Aashirwad Enterprises vs Sambhar Salts Ltd.

M.A.A. Khan, J.—M/s Sambhar Salt Ltd. (Respondent No. 1) is a company registered under Companies Act, 1956 manufacturing and selling iodised salts at Sambhar Lake, Distt. Jaipur. It is a Rajasthan Government undertaking and has its registered office at Lal Niwas, 21, Sawai Ram Singh Road, Jaipur. It is a subsidiary company of M/s Hindustan Salts Ltd. which has its registered office at above mentioned address but which is owned by the Central Government. State Bank of Bikaner and Jaipur Branch Office at S.M.S. Highway, Jaipur works as Banker to the Respondent Company.

M/s Ashirwad Enterpsies (salts merchants) Dharamshala Road, Seharsa, Bihar, the accused Petitioner is a proprietorship concern of Smt. Renu Devi, who is accused No. 2 in the complaint but not a party to this petition. This concern deals in salt at Dharamshala Road, Bihar.

On July 20, 1993 the Respondent company through its Senior Manager (Commercial) Shri Sudhir Bohra, who was stated to be duly authorised person to file a complaint for and on behalf of the Respondent company, filed a complaint against the Petitioner and its sole proprietor, Smt. Renu Devi, aforementioned, in the Court of Additional Chief Judicial Magistrate No. 5, Jaipur City, Jaipur with the allegations that in January 1993 the Petitioner negotiated with the Respondent company for purchase of salt and on negotiations being successful the Respondent Company consigned 42 wagons load of salt in February 1993 and 50 wagons load in March 1993 to the Petitioner, that towards the payment of the price of the aforesaid quantity of salt Smt. Renu Devi, the sole-proprietor of the Petitioner sent to the Respondent Company a cheque for Rs. 3.00 lakhs being No. QQX 607755 dated 3.4.1993 drawn on Punjab National Bank, Seharsa, Bihar in favour of the Respondent company, that as per request of Petitioner''s proprietor the cheque was delivered after the expiry of one month''s period from the date of issue thereof to its Banker, State Bank of Bikaner and Jaipur, Jaipur, for collecting the cheque amount from Petitioner''s bank at Seharsa, that by its memo dated 18.5.1993 Petitioner''s banker at Seharsa returned the cheque with the endorsement "insufficient funds as on date as well as on 3.4.1993", that banker thereupon informed the Respondent accordingly, that thereafter the Respondent Company delivered a notice u/s 138(b) of the Act to the Petitioner through Regd. Post requiring its proprietor to make payment of Rs. 3 lacs within 15 days of the receipt of notice, that the said notice was received by Smt. Renu on 8.6.1993, but since no payment was made by her the complaint was being filed. The learned Magistrate conducted necessary enquiry and examined Sh. Sudhir Bohra u/s 202 Code of Criminal Procedure After considering the statement of Sh. Bohra and the document proved by him as Ex.P. 1 to Ex.P. 19 the learned Magistrate came to hold the opinion that the evidence placed before him prima facie discloses the commission of the offence u/s 138 of the Act by the Petitioner and its proprietor Smt. Renu Devi, he therefore directed issuance of summons against them accordingly vide his order dated 16.8.1993.

Instead of putting in appearance through its proprietor or through its duly authorised representative, before the Court of the learned Magistrate in compliance of the summons issued by him and thus challenging the justification of issuing process u/s 204 Code of Criminal Procedure against them the Petitioner chose to invoke the inherent powers to this Court u/s 482 Code of Criminal Procedure on the ground of the proceedings initiated by the learned Magistrate vide his order dated 16.8.1993 amounting to gross abuse of the process of his Court.

