]

_,
_
extended to two years, or with fine which may extend to A
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 B
or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the
..,_
-r 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 thirty days of c
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, io
within fifteen days of the receipt of the said notice.
-'I" Explanation.-- For the purposes of this-section, "debt or
~-"' other liability" means a legally enforceable debt or other
liability."
8. The proviso appended thereto imposes certain E
conditions before a complaint petition can be entertained.
9. Reliance has been placed by both the learned
Additional Sessions Judge as also the High Court on a decision
of this Court in K. Bhaskaran v. Sankaran Vaidhyan Ba/an and I
Anr. [(1999) 7 SCC 510]. This Court opined that the offence
under Section 138 of the Act can be completed only with the
F
t
lo concatenation of a number of acts, namely, (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 G
payment within 15 days of the receipt of the notice. It was
opined that if five different acts were done in five different
·- localiti~s. 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 and the complainant would H
496 SUPREME COURT REPORTS
'
[2008] 17 S.C.R.
e j.-

A be at liberty to file a complaint petition at any of those places.
As regards the requirements of giving a notice as also receipt
thereof by the accused, it was stated:
"18. On the part of the payee heI has to make a demand
by "giving a notice" in writing. If that was the only
8 requirement to complete the off~nce on the failure of the
drawer to pay the cheque amount within 15 days from the
date of such "giving", the travailsl of the prosecution would
have been very much lessened. But the legislature says. ~,.
)
that failure on the part of the drawer to pay the amount
should be within 15 days "of the ~eceipt" of the said notice.
c It is, therefore, clear that "giving notice" in the context is
not the same as receipt of notice. Givi,ng is a process of
which receipt is the accomplishment. INs for the payee to
perform the former process by ~ending the notice to the
drawer at the correct address. " 1

D 10. The court,. however, refused to give a strict
interpretation to the said provisionsi despite noticing Black's ,,.._
Law Dictionary in regard to the meaning of the terms 'giving of ~.

notice' and 'receiving of the notice' i~ the following terms:
"19. In Black's Law Dictionary, 'giving of notice' is
E distinguished from 'receiving of the notice.' (vide page_ 621)
"A person notifies or gives notice' to another by taking such
steps as may be reasonably required to inform the other
in the ordinary course, whether or not such other actually
comes to know of it." A person 'receives' a notice when it
F is duly delivered to him or at the place of his business.
20. If a-strict interpretation is given that the drawer should -t
have actually received the noticeI for the period of 15 days "'
to start running no matter that the payee sent the notice
on the correct address, a tricks1er cheque drawer would )=--=
G get the premium to avoid receiving the notice by different
strategies and he could esc;ape from the legal
consequences of Section 138 of the Act. It must be borne
in mind that Court should not adbpt in interpretation which
.,.'
helps a dishonest evader and clips an honest payee as
>
that would defeat the very legislative measure."
H
M/S. HARMAN ELECTRONICS (P) LTD. & ANR. v. MIS . 497
.... NATIONAL PANASONIC INDIA LTD. [S.S. SINHA, J.]

11. For the said purpose, a presumption was drawn as A
..__, regards refusal to accept a notice. We may, before proceeding
to advert to the contentions raised by the parties hereto, refer
to another decision of this Court in Mis Dalmia Cement
(Bharat) Ltd. vs. Mis Galaxy Traders & Agencies Ltd. & ors.
[AIR 2001 SC 676], wherein this Court categorically held: 8
"6. Section 27 of the General Clauses Act deals with the
presumption of service of a letter sent by post. The
-~.- dispatcher of a notice has, therefore, a right to insist upon
and claim the benefit of such a presumption. But as the
presumption is rebuttable one, he has two options before c
him. One is to concede to the stand of the sendee that as
- a matter of fact he did not receive the notice, and the other
is to contest the sendee's stand and take the risk for
proving that he in fact received the notice. It is open to the
despatcher to adopt either of the options. If he opts the
former, he<'can afford to take appropriate 'Steps for the D
effective service of notice upon the addressee. Such a
~
~
course appears to have been adopted by the appellant-
company in this case and the complaint filed, admittedly,
within limitation ,from the date of the notice of service
conceded to have been served upon the respondents." E
(Underlying is mine)
It was furthermore held:
"The payee or holder of the cheque may, therefore, without
taking peremptory action in exercise of his right under
clause (b) of Section 138 of the Act, go on presenting the F
t cheque so as to enable him to exercise such right at any
)'
point of time during the validity of the cheque. But once a
notice under clause (b) of Section 138 of the Act is
'received' by the drawer of the cheque, the payee or the
holder'of the, cheqµe forfeits his right to again present the G
cheque as cause of action has accrued when there was
., failure to pay the amount within the prescribed period and
the period of limitation starts to run which cannot be
stopped on any account. This Court emphasised that
'needless to say the period of one month from filing the
H
e
A
498 SUPREME COURT REPO:RTS
I
[2008] 17 S.C.R..

