Territorial jurisdiction – Cheque dishonoured by Chandigarh Bank – Complainant residing at Delhi – Notice demanding payment issued to accused from Delhi – Chandigarh court will have the jurisdiction and not Delhi Court.

In the case of Harman Electronics (P) Ltd. v. National Panasonic India Ltd., the Supreme Court of India examined the issue of territorial jurisdiction regarding a dishonored check. Here’s a summary of the key points:

  • The case involved a dispute where a company, Harman Electronics, based in Chandigarh, issued a check that was dishonored by a Chandigarh bank.
  • The complainant, National Panasonic India Ltd., was based in Delhi and sent a notice demanding payment to the accused in Chandigarh.
  • The question was whether the Delhi Court or Chandigarh Court had jurisdiction over the case.
  • The Supreme Court ruled that since the entire business transaction, including the issuance and dishonor of the check, took place in Chandigarh, the Chandigarh Court had jurisdiction.
  • Sending the notice from Delhi did not confer jurisdiction to the Delhi Court.
  • The Court emphasized that for an offense under Section 138 of the Negotiable Instruments Act to be established, the notice must be received by the accused, and the communication of the notice is essential.
  • The Court also referred to previous decisions and legal principles to support its ruling.

As a result, the case was transferred to the Court of the District and Sessions Judge in Chandigarh for further proceedings.