K. Bhaskaran v Sankaran Vaidhyan Balan

• The parties were brothers. The respondent issued a cheque for Rs 1,00,000 to the appellant.
• The cheque was presented at Syndicate Bank, Kayamkulam, and was dishonoured on 29 January 1993.
• The appellant sent a notice of demand on 2 February 1993. It was returned "unclaimed" on 15 February 1993.
• The complaint was filed on 4 March 1993 before the Judicial Magistrate of the First Class, Adoor. The Magistrate acquitted the accused, holding that he lacked territorial jurisdiction and that notice had not been served.
• The Kerala High Court reversed the acquittal and convicted the accused, sentencing him to six months' imprisonment and a fine of Rs 1,00,000.

1. Which court has territorial jurisdiction to try a S.138 NI Act offence?
2. Is a notice returned "unclaimed" a valid notice for S.138?

• The S.138 offence is completed by five components: (a) drawing of the cheque, (b) presentation of the cheque to the bank, (c) return of the cheque unpaid by the drawee bank, (d) giving notice in writing to the drawer demanding payment, and (e) failure of the drawer to pay within 15 days of receipt of the notice.
• The five acts need not occur in one place. Under ss.178 and 179 CrPC 1973, a court within whose jurisdiction any one of them took place can try the case.
• A notice sent by registered post to the correct address and returned "unclaimed" can be deemed to have been served, unless the drawer shows otherwise. The drawer cannot defeat the provision by refusing or avoiding the notice.
• The conviction was upheld. The sentence was set aside because the fine exceeded the limit on a Magistrate's power to fine under s.29(2) CrPC; the Court pointed to compensation under s.357(3) CrPC and sent the case back for fresh sentencing.

A S.138 offence can be tried by any court within whose jurisdiction any of its five components occurred, and a notice returned unclaimed can be treated as served.