[N.I Act]Court Within Whose Jurisdiction The Bank Branch Where The Payee Maintains The Account Is Situated, Can Try Cheque Bounce Complaint: SC [Read Order]

The court within whose jurisdiction the branch of the bank where the payee maintains the account is situated, will have jurisdiction to try the offence, if the cheque is delivered for collection through an account, noted the Supreme Court while dismissing a transfer petition.

In this case, Himalaya Self Farming Group had approached the Apex Court by filing a petition under Section 406 of CrPC contending that under the delivery challan, all disputes between the parties are made subject to the jurisdiction of courts in Siliguri; and that when the Group has its Head Office in Siliguri there was no reason to lodge the complaint at Agra except to harass it.

The court said that if the delivery challan which states that all disputes will be subject to the jurisdiction of courts in Siliguri, is construed by the petitioners to constitute a bar for the courts in any other jurisdiction to entertain the proceedings, it is always open to the petitioners to raise this point before the Agra Court. This cannot be a ground for seeking transfer, the court added.

Regarding the second ground, Justice V. Ramasubramanian said:

The fact that the respondent has its Head Office at Siliguri and that there is no reason why it chose to file a complaint in Agra except to harass the petitioners, cannot also be a ground for seeking transfer. Under Section 142(2)(a) of the Negotiable Instrument Act, the court within whose jurisdiction the branch of the bank where the payee maintains the account is situated, will have jurisdiction to try the offence, if the cheque is delivered for collection through an account. Therefore, all the grounds on which the petitioners seek transfer, are unsustainable.

In Dashrath Rupsingh Rathod vs. State of Maharashtra, a three Judge Bench of the Supreme Court held that a Complaint of Dis-honour of Cheque can be filed only to the Court within whose local jurisdiction the offence was committed, which in the present context is where the cheque is dishonoured by the bank on which it is drawn. 

Vide 2015 amendment to Negotiable Instruments Act, the above judicial dictum was nullified. Now the offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction,—(a) if the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated; or  (b) if the cheque is presented for payment by the payee or holder in due course, otherwise through an account, the branch of the drawee bank where the drawer maintains the account, is situated.

Case name: M/S HIMALAYA SELF FARMING GROUP vs. M/S GOYAL FEED SUPPLIERS

Case no.: Transfer Petition (Criminal) No.273 of 2020

Coram: JUSTICE V. RAMASUBRAMANIAN

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