Breaking; Supreme Court dismisses SLP against Bombay HC’s ‘AT-PAR CHEQUE' Judgment

A two Judge Bench of the Supreme Court today dismissed  the Special Leave Petition as withdrawn, filed against the Bombay High Court Judgment which held that dis-honour of “AT PAR” Cheque cases can be filed to the Court within whose local jurisdiction the nearest available branch of bank of the drawer situated explaining the Apex Court  Judgment in Dashrath Rupsingh Rathod vs. State of Maharashtra. Earlier Supreme Court had stayed the Bombay High Court Judgment. It was in Ramanbhai Mathurbhai Patel  vs State of Maharashtra,  Justice M.L.Tahalyani explained the dictum in Dashrath vs. State of Maharashtra in which a three Judge Bench of the Supreme Court held that dis-honour of Cheque cases can be filed only to the Court within whose local jurisdiction, the offence was Committed; ie, where the cheque is dishonoured by the bank on which it is drawn.

The Bombay High Court distinguished the application of the Supreme Court Judgement as follows;

 “In the present case, the drawer had accounts at Gandhi Nagar branches of the two banks mentioned herein above and cheques have been dishonoured by the branches of the said two banks situated within the jurisdiction of Metropolitan Magistrate, Kurla. The question which arises for determination is as to whether the payee has to file complaint in the Court of Magistrate having jurisdiction over Gandhi Nagar branches or the branches which have dishonoured cheques. In this regard, one may refer to the judgment of Hon’ble Supreme Court in the matter of Dashrath v. State of Maharashtra cited (supra). While summing up the judgment, the Hon’ble Supreme Court has said at para 31 as under:

“31.  To sum up:

(i)            ……….

(ii)           ……….

(iii)          ……….

(iv)         ……….

(v)          ……….

(vi) Once the cause of action accrues to the complainant, the jurisdiction of the Court to try the case will be determined by reference to the place where the cheque is dishonoured.

(vii) The general rule stipulated under Section 177 of Cr.P.C. applies to cases under Section 138 of the Negotiable Instruments Act. Prosecution in such cases can, therefore, be launched against the drawer of the cheque only before the Court within whose jurisdiction the dishonour takes place except in situations where the offence of dishonour of the cheque punishable under Section 138 is committed along with other offences in a single transaction within the meaning of Section 220(1) read with Section 184 of the Code of Criminal Procedure or is covered by the provisions of Section 182(1) read with Sections 184 and 220 thereof.”

“One may also refer to para 17 of the said judgment where the Hon’ble supreme Court has said as under:

“17. ….. In our discernment, it is also now manifest that traders and businessmen have become reckless and incautious in extending credit where they would heretofore have been extremely hesitant, solely because of the availability of redress by way of criminal proceedings. It is always open to the creditor to insist that the cheques in question be made payable at a place of the creditor’s convenience (emphasis supplied)”.

It is thus clear that in the present case by issuing cheques payable at all branches, the drawer of the cheques had given an option to the banker of payee to get the cheques cleared from the nearest available branch of bank of the drawer. It, therefore, follows that the cheques have been dishonoured within the territorial jurisdiction of Court of Metropolitan Magistrate at Kurla. In view of judgment of Hon’ble Supreme Court in the matter of Dashrath v. State of Maharashtra, the learned Metropolitan Magistrate of Kurla Court has jurisdiction to entertain and decide the complaint in question”.

Read the Order here.