CRL.L.P./223/2016 of APPAREL EXPORT PROMOTION COUNCIL Vs COLLEGE CULTURE & ORS

IN THE HIGH COURT OF DELHI AT NEW DELHI%Judgment delivered on: 06.01.2020

+CRL.L.P. 223/2016

APPAREL EXPORT PROMOTION COUNCIL

.....Petitioner

versus

COLLAGE CULTURE & ORS

.....Respondent

Advocates who appeared in this case:For the Petitioner: Mr Kuljeet Rawal, Advocate.For the Respondent: Mr Atul Jain, Advocate for R-1 to 6: along with R-5 in person.

CORAMHON’BLE MR JUSTICE VIBHU BAKHRU

JUDGMENT

VIBHU BAKHRU, J

1.The present appeal is directed against the order dated 8[th]January,2016 (hereafter ‘the impugned order’) passed by Learned MetropolitanMagistrate in CC No.3775/15 captioned as ‘Apparel Export PromotionCouncil v. Collage Cultures & Others’, whereby the complaintpreferred by the appellant under Section 138 of the NegotiableInstruments Act, 1881 (hereafter the ‘NI Act’) was dismissed. Theappellant had re-presented its complaint but the same was notentertained, as it was filed beyond the period as stipulated by the courtwhere it was initially filed, while returning the complaint. The onlyquestion that arises for consideration is whether the appellant couldmaintain its complaint as re-presented.

2.Briefly stated, the controversy involved in the present petitionarises in the following context. The appellant is company incorporatedunder Section 25 of Companies Act, 1956 and is sponsored by theGovernment of India. It was formed, inter alia, with the object ofpromoting exports of readymade garments from India to various partsof the world. It is also assigned the task of administering the GarmentsPolicy issued by the Government of India. As part of its mandate, allpersons exporting garments from India to the rest of the world arerequired to be registered with the appellant.

3.The respondent is partnership firm registered with the appellantunder Registration Certificate No.37114. The respondent issued sevencheques: cheque bearing number 566352 for sum of ₹29,200/-; cheque bearing no. 566353 for ₹2,77,980/-; cheque bearing no. 566354 for ₹5,40,000/-; cheque bearing no. 566355 for ₹4,17,980/-; cheque bearing no. 566356 for ₹4,00,000/-; cheque bearing no. 566357 for ₹5,17,980/-; and cheque bearing no. 566358 for ₹1,86,060/- (all dated 1[st] June, 2003), for total sum of ₹23,69,200/- for revalidation of its Past Performance Entitlement (PPE), which is permissible under theGarment Export Entitlement Policy. When the said cheques werepresented for encashment, they were dishonoured. The return memodated 27/28[th]November, 2003 indicated the reason for dishonour of thecheques as ‘funds insufficient’.

4.The appellant caused legal notice dated 4[th]December, 2003 tobe sent to the respondents by speed post on 5[th]December, 2003 (Ex.C22). Since the respondents failed to make the payment within the

stipulated time, the appellant preferred complaint dated 17[th]January,2004 under Section 138 of the NI Act.

5.The appellant led pre-summoning evidence and tendered itsevidence by way of affidavit (Ex.C-1/A). It relied upon the cheques(Ex.C-4 to Ex.C-10), return memos (Ex.C-11 and Ex.C-17), legaldemand notice, registry receipts and proof of dispatch (Ex.C-18 toEx.C-22). The respondent and its constituent partners were summonedby the learned MM by an order dated 21[st]January, 2004. Thereafter,bailable warrants were issued against the accused persons, as they failedto appear.

6.In/around December, 2004 the respondent preferred CriminalMiscellaneous Main Petition (CMM no. 3011/2004) before this Court,inter alia, praying that the subject summoning order be recalled and thecomplaint under Section 138 of the NI Act be dismissed. The saidpetition (CMM No.3011/2014) was allowed on 11[th]October, 2007 andthe summoning order dated 21[st]January, 2004 was quashed.