Noting that the Petitioner is simply the trade name of the sole-proprietorship business being run by Smt. Renu Devi and thus, legally speaking lacks the characteristics of a legal personality capable to sue and being sued, the Bench enquired of the learned Counsel for the Petitioner as to whether Smt. Renu Devi, who is the main and for all purposes, the real and only accused in the criminal case has accepted the impugned order as she is neither stated to have preferred similar petition separately nor was she made a party to this petition. Mr. Garg, the learned Counsel for the Petitioner was fair enough to state that this petition has in fact been presented by Smt. Renu Devi on her own behalf as well as on behalf of her proprietorship business and that any decision given herein by this Court would be a decision in respect of Smt. Renu Devi''s grievance also. In view of such frank submission by Mr. Garg and with a view to avoid possible multiple proceedings of the same nature subsequently in the name of Smt. Renu Devi it is hereby made clear that this petition is treated as having been filed by both the accused, as arraigned in the complaint and as summoned by the learned Magistrate vide his impugned order.

At the very outset it needs mention that the learned Counsel for the Respondents, making reference to the observations of the Apex Court in Sh. P.V. Narsimha Rao''s case, as reported in press, submitted that in view of the basic character of the impugned order being that of an ex parte order, liable to be recalled and cancelled by the Magistrate himself, on sufficient cause being shown to him to do so, all the points raised in this petition can be agitated before and decided by the learned Magistrate and, therefore, this petition deserves to be decided with such directions. However, Mr. Garg vehemently opposed the adoption of such a course for disposal of the petition. The learned Counsel urged with much industry that the right of an accused to challenge the justification of criminal proceedings which amount to abuse of the process of a court cannot be defeated by such argument. He emphasised that the objections relating to jurisdiction of the Magistrate to take cognizance of offence u/s 138 of the Act in the facts and circumstances of this case, continuance of the cause of action to prosecute the Petitioner and competency of the person filing the complaint were such as could not have been decided by the learned Magistrate. Mr. Garg insisted that this Court could decide such objections finally here and now and should not leave them for the decision by the learned Magistrate.

Ordinarily, I would not have felt persuaded to decide the objections as raised by Mr. Garg as they all, in my opinion, can very well be decided by the learned Magistrate at his level but looking to the too much insistence of Mr. Garg view to shorten the life of this already prolonged litigation which may further be unnecessarily enlarged by raising the same arguments before the learned Magistrate, I have considered it proper to decide the objections raised by Mr. Garg.

The first objection raised by Mr. Garg against Magistrate''s action of taking cognizance of offence u/s of the Act is that the learned Magistrate had no territorial jurisdiction, was intended to be made and received through Petitioner''s banker and the cheque was drawn and delivered to Respondent''s agent servant at Seharsa (Bihar). It was submitted that in view of the provisions contained in Section 177 Code of Criminal Procedure a competent Court of Magistrate at Seharsa In Bihar and not in Jaipur in Rajasthan had the jurisdiction u/s 142 of the Act to entertain the complaint. This argument was sought to be supported with the decision of the Kerala High Court in Muraleedharan v. Pareed 1992(1) BC 315. The argument advanced is totally misconceived and deserves to be dismissed outrightly.

The general rule founded in Section 177 Code of Criminal Procedure is that every offence shall ordinarily be enquired into and tried by a Court within whose local jurisdiction it was committed. This general rule is based on the common law principle of England that all crimes are local and justifiable by local Courts only within whose jurisdiction they are committed. But the scheme of Chapter XIII of the Code of Criminal Procedure, 1973 exhibits enlargement of this principle and the ambit of the situs as much as possible. This intention has been made clear by the Indian Legislature by enacting in Section 179 Code of Criminal Procedure that (a) where it is uncertain in which of several local areas an offence was committed, or (b) when an offence is committed partly in one local area and partly in another, or (c) where an offence is a continuing one, and continues to be committed on more local areas than one or where it consists of several acts done in different local areas, it may be enquired into or tried by a Court having jurisdiction over any of such local areas. The ambit of situs so enlarged by Section 178 Code of Criminal Procedure was extended by providing in Section 179 that 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 enquired into or tried by a Court within whose local jurisdiction such thing has been done or such consequence has ensued. A combined reading conveys the message that the situs for trial of an offence is not confined to a particular transaction. It is related to the accrual of cause of action which is a bundle of facts and may well extend over the territorial jurisdiction of more than one Courts. Therefore, the venue of enquiry or trial of a case has to be determined by the averments made in the relevant complaint.

