1. Revision is directed against the order of Judicial Magistrate of First Class, Mannarkkad finding that the court has jurisdiction to try the offence alleged against revision petitioner. A cheque is alleged to have been issued by revision petitioner to first respondent towards amount due to him. On presentation the cheque was dishonoured by the bank. First respondent issued notice and demanded the money but the amount was not paid in spite of that notice and that resulted in the complaint under Section 138 of the Negotiable Instruments Act (hereafter referred as Act) before the Judicial Magistrate of First Class, Mannarkkad.

2. Revision petitioner questioned the maintainability of the complaint before that court for the reason that the cheque was issued at Thodupuzha, outside the jurisdiction of the Mannarkkad Court and that the Mannarkkad Court has no territorial jurisdiction.

3. The court below by order dated 28-9-1991 repelled the contentions of revision petitioner and held that it has jurisdiction. Hence the revision.

4. Sections 138 to 142 of the Negotiable Instruments Act (Act 26 of 1981) were introduced by Section 4 of the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act 1988. Under these provisions if a person issues a cheque for the discharge of any debt or other liability and if it is dishonoured for lack of funds or if it exceeds the arrangements made with the bank he will be deemed to have committed an offence and will be punished with imprisonment for a term which may extend to one year or with fine which may go upto twice the amount of the cheque or both. But in order to constitute the said offence such cheque should have been presented to the bank within a period of six months of the date of its drawal or within a period of its validity whichever is earlier and the payee or holder in due course of such cheque should have made a demand for the payment of the said amount by giving a notice in writing to the drawer of the cheque within 15 days of receipt of information by him from the bank regarding the return of the cheque unpaid and the drawer of such cheque had failed to make the payment within 15 days of the receipt of the said notice. It is provided under Section 139 that it shall be presumed unless the contrary is proved that the holder of the cheque received the cheque in discharge in whole or in part of any debt or other liability. Section 142 provides that 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 cheque and 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. The said clause reads:

“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, within fifteen days from the receipt of the said notice.”

5. The cause of action is therefore the non-payment of the money to the payee within 15 days of receipt of notice by which demand for payment of the said money was made. That demand has to be made under clause (b) of the proviso to Section 138. A division bench of this court in Prithviraj v. Mathew Koshy (1991 (1) KLT 595) held that the act of issuing a cheque cannot be considered as starting point of the commission of offence. It was further held that dishonour of cheque by itself does not give rise to a cause of action because payment can be made on receipt of notice of demand contemplated in clause (b) of Section 138 and in that event there is no offence, nor any attempt to commit the offence, nor even a preparation 9 to commit the offence. It was held that failure to pay the amount within 15 days of receipt of notice alone is the cause of action and nothing else.

6. Where is the amount-payable? Is it at the place where the creditor a resides or the place where the debtor resides? Is it at the place where the cheque was handed over or the place where the cheque was presented for encashment? Is it at the place where the bank to which the cheque was issued is located? Can it be said that the cause of action had arisen at each of the above mentioned places, if not which is the place where the cause of action had arisen? These questions require answer in this revision.

7. Since Section 142(b) of the Act speaks of cause of action we have to see what cause of action means. A court gets jurisdiction over the matter if the cause of action arises within the local limits of its jurisdiction. Cause of action means: “the whole bundle of material facts which it is necessary for the plaintiff to prove in order to entitle him to succeed in the suit”. To ascertain whether the bundle of facts give rise to the cause of action and to determine whether one or more of those facts had occurred within the territorial jurisdiction of the court the entire plaint has to be taken into consideration. In the decision in The State of Madras v. C.P Agencies (AIR 1960 SC 1309) the Supreme Court has quoted with approval the following observations in Mst. Chand Kour v. Partab Singh - 15 Indian Appeals 156.

“Now the cause of action has no relation whatever to the defence which may be set up by the defendant, nor does it depend upon the character of the relief prayed for by the plaintiff. It refers entirely to the grounds set forth in the plaint as the cause of action, or, in other words, to the media upon which the plaintiff asks the court to arrive at a conclusion in his favour.”

8. Here is a case of repayment of a debt. That is made clear in Section 138 by the phrase “for discharge in whole or in part of any debt or other liability”. The cheque drawn by the person on an account maintained by him with a bank should be in respect of such debt or liability which as per the explanation to Section 138 means “a legally enforceable debt or liability”. Since the amount payable is a debt the payee is a creditor and the drawer of the cheque the debtor.