complaint will be reckoned tr6m the date immediately
-
falling the day on which the periqd of 15 days from th~ date ~
of the receipt of the notice by t~e drawer expires'.
12. Indisputably, the parties had been carrying on business
at Chandigarh. The Head Office of the complainant -
B respondent may be at Delhi but it has a branch office at
Chandigarh. It is not in dispute that the transactions were
carried on only from Chandigarh. It is furthermore not in dispute
that the cheque was issued and presented at Chandigarh. The --;"(.._-._.

complaint petition is totally silent as to whether the said cheque
was presented at Delhi. As indicated hereinbefore, the learned
c counsel appearing on behalf of the complainant - respondent
contended that in fact the cheque was put in a drop box but as
the payment was to be obtained from the Delhi Bank, it was
-
sent to Delhi. In support of the said contention, a purported
certificate issued by the Citi Bank NA has been enclosed with .
D the counter affidavit, which reads as under:
"This is to confirm that M/s National Panasonic India Pvt. ~
Ltd. (NPI) having registered office at AB- 11, Community '(

Centre, Safdarjung Enclave, New Delhi - 110029 are
maintaining a Current Account No. 2431009 with our Bank
E at Jeevan Bharti Building, 3, Parliament Street, New Delhi-
110001 only and not at any other place in India including
Chandigarh.
Further confirmed thatCITI ban~ has provided the facility
for collection of Cheques/Demard Drafts from branches
F of NPI located at various placesYcities in India. However,
all amounts of cheques/Deman~ Drafts so collected on -t
behalf of National Panasonic l~dia Private Limited are
""(

forwarded and debited/credited )to the aforesaid Current
Account No. 2431009 with ou. Bank at Jeeval Bharti
Building, 3, Parliament Street, N'ew Delhi - 110001."
G ! '
13. The complaint petition does not show that the cheque
was presented at Delhi. It is absolutely silent in that regard. The .,.."
facility for collection of the cheque admittedly was available at
,_
Chandigarh and the said facility was availed of. The certificate
dated 24.6.2003, which was not produced befo~e the learned
H
M/S. HARMAN ELECTRONICS (P) LTD. & ANR. v. M/S. 499
NATIONAL PANASONIC INDIA LTD. [S.B. SINHA, J.]

court taking cognizance, even if taken into consideration does A
~--\
not show that the cheque was presented at the Delhi Branch
of the Citi Bank. We, therefore, have no other option but to
presume that the cheque was presented at Chandigarh.
Indisputably, the dishonour of the cheque also took place at
Chandigarh. The only question, therefore, which arises for B ,
consideration is that as to whether sending of notice from Delhi
itself would give rise to a cause of action for taking cognizance
-- ,..,. under the Negotiable Instruments Act.
14. It is one thing to say that sending of a notice is one of
the ingredients for maintaining the complaint but it is another
c
- thing to say that dishonour of a cheque by itself constitutes an
offence. For the purpose of proving its case that the accused
had committed an offence under Section 138 of the Negotiable
Instruments Act, the ingredients thereof are required to be
proved. What would constitute an offence is stated in the main
provision. The proviso appended thereto, however, imposes D
certain further conditions which are required to be fulfilled
.,.. ~: before cognizance of the offence can be taken. If the
ingredients for constitution of the offence laid down in the
provisos (a}, (b) and (c) appended to Section 138 of the
Negotiable Instruments Act intended to be applied in favour of E
the accused, there cannot be any doubt that receipt of a notice
would ultimately give rise to the cause of action for filing a
complaint. As it is only on receipt of the notice the accused at
his own peril may refuse to pay the amount. Clauses (b) and
(c) of the proviso to Section 138 therefore must be read
F
t
.. together. Issuance of notice would not by itself give rise to a
cause of action but communication of the notice would.
15. U is in the aforementioned situation, th~ distinction
noticed by the Bench in Mis Dalmia Cement (Bharat) Ltd.
(supra) and the meaning of 'giving of notice' and 'receiving of
notice' as contained in Black's law Dictionary assumes
G
...,_ significance .
16. What is meant by 'communication' albeit in different
context, has been considered by a Constitution Bench of this
Court in State of Punjab vs. Amar Singh Harika [AIR 1966 SC
H
.,,
'
500 SUPREME COURT REPORTS [2008] 17 S.C.R.

