A recent write-up claims that the Supreme Court has clarified that in cheque bounce cases, a complaint must be filed only in the court having jurisdiction over the bank that dishonoured the cheque. The article attributes this view to a Bench comprising Justice J. B. Pardiwala and Justice R. Mahadevan, stating that such complaints under the Negotiable Instruments Act, 1881 (Section 138) must be filed where the cheque was dishonoured.
However, this interpretation requires careful scrutiny. For public awareness, it is important to clarify the legal position.
1. The Legal Position on Jurisdiction – Not So Simple
Cheque bounce cases are governed by Section 138 of the Negotiable Instruments Act, 1881. The question of territorial jurisdiction in such cases has undergone significant judicial evolution over the years. At one stage, in Dashrath Rupsingh Rathod v. State of Maharashtra, the Supreme Court held that jurisdiction would lie only where the drawee bank (the bank of the drawer) is located — meaning the place where the cheque was dishonoured. However, Parliament subsequently intervened by amending the law through the Negotiable Instruments (Amendment) Act, 2015. Section 142(2) was inserted, which clearly provides:
• If the cheque is delivered for collection through an account, the complaint shall be filed in the court within whose jurisdiction the branch of the bank where the payee maintains the account is situated.
• If the cheque is presented otherwise than through an account, jurisdiction lies where the drawee bank is located.
This amendment was intended specifically to undo the hardship caused by the Dashrath judgment and to restore convenience to the payee/complainant.
2. Why the Above Statement May Be Misleading
The circulated content suggests that complaints must be filed only where the dishonoring bank is located. Such a blanket statement ignores:
• The 2015 statutory amendment.
• The legislative intent to protect payees.
• The current binding position under Section 142(2) of the NI Act.
Unless the Supreme Court has expressly overruled or reinterpreted the amended Section 142(2), the statutory provision continues to prevail. Therefore, presenting the matter as a universal rule that jurisdiction lies only at the place of dishonor is legally incomplete and potentially misleading.
3. Practical Legal Position (As Per Existing Statute)
In most cheque bounce cases today:
• If the cheque is deposited in the complainant’s bank account, jurisdiction lies where the complainant’s bank branch is located.
• The complainant is not compelled to travel to the drawer’s city merely because the drawer’s bank dishonoured the cheque.
This interpretation aligns with legislative intent and ensures access to justice.
4. Importance of Responsible Legal Reporting
Public dissemination of partial or inaccurate legal interpretations can create:
• Confusion among litigants
• Unnecessary anxiety for business owners
• Procedural mistakes in filing complaints
• Dismissal of cases for want of jurisdiction
Before relying on circulated legal messages, readers should:
• Verify the actual judgment text.
• Check whether statutory amendments have been considered.
• Consult a legal professional.
5. Conclusion
The law relating to cheque bounce jurisdiction is governed primarily by Section 142(2) of the Negotiable Instruments Act, 1881, as amended in 2015. Any interpretation that ignores this statutory amendment cannot be treated as the final legal position.
In matters of law, especially those affecting business and financial transactions, clarity must come from the statute and authoritative judgments — not from oversimplified summaries. Public awareness must be based on complete legal context, not partial reporting.
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