9. The common law rule is that the debtor must seek the creditor if no place of payment is specified in the contract or cannot be inferred. Section 49 of the Indian Contract Act stipulates that when a promise is to be performed without application by the promisee and no place is fixed for the performance of it, it is the duty of the promisor to apply to the promisee to appoint a reasonable place for the performance of the promise and to perform it at such place. The common law rule that the debtor must seek the creditor and Section 49 of the Contract Act cannot be made applicable to Negotiable instruments. The settled position is that in the case of a promissory note the court where the promisee resides has no jurisdiction. The jurisdiction lies either in the place where the maker executed the pronote or the place where he resides. The position is different in the case of a bill of exchange in which case the jurisdiction lies in the place where the drawee resides. What is the position in the case of a cheque is the matter to be considered in this revision.

10. Cheque as defined in section 6 of the Act is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. Bill of exchange is defined in Section 5. It reads:

“A bill of exchange is an instrument in writing containing an unconditional order signed by the maker directing a certain person to pay a certain sum of money only to, or to the order, of a certain person or to barer of the instrument.”

11. The drawing of a bill of exchange does not by itself create an obligation between the drawer and the holder. If the drawee refuses to accept the bill of exchange or to pay the money on the due date the holder cannot sue him for the amount. The remedy is only against the drawer and the prior endorsees. On the other hand the cheque is always drawn on a bank or banker and is payable immediately on demand. It is as good as payment in cash. The Bombay High Court in Kirlosker Bros. Ltd. v. Commissioner of Income-tax (AIR 1952 Bombay 306) held:

“It is also well settled in commercial practice, as I shall presently point out, that a cheque is looked upon as a payment if a creditor accepts a cheque in place of the country's currency.”

12. In short the issue of a cheque amounts to a payment unless it is dishonoured.

13. The question whether the court within whose jurisdiction cheque is delivered can entertain the suit arose for consideration in the decision in Lachhman Dass v. Chuhra Mal (AIR 1952 Pepsu 4). It was held that in a suit for recovery of loan, the cause of action does not constitute merely the giving of the loan but it consists of a bundle of facts including the agreement relating to the loan, the place where the plaintiff delivered to the defendant the cheque for the amount of loan and the place where the loan was to be paid back. It was observed that if no cash was advanced by plaintiff to the defendant but it was the cheque that constituted the loan, then the place where the defendant got the cheque from the plaintiff gives rise to a part of the cause of action and the plaintiff has a right to institute the suit in the civil courts within whose territorial jurisdiction the cheque was delivered to the defendant.

14. That was a case where the amount was advanced by issuing a cheque by plaintiff to defendant and the suit was for return of the money. The payment of the cheque amounts to payment in cash and the court within whose jurisdiction the cheque was issued has got jurisdiction.

15. The question whether the place where the cheque was received gets jurisdiction was considered by the Madhya Bharat High Court in Horsburgh v. Chandroji (AIR 1957 M.B 90). It was held that a cheque unless dishonoured is payment and the payment takes effect from the delivery of the cheque but is defeated by the happening of condition, i.e non-payment at maturity and if the cheque is not dishonoured but cashed, the payment relates back to the date of the receipt of the cheque. In that case the cheque was received by the defendant at Gwalior on a bank at Bombay. It was not dishonoured but cashed at Bombay. It was held that the defendant received the payment when the cheque was delivered to him at Gwalior and a part of the cause of action had arisen at Gwalior. The drawer of the cheque was found entitled to institute the suit for recovery of money in the court at Gwalior within whose territorial jurisdiction the cheque was delivered to the defendant.

16. In the two decisions aforementioned the court within whose jurisdiction the cheque was issued or delivered was found to have jurisdiction. I am in respectful agreement with the views expressed in those decisions. In a case of payment of money by issue of cheque the court within whose jurisdiction the cheque was issued or delivered has therefore jurisdiction. In those cases money was advanced by issue of cheque and the claim was for return of that money. The position cannot be different in a case where cheque was issued in repayment of any amount for the discharge of any debt or other liability. In other words, the principles enunciated in those decisions are to be applied in the case of an offence coming under Section 138 of the Negotiable Instruments Act.