7.Being aggrieved by said order dated 11[th]October, 2007 passedby this Court, the appellant filed Special Leave Petition under Article136 of the Constitution of India [SLP (Crl.) 5796/2008] before theHon’ble Supreme Court. The Apex Court allowed the same and theappeal was registered as Criminal Appeal No.1678/2012. The SupremeCourt, by its order dated 17[th]October, 2012, directed the Ld. Trial Courtto proceed with the trial, but not pass the final judgment without theleave of the Supreme Court. The parties were given liberty to adduce

oral or documentary evidence in support of their respective claims,which would be examined by the Trial Court. On the basis of this order,the appellant filed an application to revive its complaint.

8.On 1[st]August, 2014 the Supreme Court of India, in the matter ofDashrath Rupsingh Rathod v. State of Maharashtra: (2014) 9 SCC129, held that Section 177 of the Cr.P.C was required to be compliedwith and only the court exercising territorial jurisdiction where theoffence was committed – that is, where the cheque was dishonoured –could entertain complaint under Section 138 of the NI Act. Thus, theCourt of the Metropolitan Magistrate, within whose limits the bank onwhich the cheque is drawn is situated, would have the jurisdiction toadjudicate the complaint. The court clarified that ‘regardless of whetherevidence has been led before the Magistrate at the pre-summoningstage, whether by affidavit or oral statement, the Complaint will be’maintainable only at the place the cheque stands dishonoured.

9.Accordingly, the Ld. MM, Patiala House Courts, New Delhi videorder dated 25[th]August, 2014 directed return of complaint in originalalong with all documents in original after taking their certified copies.The appellant physically collected the complaint on 13[th]October, 2015.Thereafter, the appellant re-filed the complaint before the court havingjurisdiction, Ld.MM (NI Act)-01, South East, Saket, on 4[th]November,2015. On 9[th]November, 2015, the appellant/complainant was grantedan opportunity to file an appropriate application to explain the delayhowever, the Ld. Counsel for the complainant contended that there wasno delay in filing the case.

10.The Ld. MM, by the impugned order dated 8[th]January, 2016,dismissed the complaint on the ground that it was barred by limitation.A reading of the impugned order indicates that the reasons for dismissalof the complaint are, essentially, threefold. First, Ld. MM held that interms of the directions issued in Dashrath Rupsingh Rathod (supra),the complaint was to be returned and could be re-filed within thirtydays. That is, thirty days from the date of the order returning thecomplaint dated 25[th]August, 2014. The present case was re-filed on 04[th]November, 2015, that is, after expiry of approximately one year and twomonths of the order returning the compliant. Second, the learned MMalso held that in view of Sub-clause (1) and Sub-clause (2) of Section142A of the NI Act, as inserted by the Negotiable Instruments(Amendment) Ordinance, 2015 all pending cases were to transferred tothe court having competent jurisdiction. However, the present case wasneither pending in the Court of MM, Saket nor in the Court of MM,Patiala House Court and there was no provision in the Ordinance torestore the case. Third, that the Hon’ble Supreme Court has not stayedthe proceedings before the Trial Court. Therefore, the contention thatthe appellant was awaiting the final decision in its appeal pendingbefore the Supreme Court, could not be accepted as ground for not re-filing the complaint within the stipulated period.11.Mr Rawal, the learned counsel for the appellant assailed theimpugned order on several grounds. First, he submitted that that sincethe complaint was returned on 13[th]October, 2015 and was re-filed on4[th]November, 2015, it was within the period as stipulated by the

Supreme Court in Dashrath Rupsingh Rathod (supra).

12.Second, he contended that by 8[th]October, 2016, the NegotiableInstruments (Amendment) Ordinance, 2015 was not in force and wasreplacedbytheNegotiableInstruments(Amendment)SecondOrdinance, 2015. And, the amended Section 142A of the NI Act did notspecify any time limit for re-filing/transfer of the complaint.

13.Third, he submitted that as per the order dated 29[th]July, 2015,the Hon’ble Apex Court directed that opportunity be afforded to theappellant to adduce oral or documentary evidence but not pronounce itsjudgment without the leave of the Apex Court. He submitted thatdismissal of the complaint was without considering the order dated 29[th]July, 2015 passed by the Supreme Court.