A 1313] stating:
"It is pl9in that the mere passing of an order of dismissal
would \not be effective unle~ss it is published and
communicated to the officer cor;icerned." ·
17. The distinction between passing of an order which is
B final and a communication thereof i~ not necessary has been
noticed by this Court subsequently in State of Punjab vs.
Khemi Ram [(1969) 3 SCC 28] stating:
"In our view, once an order is issued and it is sent out to
the concerned Government servant, it must be held to have
c been communicated to him, no matter when he actually
received it. We find it difficult rte persuade ourselves to
accept the view that it is only from the date of the actual
receipt by him that the order becomes effective. If that be
the true meaning of communication, it would be possible
for a Government servant to effectively thwart an order by
D
avoiding receipt of it by one method or the other till after
the date of his retirement evenI though such an order is
passed and despatched to him before such date. An
officer against whom action is sought to be taken, thus,
may go away from the address given by him for service
E of such orders or may deliberately give a wrong address
and thus prevent or delay its receipt and be able to defeat
its service on him. Such a meaning of the word
'communication' ought not to be given unless the provision
in question expressly so pro~ides. Actual knowledge by
F him of an order where it is one of dismissal, may, perhaps,
become necessary because bf the consequences which
the decision in The State of Punjab v. Amar Singh (AIR
1966 SC 1313) contemplate~. But such consequences
would not occur in the case of an officer who has
proceeded on leave and a'gainst whom an order of
G
suspension is passed because in his case there is no
question of his doing any ac;t or passing any order and
such act or order being challenged as invalid."
I
+'
For constitution of an offence under Section 138 of the Act,
the notice must be received by the accused. It may be deemed
H
. '
M/S. HARMAN ELECTRONICS (P) LTD. & ANR. v. MIS. 501
NATIONAL PANASONIC INDIA LTD. [S.B. SINHA, J.]

to have been received in certain situations. The word A
'communicate' inter alia means 'to make known, inform, convey,
...-1 etc.'
18. This Court in Sultan Sadik vs. Sanjay Raj Subba and
Ors [(2004) 2 SCC 377], held:
"33. The decision of this Court in Khemi Ram [(1969) 3 B
SCC 28] relied upon by Mr. Bachawat is not apposite as
therein an order of suspension was in question. This Court
in the said decision itself referred to its decision in State
..._, A- of Punjab v. Amar Singh Harika [AIR 1966 SC 1313],
which stated that communication of an order dismissing c
an employee from service is imperative. If communication
of an order for terminating the jural relationship is
imperative, a fortiori it would also be imperative at the
threshold."
19. Section 177 of the Code of Criminal Procedure
D
determines the jurisdiction of a court trying the matter. The court
ordinarily will have the jurisdiction only where the offence has
~-
been committed. The provisions of Sections 178 and 179 of
"t the Code of Criminal Procedure are exceptions to Section 177.
These provisions presuppose that all offences are local.
20. Therefore, the place where an offence has been
E
committed plays an important role. It is one thing to say that a
presumption is raised that notice is served but it is another thing
to say that service of notice may not be held to be of any
significance or may be held to be wholly unnecessary.
21. In Mosaraf Hossain Khan vs. Bhagheeratha Engg. F
Ltd. [(2006) 3 sec 658], this court held:
t-
"30. In terms of Section 177 of the Code of Criminal
• Procedure every offence shall ordinarily be inquired into
and tried by a court within whose local jurisdiction it was
committed. 178 provides for place of inquiry or trial in the G
following terms:
'178. (a) When it is uncertain in which of several
-t
local areas an offence was committed, or
(b) where an offence is committed partly in one local
area and partly in another, or

