Union Of India & Anr V.

Tulsiram Patel & Ors

(1985)
Jurisdiction – In the Supreme
Court of India
Bench- Constitutional Bench
Date of Decision- 11th July, 1985
Citation- 1985 AIR 1416
 FACTS
The Agreement
JCE Consultancy was a company having registered office at Delhi. S was a
foreign company in a foreign country. Samsung, Dubaiwas a company
registered in Dubai. It was a wholly owned subsidiary of the Samsung
Corporation. S as a buyer entered entered into an agreement with J as a seller
to supply at a certain price, certain goods produced in India. The agreement
stipulated that the product would be further transferred by the buyer S to
Samsung Dubai. The buyer S would receive from Samsung Dubai a bill of
exchange for the value specified and would endorse the same to the seller J
as consideration for sale of the product, and J would in turn to pay the buyer
a certain amount as commission; the seller would then become holder in due
course of the bill of exchange with all rights as per the Negotiable
Instruments Act, 1881 to claim the value directly form Samsung, Dubai.
Alternatively, the buyer would transfer the seller the sum specified (which
was less than the bill of exchange) to the seller’s bank account. That the
agreement was governed by Indian laws.
The Situation
• J supplied goods from Ghaziabad. The parties implemented the agreement
and S endorsed to J the bill of exchange executed by Samsung, Dubai in
favour of S. It was received by J at Ghaziabad. However, despite repeated
demands made by J, payment was made there against by Samsung, Dubai.
In reply to a legal notice sent by J, Samsung D denied its liability in that
regard on the ground that payment had already been made to S.

• J then filed a criminal complaint before the Magistrate at Ghaziabad in

India against Samsung, Dubai and their officers. The complaint stated that
J was the real holder of the bill of exchange and the payment could not be
made to anyone else; and that by refusing payment to J, the accused
persons had committed offence punishable under IPC.
The Appeal

Based on the said complaint, the statement of the proprietor J and

supporting documents, the Magistrate passed an order summoning the
accused persons under Sections 403, 405, 420, 423 r/w sections 120-B and
34. The appellant approached the Supreme Court by a special leave petition
to quash the proceeding on the ground that the Ghaziabad Court did not
have jurisdiction to entertain the case.
 RULES
CONSTITUTIONAL LAW:
• Article 136: Special Leave Petition

INDIAN PENAL CODE,1860

• Section 403: Dishonest misappropriation of property.
• Section 418: Cheating with knowledge that wrongful loss may
ensue to person whose interest offender is bound to protect.
• Section 420: Cheating and dishonestly inducing delivery of
property
• Section 423: Dishonest or fraudulent execution of deed of transfer
containing false statement of consideration.
• Section 120-B: Criminal Conspiracy.
 THE MAIN ISSUE
Whether the application filed for quashing the proceedings before the
Ghaziabad Court as well as staying the operation and effect of the
orders passed by AJD, Ghaziabad where summons and non bailable
warrants have been passed against the respondent who is a foreign
national and has been summoned under Sections 403, 305, 418, 420,
423, 120-B and 34 IPC on the ground that the Court doesn’t have
jurisdiction to entertain the proceedings.
 WHY ACCORDING TO THE APPELLANT,
THE COURT DID NOT HAVE
JURISDICTION?

None of the appellants was an Indian citizen, nor have

resided in India, either before, or after the execution of the
agreement, nor during its implementation, nor had they
committed any act within the territorial jurisdiction of
India.
 FACTORS INVOLVED IN
DECIDING THE JURISDICTION.
• The place where the agreement was executed
• The places where different constituents of the agreement
were carried out
• The place where the consequence of the criminal action
ensues
• Place of receipt and dispatch of communications
exchanged by the rival parties
• The aforesaid relevance becomes apparent from Sections
178, 179, 181 and 182 of the Code of Criminal
Procedure.
 CRPC PROVISIONS- SECTION
179.
Offence triable where act is done or
consequence ensues.
"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 inquired into or tried by a court within
whose local jurisdiction such thing has been
done or such consequence has ensued.”
 EXPLANATION.
• The fact that Samsung, Dubai supplied the goods through Sky Impex Ltd., is
sought to be established not only through a delivery receipt, but also, on the basis
of the bill of exchange executed by Samsung, Dubai (the ultimate beneficiary)
constituting the payment for the goods purchased. The factum of supply of goods
from Ghaziabad (in India) to Dubai (in the United Arab Emirates), as an essential
component of the offence allegedly committed by the accused, is relatable to the
words “anything which has been done” used in Section 179 aforesaid. This
factual position, is sufficient to vest jurisdiction under Section 179 of the Code
of Criminal Procedure with a competent court at Ghaziabad.
• Even the place wherein the consequence of the criminal act “ensues”, would be
relevant to determine the court of competent jurisdiction. Therefore, even the
courts within whose local jurisdiction the effect of the criminal act occurs would
have jurisdiction in the matter. Since the appellant is allegedly holding the bill of
exchange at Ghaziabad in India, it is inferred that the consequence emerging out
of the said denial of encashment of bill of exchange would be deemed to “ensue”
in Ghaziabad, India.
The Supreme Court had held in the case of K. Satwant Singh v. State of
Punjab(1960 SCR (2) 89), that where the act of misrepresentation by
the accused was done at one place and consequent delivery of property
took at another place, the accused could be tried for the offence of
cheating by Court at either of these two places.