In the instant case it was specifically averred in the complaint that the Respondent company which has its registered office and banker at Jaipur had sent the consignments of the contracted goods to the Petitioner through Railways which Petitioner''s proprietor Smt. Renu Devi duly received and delivered a cheque of Rs. 3 lacs to the Respondent, that the Respondent company directed its banker at Jaipur to collect the amount of the aforesaid cheque from Petitioner''s banker at Seharsa, that Petitioner''s banker sent the cheque back unencashed with the endorsement that the drawer has no sufficient funds in his account with them so as to honour the cheque. These averments clearly show that not only the goods were to be sent to the Petitioner from a place within the territorial jurisdiction of a Court in Rajasthan but also that the payment was intended to be received at Jaipur. In commercial transactions, the cause of action may well spread over a series of transactions giving rise to several parts of cause of action. The consequences of the transections entered into at one place may ensue at another place. Under such situation the cause of action would arise at the place where the initial transaction had taken place as well as at that place also where the consequences from that transection had ensued. In the instant case since the goods was despatched from a place in Rajasthan and in view of the trade practice, the payment of the price for the goods was to be received at Jaipur, a Court in Rajasthan had the jurisdiction to try an offence which was committed in relation to. the transactions, having taken place in this case.

In the case relied upon by Mr. Garg no different proposition appears to have been thrown by Kerala High Court. In that case, with reference to Allahabad High Court decision in Sanatan Daw Vs. Dasarathi Tah, and Supreme Court decision in State of M.P. v. M.P. Ghaira AIR 1957 SC 196, it was held that the venue of enquiry or trial has primarily to be determined by the averments contained in the complaint. It was further observed by their Lordships of the Kerala High Court that 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 an indication to the effect either expressly or impliedly. Their Lordships pointedly observed that 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 an also be the place where the cheque was issued or delivered.

In the case of M/s Goutham T.V. Centre and Anr. v. M/s Apex Agencies and Anr. 1993 CCC 137 (A.P.) : 1993 CLJ 1004, the Andhra Pradesh High Court examined the same issue. After having examined several cases on the point G. Radhakrishna Rao, J. opined in Para 9 as under:

Cause of action is a bundle of facts. Issuance of cheque, presentation of the cheque, endorsement of dishonour, issuance of a statutory notice and the location of the office of the person in whose favour the cheque was issued are all the factors which are to be taken into account for deciding the cause of action. Cause of action need not confine to a particular transaction where an offence is alleged to have been committed. In cases filed u/s 138 of the Negotiable Instruments Act, series of acts will result at different places as already discussed (supra). Giving the cheque by the accused to the complainant and presenting the same for collection by the complainant at his place will also be the facts constituting the offence. So the place where the cheque had been issued also has got jurisdiction and the place where the intimation has been received from the collecting Bank also confers jurisdiction.

I am in respectful agreement with his Lordship and consequently hold that in the present case it is abundantly clear that cause of action for filing a complaint for offence u/s 138 of the Act had arisen to the Respondent Company against the Petitioner and/or its proprietor within the territorial jurisdiction of the learned Magistrate. The objection raised by Mr. Garg is devoid of any force and is rejected as such.

The next argument of Mr. Garg is that the complaint in the present case was not filed by a person competent u/s 142 of the Act to file such a complaint. It was submitted that Sh. Sudhir Vohra, the Senior Manager Commercial, who filed the complaint was not authorised by or under any resolution of the Respondent company to file such a complaint for and on behalf of it, it was further submitted that Mr. C.S. Kataria, General manager of the Respondent company, who authorised Sh. Vohra to file the complaint was not competent to issue such an authorisation in favour of Sh. Vohra. this argument too is misconceived.

Section 142 of the Act provides as under:

Cognizance of an offence - Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974):

(a) no Court shall take cognizance of any offence punishable u/s 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 u/s 138.