14.The learned counsel for the respondents submitted that the saidcheques were not issued as consideration but as security cheques fordue performance and the same could be encashed only on the happeningof certain events, that is, non-utilisation of quota. He submitted thatthere was no enforceable liability when the cheques were presented andtherefore, the respondent had not committed any offence under Section138 of the NI Act. The learned counsel also countered the contentionsadvanced on behalf of the appellant. He submitted that by an order dated25[th]August, 2014, the Court directed that the complaint be returned andit gave an opportunity to the appellant to re-file the same within periodof thirty days. Therefore, the appellant had no discretion when to seekphysical return of the complaint and re-file the same. The appellant

could not defer re-filing of the complaint awaiting the disposal of itsSLP by the Supreme Court, as the court had expressly indicated that thetrial was not stayed.

Reasons and Conclusion

15.At the outset, it is relevant to observe that there is no dispute thatthe complaint filed by the appellant before the learned MetropolitanMagistrate, Patiala House Courts was not maintainable at the materialtime, as the said Court did not have the jurisdiction to entertain the saidcomplaint when it was instituted. The cheques in question were drawnon Vijaya Bank, Defence Colony Branch, New Delhi. The appellant hadpresented the cheques through its banker – IDBI Bank, Nehru PalaceBranch. The complaint was filed before the learned M.M. Patiala Houseas the cause of action was stated to have arisen within the jurisdictionof Police Station Kalkaji New Delhi, that is, where the complainant’sbank (IDBI Nehru Palace) – where the cheques in question weredeposited – is located.

16.It is relevant to refer to the decision of the Supreme Court inDashrath Rupsingh Rathod (supra), whereby the court had held asunder:-

“18. …The proviso to Section 138 of the NI Actfeatures three factors which are additionally requiredfor prosecution to be successful. In this aspect Section142 correctly employs the term “cause of actin” ascompliance with the three factors contained in theproviso are essential for the cognizance of the offence,even through they are not part of the action constituting

the crime. To this extent we respectfully concur withBhaskaran in that the concatenation of all theseconcomitants, constituents or ingredients of Section138 of the NI Act, is essential for the successfulinitiation or launch of the prosecution. We, however,are of the view that so far as the offence itself theproviso has no role to play. Accordingly reading ofSection 138 of the NI Act in conjunction with Section177 CrPC leaves no manner of doubt that the return ofthe cheque by the drawee bank alone constitutes thecommission of the offence and indicates the placewhere the offence is committed.

19.In this analysis we hold that the place, situsor venue of judicial inquiry and trial of the offencemust logically be restricted to where the drawee bankis located. …

21.…Weclarifythatthecomplainantisstatutorily bound to comply with Section 177, etc. ofCrPC and therefore the place or situs where the Section138 complaint is to be filed is not of his choosing. Theterritorial jurisdiction is restricted to the court withinwhose local jurisdiction the offence was committed,which in the present context is where the cheque isdishonoured by the bank on which it is drawn.”

17.In view of the above, it was not open for the appellant to file itscomplaint before the learned M.M., Patiala House Courts, who did nothave territorial jurisdiction over the place where the respondent’s bankwas located (that is, Defence Colony, New Delhi).

18.However, the Supreme Court, in order to obviate and avoid anylegalcomplications,directedthatallcomplaintcaseswhereproceedings had reached the stage of Section 145 (2) of the NI Act orbeyond – that is, cases where persons giving evidence had been

summoned and examined – would be deemed to be transferred from thecourt ordinarily possessing territorial jurisdiction to the court where thecomplaint had been filed. Thus, in such cases, notwithstanding that thecomplaint had been filed before Court which did not have theterritorial jurisdiction, the proceedings would not be impeded. This isso, because the said Court would now possess the jurisdiction toadjudicate the complaint by virtue of the same being transferred to it interms of the decision of the Supreme Court.

19.Admittedly, in this case, the complaint had not reached the stageof Section 145(2) of the NI Act and thus, at the material time, thelearned M.M., Patiala House Courts did not have the jurisdiction to trythe said complaint. The Supreme Court further directed that all othercases (cases other than those that had reached the stage of Section145(2) of the NI Act and beyond) would be returned for filing it in theproper court. The Court further directed that if such complaints arerefiled within period of thirty days of its return, it shall be deemed tohave been filed within the time prescribed by law unless the initial orprior filing was itself time barred.