SECTION 181- Place of trial in case of certain offences

(4) Any offence of criminal misappropriation or of criminal breach of

trust may be inquired into or tried by a court within whose local
jurisdiction the offence was committed or any part of the property
which is the subject of the offence was received or retained, or was
required to be returned or accounted for, by the accused person.”
• An examination of the aforesaid provision leaves no room for
any doubt, that in offences of the nature as are subject-matter of
consideration in the present case, the court within whose local
jurisdiction, the whole or a part of the consideration “… were
required to be returned or accounted for.…” would have
jurisdiction in the matter.
• Since the bill of exchange issued by Samsung, Dubai, for US
$1,432,745 was received, and is allegedly being held by JCE
Consultancy at Ghaizabad in India, the aforesaid bill of
exchange, according to the appellant, has to be realised at the
place where it is held (i.e. at Ghaziabad, in India). In the instant
alleged factual background of the matter, the competent court at
Ghaziabad in India would have jurisdiction to hold the trial of the
complaint under Section 181(4) of the Code of Criminal
Procedure.
• SECTION 182 - Offences committed by letters, etc
Any offence which includes cheating may, if the deception is
practised by means of letters or telecommunication messages,
be inquired into or tried by any court within whose local
jurisdiction such letters or messages were sent or were received;
and any offence of cheating and dishonestly inducing delivery of
property may be inquired into or tried by a court within whose
local jurisdiction the property was delivered by the person
deceived or was received by the accused person.
(2) Any offence punishable under Section 494 or Section 495 of
the Penal Code (45 of 1860) may be inquired into or tried by a
court within whose local jurisdiction the offence was committed
or the offender last resided with his or her spouse by the first
marriage, or the wife by first marriage has taken up permanent
residence after the commission of offence.”
The allegations contained in the complaint reveal that the complainant JCE Consultancy
addressed a legal notice to Samsung, Dubai calling upon Samsung, Dubai to honour its
reciprocal commitment of the monetary payback contemplated under the agreement. In its
response, Samsung, Dubai denied liability by asserting that Samsung, Dubai had no
responsibility towards JCE Consultancy under the bill of exchange. The said denial
constitutes the basis of the criminal complaint filed against the accused. The place at which
the said response on behalf of Samsung, Dubai was received, would be relevant to
determine the court of competent jurisdiction under Section 182 of the Criminal Procedure
Code.

SECTION 178(d)
Even if the response was received by the counsel for JCE Consultancy in a place other than
Ghaziabad (though in India), still the competent court at Ghaziabad in India, would be
vested with jurisdiction, as under Section 178(d) of the Code of Criminal Procedure, in
cases where an offence consists of several acts carried out under different jurisdictions, a
court having jurisdiction where any one of such acts was committed will be competent to
try the same
 APPEAL DISMISSED AND
RIGHTLY SO
• Section 179 of the Code of Criminal Procedure vests jurisdiction for inquiry and trial
in a court, within whose jurisdiction anything has been done with reference to an
.
alleged crime, and also, where the consequence of the criminal action ensues.

• Section 181(4) of the Code of Criminal Procedure leaves no room for any doubt, that
culpability is relatable even to the place at which consideration is required to be
returned or accounted for.

• Finally, Section 182 of the Code of Criminal Procedure postulates that for offences of
which cheating is a component, if the alleged act of deception is shown to have been
committed through communications/letters/messages, the court within whose
jurisdiction the said communications/letters/messages were sent (or were received),
would be competent to inquire into and try the same. Thus viewed, it is not justified
for the appellants to contend that the allegations levelled by the complainant against
the appellant, are not relatable to territorial jurisdiction in India under the provisions
of the Code of Criminal Procedure.
 A FINAL CONCLUSION
.
• It is accordingly concluded that all components argued by the
appellant to prove that the Ghaziabad Court did not have the
jurisdiction to try the case because of their foreign nationality, their
residence outside India, and the fact that they were not present in
India at the time when the offences were allegedly committed are
of no consequence. Thus, the Court of Magistrate at Ghaziabad
could entertain the complaint filed against the appellants.
• The Special leave to appeal was accordingly set aside.