-
502 SUPREME COURT REPORTS [2008] 17 s.c.R.e

A (c) where an offence is a 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.
B 31. A bare perusal of the complaint petition would clearly
go to show that according to the complainant the entire
cause of action arose within ,the jurisdiction of the district
courts of Birbhum and in that view of the matter it is that
court which will have jurisdiction to take congnizance of the .,,,..i..:_

c offence. In fact the jurisdiction of the court of CJM, Suri,
Birbhum is not in question. It is not contended that the
1

complainant had suppresseq material fact and which if not
disclosed would have demonstrated that the offence was
committed outside the jurisdiction of the said court. Even
1

if Section 178 of the Cod e of Criminal Procedure is
D attracted, the court of the Chief Judicial Magistrate,
Birbhum will alone have juri~diction in the matter.
32. Sending of cheques from Ernakulam or ·the
respondents having :an office at that place did not
form an integral part of 'cause of action' for which
E the complaint petition was filed by the appellant and
cognizance of the offence under Section 138 of the
Negotiable Instruments Act, 1881 was taken by the
Chief Judicial Magistrate, Suri."
22. In Y.A. Ajit. v. Sofana Ajit [AIR 2007 SC 3151), this
F Court held:
'
"The crucial question is whether any part of the cause of
action arose within the jurisdiction of the concerned Court.
In terms-of Section 177 o(the Code it is the place where
the offence was committed. In essence it is the cause of
G action for initiation of the p~oceedings against the accused.
While in civil cases, normally the expression "cause of
action" is used, in criminal cases as stated in Section 177
of the Code, reference is to the local jurisdiction where the
offence is committed. These variations in etymological
H expression do not really make the position different. The
M/S. HARMAN ELECTRONICS (P) LTD. & ANR. v. MIS. 503
NATIONAL PANASONIC INDIA LTD. [S.B. SINHA, J.]
-· expression "cause of action" is therefore not a stranger to A
criminal cases."
.. ~ 23. Presumption raised in support of service of notice
would depend upon the facts and circumstances of each case.
Its application is on the question of law or the fact obtaining.
Presumption has to be raised not on the hypothesis or surmises
but if the foundational facts are laid down therefor. Only because
a
presumption of service of notice is possible to be raised at the
trial, the same by itself may not be a ground to hold that the
--....-...>"-.- distinction between giving of notice and service of notice
ceases to exist.
G
24. Indisputably all statutes deserve their strict application,
but while doing so the cardinal principles therefor cannot be lost
sight of. A Court derives a jurisdiction only when the cause of
action arose within its jurisdiction. The same cannot be
conferred by any act of omission or commission on the part of
the accused. A distinction must also be borne in mind between D.
the ingredient of an offence and commission of a part of the
offence. While issuance of a notice by the holder of a negotiable
,. ~ instrument is necessary, service thereof is al~o imperative. Only
on a service of such notice and failure dn the part of the
accused to pay the demanded amount within a period of 15 E
days thereafter, commission of an offence completes. Giving
of notice, therefore, cannot have any precedent over the
service. It is only from that view of the matter in Dalmia Cement
(Bharat) Ltd. v. Galaxy Traders &Agencies Ltd., [(2001) 6 SCC
463] emphasis has been laid on service of notice.
F
25. We cannot, as things stand today, be oblivious of the
t fact that a banking institution holding several cheques signed
....
by the same borrower cannot only present the cheque for its
encashment at fo.ur different places but also may serve notices
from four different places so as to enable it to file four complaint
G
cases at four different places. This only causes grave
harassment to the accused. It is, therefore, necessary in a case
of this nature to strike a balance between the right of the
-+
- eomplainant and the right of an accused vis-a-vis the provisions
of the Code of Criminal Proce,dure.
H
504 SUPREME COURT REPORTS [2008] 17 S.C.R. e
A 26. Learned counsel for the respondent contends that the
principle that the debtor must seek the creditor should be
applied in a case of this nature. '
27. We regret that such a principle cannot be applied in a
criminal case. Jurisdiction of the Oourt to try a criminal case is
8 governed by the provisions of the Criminal Procedure Code
and not on common law principle1
28. For the views we have taken it must be held that Delhi
High Court has no jurisdiction to t~ the complaint. We, however,
while exercising our jurisdiction under Article 142 of the
Constitution of India direct that Complaint Case No.1549
C pending in the Court of Shri N.K. Kaushik, Additional Sessions
Judge, New Delhi, be transferred to the Court of the District and
Sessions Judge, Chandigarh whb shall assign the same to a
court of competent jurisdiction. The transferee court shall fix a
specific date of hearing and shall not grant any adjournment on
D the date on which the compla,nant and its witnesses are
present. The transferee court is fyrthermore directed to dispose
of the matter within a period of .six months from the date of
receipt of the records of the case 'on assignment by the learned
District and Sessions Judge, CHandigarh.
E 29. The appeal is allowe'd with the aforementioned
observations and directions. There shall, however, be no order
as to costs.
K.K.T. Appeal allowed.

-