20.In compliance with the directions issued by the Supreme Courtin Dashrath Rupsingh Rathore (supra), the learned M.M. by an orderdated 25[th]August, 2014, directed as under:-

“Accordingly the present complaint is returned inoriginal to the complainant to file the same beforethe appropriate court. Documents be returned inoriginal after taking certified copy of the same andthereafter file be consigned to record room after due

compliance.”

21.The appellant was thereafter required to re-file the complaintwithin the stipulated period of thirty days. Admittedly, the appellantchose not to re-file the complaint within the prescribed period. MrRawal contended that the appellant did not refile as it thought fit toawait the decision of the Supreme Court in Crl. Appeal No. 1678/2012.He submitted that the said decision was rendered on 29[th]July, 2015 andthe appellant could not be faulted for not re-filing the complaint withina period of thirty days of the order dated 25[th]August, 2014 passed bythe learned M.M., returning the complaint for re-filing the same beforethe appropriate court.

22.Plainly, the above contention is unmerited. By the order dated17[th]October, 2012, passed by the Supreme Court in SLP (Crl.)5796/2008, the Trial Court was directed to proceed with the complaintbut refrain from passing any final judgment. It is relevant to note thatthis order was passed at the instance of the appellant. More importantly,the appellant had taken steps for reviving the complaint and pursuant tothe said order, it had filed an application requesting the Trial Court toproceed with the complaint. And, in terms of the order dated 17[th]October, 2012, the Trial Court had revived the proceedings. In view ofthe above, it is not open for the appellant to now urge that it wasawaiting any further orders from the Supreme Court. Clearly, once theproceedings before the Trial Court stood revived, the appellant wasbound to follow the orders passed in those proceedings, unless the samewere stayed.

23.It is also relevant to note that the appellant did not refile thecomplaint within the period of thirty days of the final decision of theSupreme Court in its appeal (Crl. Appeal No. 1678/2012). The saidappeal was allowed by an order dated 29[th]July, 2015; however, theappellant had re-filed the complaint on 04[th]November, 2015, that is,about hundred days after the decision of the Supreme Court. Although,the appellant states that it had taken steps for collecting the original fileimmediately after the Supreme Court had delivered its decision on 29[th]July, 2015, there is no material on record to indicate the date on whichthe application for receiving the original complaint was made.

24.The contention that since the original complaint was received on13[th]October, 2015, the same was within the period of thirty days asstipulated by the Supreme Court in Dashrath Rupsingh Rathore(supra), is bereft of any merit. The complaint was returned by the orderdated 25[th]August, 2015 passed by the learned M.M. The fact that theappellant had not physically collected the said complaint would notextend the period, during which it was required to re-file the same.

25.Mr Rawal also contended that in view of the NegotiableInstruments (Amendment) Ordinance 2015, the complaint filed by thecomplainant is required to be transferred to Court having properjurisdiction. Thus, even if the appellant had not accepted return of itscomplaint, the same was required to be entertained as the Learned MM,Patiala House Courts could exercise the jurisdiction in the matter. Herelied upon Sections 3 and 4 of the said Ordinance.

26.The Negotiable Instrument (Amendment) Ordinance, 2015 wasnotified on 15[th]June, 2015 and came into effect immediately. Sections3 and 4 of the said Ordinance, are set out below:-

“3. In the principal Act, section 142 shall benumbered as sub-section (1) thereof and after sub-section (1) as so numbered, the following sub-sectionshall be inserted, namely:-

“(2) The offence under section 138 shall be inquiredinto and tried only by court within whose localjurisdiction. –

(a) if the cheque is delivered for collectionthrough an account, the branch of the bank wherethe payee or holder in due course, as the case maybe, maintains the account, is situated; or

(b) if the cheque is presented for payment by thepayee or holder in due course otherwise throughan account, the branch of the drawee bank wherethe drawer maintains the account, is situated.