17. In the case of a promissory note also the place where money is payable expressly or impliedly under the contract is the place where the cause of action arises. Vide I.L.R 31 Madras 223 - Raman Chettiyar v. Gopalachari. The place where the cause of action arises in the case of a promissory note was considered by the Bombay High Court in Jivatlal Purtapshi v. Lalbhai Fulchand Shah (AIR 1942 Bombay 251). It was held that the cause of action on a negotiable instrument generally arises wherever any one of the facts, the proof of which is essential under the circumstances of the case occurred. The place of the making of the promissory note is an essential part of the cause of action so as to give the court of that place jurisdiction to try the suit on the note. It is observed that it may sometimes happen that a promissory note is executed in one place but delivered to the promisee at another place and moneys due thereunder are payable at a third place. It was held that in such a case part of the cause of action arises at any one of these places and the suit may be filed at any one of these places at the plaintiff's option. The place of payment is the place of performance of the promise contained in the promissory note. It was observed that such a place may be mentioned either expressly in the note or may be inferred by implication. It was held:

“It is for the Court to determine the place where, in the performance of the promise contained in the promissory note, the money was expressly or impliedly payable by the defendant.”

18. Regarding issue of a cheque also the position cannot be different. The cause of action arises at the place where the cheque was issued or delivered or the place where the money was expressly or impliedly payable.

19. Learned counsel for revision petitioner would point out that every offence shall ordinarily be enquired into and tried by a court within whose local jurisdiction it was committed. The offence, according to him, was committed at Thodupuzha where the bank to which the cheque was issued is located and that is the place where the cause of action of “failure to make payment of the money” had arisen. Counsel cited the decision of this Court in M.N Adhikari v. Food Inspector, Kunnamkulam Municipality (1965 K.L.T 548) where it was held that a Magistrate within whose jurisdiction an offence is committed is authorised under the Code to take cognizance of and to try the accused and that a Magistrate has no power to try an accused for an offence committed wholly outside the limits of his jurisdiction. It was observed that before a person can be tried and convicted it is for the prosecution to establish that the court which takes cognizance of and tries him has territorial jurisdiction. As observed earlier Section 142 of the Act speaks of cause of action which arises under clause (c) of the proviso to Section 138 on the drawer of such cheque failing to make the payment of the money to the payee. The question arises from where such failure has taken place. The offence is committed at that place and the court within whose jurisdiction that place falls has jurisdiction to try the offence.

20. In order to ascertain the place from where such failure to make the payment has taken place one has to look into the allegations in the complaint. The Allahabad High Court in the decision in Raghunandan Prasad v. King Emperor (AIR 1925 Allahabad 290) observed that the jurisdiction of the court to hear a case depends on the allegations with which its help is sought. It was held that unless it has been found at the very outset that the allegations are exaggerated with the intention of seeking a particular Court for redress, the statement of the complainant has to be accepted for the purposes of jurisdiction. The same is the view expressed in Sanatan Daw v. Dasarathi Tah (AIR 1959 Calcutta 677). It was observed that when evidence is led up to the time of framing of the charge indicating that the Magistrate had jurisdiction the trial has to proceed. The mere fact that such evidence could not be tested by cross-examination after charge by reason of the death of the witness would not take away the jurisdiction of the Magistrate.

21. The Supreme Court in State Of Madhya Pradesh v. Shri K.P Ghiara (AIR 1957 SC 196) held that the venue of enquiry or trial of a case is primarily to be determined by the averments contained in the complaint or charge sheet and unless the facts there are positively disproved, ordinarily the court, where the charge sheet or complaint is filed has to proceed with it, except where action has to be taken under S. 202 of the Criminal Procedure Code. In that case it was uncertain whether the offence of embezzlement was committed at Bombay or Nagpur. The Supreme Court held that the Court at Nagpur had jurisdiction to enquire into the offence.

22. 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. In the present case the complaint contains a specific averment that the amount was agreed to be returned at the place of residence of the complainant at Pullissiri within the jurisdiction of the Mannarkkad Court. Revision petitioner is alleged to have gone to that house on 24-3-1991 and represented that he would be getting the requisite money on the next day, issued a cheque for Rs. 7,500/- and handed over the same to the complainant. First respondent was told that he could present the cheque on 25-3-1991. On that day itself the cheque was presented to the Mannarkkad Branch of State Bank of Travancore but the same was Teturned for the reason that there was no sufficient fund in the account. On the basis of the averment in the complaint the cause of action viz. the failure to make the payment had arisen by the delivery of the cheque which took place within the jurisdiction of the Mannarkkad Court. The court below was therefore right in finding that it has jurisdiction to try the case.

23. In the result the revision is dismissed.