Jurisdiction for trial for dishonour of cheque

The Negotiable Instruments (Amendment) Act 2015

The Above Amendment Act came in to force with retrospective effect. According to the notification published in the official Gazette dated 26.12.2015 the Amendment shall be deemed to have come into force on the 15th day of June, 2015. Rajya Sabha passed the Negotiable Instrument (Amendment) Bill 2015 on 7th December 2015 . Lok Sabha had passed the Bill in August 2015. The Act will replace Negotiable Instrument (Amendment) ordinance which was re-promulgated on 25th September 2015. The amendment makes changes in provisions relating to the territorial jurisdiction for filing Cheque dishonour Cases in the Negotiable Instrument Act.

Effect of Amendment Act of 2015

As per the Amendment 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.

Background of Amendment Act of 2015

It was in Dashrath Rupsingh Rathod vs. State of Maharashtra a three Judge Bench of the Supreme Court held that a Complaint of Dishonour of Cheque can be filed only to the Court within whose local jurisdiction the offence was committed, which in the that context was where the cheque is dishonored by the bank on which it is drawn. The Court clarified that the Complainant is statutorily bound to comply with Section 177 etc. of the Cr.P.C. and therefore the place or situs where the Section 138 Complaint is to be filed is not of his choosing. Thus Supreme Court in Dashrath Rupsingh Rathod vs. State of Maharashtra had overruled the two Judge Bench Judgment in K. Bhaskaran v. Sankaran Vaidhyan Balan (1999) 7 SCC 510 wherein it was held as under:

“In this context a reference to Section 178(d) of the Code is useful. It is extracted below :

“Where the offence consists of several acts done in different local areas, it may be inquired into or tried by a Court having jurisdiction over any of such local areas.”

Thus it is clear, if the five different acts were done in five different localities any one of the courts exercising jurisdiction in one of the five local areas can become the place of trial for the offence under Section 138 of the Act. In other words, the complainant can choose any one of those courts having jurisdiction over any one of the local areas within the territorial limits of which any one of those five acts was done. As the amplitude stands so widened and so expansive it is an idle exercise to raise jurisdictional question regarding the offence under Section 138 of the Act.”

The Amendment Act of 2015, thus take away the ambiguity and clearly lays down the principle of determination of place where the court shall have jurisdiction to try for this offence.


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