Clause (a) of Section 142 says that in order to take cognizance of any offence punishable under the Act by the competent Magistrate, the complaint must have been made in writing by the payee or, as the case may be, the holder in due course of the cheque. The word ''payee'' used in the phraseology of Clause (a) includes such person as is authorised by the ''payee'' himself or itself to make the complaint, in writing on his or its behalf. A company is a juristic person and may sue or be sued in its juristic name through a person incharge of and responsible to the company for the conduct of its business. To carry on its day to day business and to sue or to defend it and act for and on its behalf the company may nominate or authorise any of its Directors/employees. The Articles and the Memorandum of Association of the company may contain a provision to that effect and/or the company may, by a resolution passed by it, nominate or authorise a Director/employee to sue or to defend it for and on its behalf. This is all in the common course of a company''s business activities to do so. Section 114 of the Evidence Act provides that the Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to facts of the particular case. Illustration (f) to Section 114 says that the Court may presume that the common course of business had been followed in particular cases. Thus unless the contrary is shown, the Court may presume that in the matter of authorising one of its Director/employees to sue for it and on its behalf the common course of business has been followed.

In the instant case, the complaint was made in the name of the Respondent Company through Mr. Sudhir Vohra, Senior Manager (Commercial). In para (1) of the complaint it was averred that the company had authorised Sh. Vohra to make the complaint for it and on its behalf, in support of such averments, the authority letter dated July 19, 1993 issued by the General manager of Respondent company had been filed alongwith the complaint. In his statement, recorded u/s 200 Code of Criminal Procedure Mr. Vohra had stated the relevant facts and proved the said authority letter. At the stage of taking cognizance of the offence u/s 138 of the Act there was prima facie sufficient positive evidence before the learned Magistrate not only to feel satisfied that the complaint has been made by a duly authorised person but also to presume that the common course of business had been followed in the case. There was nothing before him to doubt that the common course of business ha snot been followed and that Mr. Vohra was not competent to make the complaint.

At that stage of the proceedings the learned Magistrate was neither required nor expected to enquire in depth as to whether Section 29 of the Companies Act had been complied with or not particularly when he had no reasons to embark upon such enquiry. The case of Nibro Ltd. v. National Insurance Co. Ltd. 1991 CC (Vol.70) Page 388 at page 401 has no relevance. The objection raised is thus totally baseless and has no merits at all. The same is accordingly rejected.

Lastly it was urged by Mr. Garg that the cause of action to make the complaint did not survive to the Respondent company on 20.7.1993 inasmuch at that along with its letter dated 17.5.1993 the Petitioner had sent a demand draft of.Rs.50,000/- to the Respondent company which had got in encashed and had thus waived its right to prosecute the Petitioner. In this behalf my attention was drawn to the following letter dated 26.5.1993 written by the Respondent Company to the Petitioner.

A bare reading of the above letter tells that in its letter dated 2.4.1993, the Petitioner had asked the Respondent company to collect the amount of the cheque in question through its banker after the expiry of the complete one month and during that period of one month the Petitioner proposed to make the payment of Rs. 3 lacs through demand draft. Delivery of a demand draft of Rs. 50,000/- only towards the discharge of its liability was not conformity with the position represented by the Respondent in its letter dated 2.4.1993 and non-payment of the total amount of Rs. 3 lacs by it within thirty days, as agreed to by it, justified Respondent''s action of sending the cheque for collection through its banker. Dishonouring of the cheque by Petitioner''s banker and thereafter not making any payment of the amount of cheque for the balance part of the amount despite written notice and lapse of statutory period for making such payment, exhibited a dishonest intention on the part of the Petitioner justifying the making of complaint u/s 138 of the Act by the Respondent Company against the Petitioner. It is, therefore, held that the right of the Respondent company to prosecute the Petitioner for offence u/s 138 of the Act did not get waived by its accepting the part-payment of Rs. 50,000/-. The objection raised is dismissed.

To sum up it is held that neither the impugned order nor the continuance of the proceedings on the basis of that order amounts to abuse of the process of the Court of the Additional Chief Judicial Magistrate No. 3, Jaipur. Instead it is gathered that this petition was designedly filed only to delay the proceedings in the case. The delay so caused is thus attributed to the Petitioner who would not get any benefit of such delay at any future stage of the proceedings. The proceedings of the case have already been delayed for about three years. The learned Magistrate is therefore, directed to take proceedings in the case expeditiously and to dispose of the case as early as possible. The objections decided by this Court shall not be allowed by the Magistrate to be reagitated before him.