Explanation.—For the purposes of clause (a), where acheque is delivered for collection at any branch of thebank of the payee or holder in due course, then, thecheque shall be deemed to have been delivered to thebranch of the bank in which the payee or holder in duecourse, as the case may be, maintains the account.”

4. In the principal Act, after section 142, the followingsection shall be inserted, namely:-

“142A. (1) Notwithstanding anything containedin the Code of Criminal Procedure, 1973 or anyjudgment, decree, order or directions of any court,all cases arising out of section 138 which werepending in any court, whether filed before it, ortransferred to it, before the commencement of the

Negotiable Instruments (Amendment) Ordinance,2015 shall be transferred to the court havingjurisdiction under sub-section (2) of section 142as if that sub-section had been in force at allmaterial times.

(2)Notwithstanding anything contained insub-section (2) of section 142 or sub-section (1),where the payee or the holder in due course, as thecase may be, has filed complaint against thedrawer of cheque in the court having jurisdictionunder sub-section (2) of section 142 or the casehas been transferred to that court under sub-section (1), and such complaint is pending in thatcourt, all subsequent complaints arising out ofsection 138 against the same drawer shall be filedbefore the same court irrespective of whetherthose cheques were delivered for collection orpresented for payment within the territorialjurisdiction of that court.

(3)If, on the date of the commencement of theNegotiable Instruments (Amendment) Ordinance,2015, more than one prosecution filed by thesame payee or holder in due course, as the casemay be, against the same drawer of cheques ispending before different course, upon the said facthaving been brought to the notice of the court,such court shall transfer the case to the courthaving jurisdiction under sub-section (2) ofsection 142 before which the first case was filedand is pending, as if that sub-section had been inforce at all material times.”

27.In terms of Section 142 (A) (1) of the NI Act as inserted by virtueof Section 4 of the said Ordinance, all cases arising out of Section 138of the NI Act that were pending in any Court were directed to be

transferred to court having jurisdiction under Section 142(2) of the NIAct, as if the said provision was in force at all material times. Thus, if acomplaint under Section 138 of the NI Act was pending in Court thatotherwise did not have jurisdiction, it would be transferred to the Courthaving jurisdiction in terms of Section 142 (2) of the NI Act.

28.It is also relevant to note that in terms of Section 142 (A) of theNI Act, as amended by the Negotiable Instrument (Amendment) Act,2015 – which was enacted with retrospective effect from 15.06.2015 –all cases transferred under the Negotiable Instruments (Amendment)Ordinance, 2015 were deemed to have been transferred under the NIAct. There is no dispute that if the appellant’s complaint was pendingbefore the learned M.M. (Patiala House Courts) or had been re-filedbefore the Learned MM, South East, Saket Courts the appellant couldhave the benefit of Section 142(A) (1) of the NI Act as inserted by theNegotiable Instruments (Amendment) Ordinance 2015. However, thesaid ordinance is of little assistance to the appellant since the said casewas neither pending before the learned M.M. Patiala House Court norbefore the court of learned MM, South East Distt. as on 15[th]June, 2015,that is, the date on which the said ordinance came into force. Theappellant’s complaint (CC 204/2004) stood returned to the appellant byvirtue of the order dated 25[th]August, 2018 passed by the learned M.M.

29.Mr Rawal’s contention that the appellant is entitled to the benefitof Section 142(A)(1) of the NI Act, as inserted by the said ordinance, isalso inconsistent with the action of the appellant, inasmuch as, theappellant had, after the said ordinance came into force, sought return of

the physical copy of the complaint and had accepted the same for beingre-filed before the learned M.M. (South East) District, Saket. Thus, theappellant’s contention is an afterthought.

30.This Court is also of the view that the aforesaid contention iswithout merit. The logical sequitur of accepting the above contentionwould be that even if the appellant had not re-filed the said complaint,its complaint would, nonetheless, be required to be adjudicated as apending case.

31.In view of the above, this Court finds no infirmity with theimpugned decision. The present petition seeking leave to appeal againstthe impugned judgment is, accordingly, dismissed.

JANUARY 06, 2020pkv

VIBHU BAKHRU, J