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Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Jurisdiction Under Section 142(2) of NI Act - The court's territorial jurisdiction to try offences under Section 138 depends on where the cheque was presented for collection or where the bank branch maintaining the payee's account is located. Specifically, if the cheque was delivered for collection through an account, the jurisdiction lies with the court where the bank branch of the payee or holder in due course is situated. This is supported by multiple sources, including Section 142(2)(a) and various case law ["2023 0 Supreme(Ker) 538"], ["2024 0 Supreme(All) 873"], ["2025 0 Supreme(Ori) 202"], ["2023 0 Supreme(Raj) 2263"], ["2025 6 Supreme 281"].
Delivery for Collection & Bank Branch Location - When a cheque is deposited or delivered for collection at a specific bank branch, the jurisdiction is deemed to be that of the branch where the payee maintains the account. The Explanation to Section 142 clarifies that the cheque is considered delivered to that branch, establishing jurisdiction accordingly ["2023 0 Supreme(Ker) 538"], ["2025 0 Supreme(Ori) 202"], ["2023 0 Supreme(Raj) 2263"], ["2025 6 Supreme 281"].
Case Law & Judicial Interpretations - Courts have consistently held that the proper jurisdiction is where the cheque was presented or where the bank branch involved in the collection process is located. For example, if the cheque was deposited at a branch outside the court's jurisdiction, the complaint must be filed before the correct court ["2023 0 Supreme(Ker) 538"], ["2025 0 Supreme(Ori) 202"], ["2023 0 Supreme(Raj) 2263"].
Exceptions & Transfers - Transfers or cases pending in another court do not automatically confer jurisdiction; the initial presentation location and the bank branch's location are decisive. Transfer orders are not routine and require proper grounds ["2025 0 Supreme(Ori) 202"].
Impact of Amendments & Clarifications - Amendments to Section 142 and judicial clarifications emphasize that jurisdiction is strictly linked to the location of the bank branch where the cheque was delivered for collection, preventing courts from assuming jurisdiction based solely on other factors ["2023 0 Supreme(Ker) 538"], ["2025 6 Supreme 281"].
The dominant consensus across the sources indicates that a court's jurisdiction under Section 138 of the Negotiable Instruments Act is primarily determined by the location of the bank branch where the cheque was presented for collection or where the payee maintains their account. Courts have consistently emphasized that if the cheque was delivered for collection through a specific branch, the trial must be conducted within that jurisdiction. Therefore, a court outside this jurisdiction generally lacks the authority to try such cases unless the cheque was presented or the account maintained within its territorial limits ["2023 0 Supreme(Ker) 538"], ["2024 0 Supreme(All) 873"], ["2025 0 Supreme(Ori) 202"], ["2023 0 Supreme(Raj) 2263"], ["2025 6 Supreme 281"].
In summary, the court under the jurisdiction of the collection bank has jurisdiction only if the cheque was presented for collection at or through the bank branch where the payee or holder in due course maintains their account.
In the world of business transactions, cheques remain a staple for payments, but when they bounce, the fallout under (NI Act) can lead to . A common confusion arises: Whether Court under the Jurisdiction of has Jurisdiction under Section 138? This question often trips up complainants and accused alike, especially when cheques are presented at a distant branch.
This blog post breaks down the legal position, drawing from precedents and . We'll explore why jurisdiction typically lies with the , exceptions involving collection banks, and practical tips. Note: This is general information based on judicial interpretations and not specific legal advice. Consult a lawyer for your case.
The foundational rule is clear: jurisdiction under Section 138 is primarily determined by the place where the cheque was dishonoured, which is the location of the (the bank on which the cheque is drawn), not merely where it was presented for collection. 2025 0 Supreme(SC) 460
As held by the , the offence under Section 138 is committed where the cheque is dishonoured, i.e., where the returns the cheque unpaid. 2025 0 Supreme(SC) 460 The expression 'the bank' in the proviso to Section 138 refers specifically to the , not the . 2025 0 Supreme(SC) 460
Ramaswamy S. Iyengar VS State (Nct of Delhi) - Delhi (2011)
In Dashrath Rupsingh Rathod (2014), the emphasized that the place where the cheque is dishonoured (the ) is the relevant jurisdiction, not where the cheque was presented for collection. 2025 0 Supreme(SC) 460 Mere presentation at a in another jurisdiction does not confer trial rights there unless dishonour occurred at that branch.
Ramaswamy S. Iyengar VS State (Nct of Delhi) - Delhi (2011)
Ramaswamy S. Iyengar VS State (Nct of Delhi) - Delhi (2011)
Earlier cases like Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd. (2001) AIR 2001 SC 1161 clarified that 'the bank' means the where the cheque is drawn, and the offence is complete at the point where the cheque is dishonoured.
Ramaswamy S. Iyengar VS State (Nct of Delhi) - Delhi (2011)
Pre-Dashrath (2014), some leaned towards payee's bank jurisdiction, citing K. Bhaskaran v. Sankaran Vaidhyan Balan (AIR 1999 SC 3762), where multiple acts (drawing, presentation, etc.) could confer jurisdiction in any of five locations. 2014 0 Supreme(Bom) 475 2014 0 Supreme(Del) 959
However, Dashrath narrowed it to the to curb abuse, overruling broader interpretations. 2025 0 Supreme(SC) 460 Post-Dashrath, cases reaffirmed: Mere issuance or presentation of the cheque at a in a different jurisdiction does not create jurisdiction.
Ramaswamy S. Iyengar VS State (Nct of Delhi) - Delhi (2011)
The introduced Section 142(2), providing:
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 maintains an account... 2023 0 Supreme(Ker) 734
This shifted dynamics. Now, jurisdiction may lie with:- The court where the payee maintains their account and the cheque was delivered for collection through that branch. 2023 0 Supreme(Ker) 734 2023 0 Supreme(Kar) 424- Or the location.
For instance, in one case, even if presented at a different branch of the same bank (e.g., Tripunithura vs. Ambalamedu), the explanation to Section 142(2) deems the payee's account branch as the jurisdictional point. 2023 0 Supreme(Ker) 734
Another ruling held: Jurisdiction for initiating proceedings... lies in the of the court where the cheque is delivered for collection. If the cheque is delivered through an account, the offence can be tried by the court within whose jurisdiction the branch of the bank where the payee maintains the account is situated. 2023 0 Supreme(Kar) 424
Yet, consistency prevails: alone doesn't suffice unless it's the payee's account branch and linked to dishonour/delivery. 2023 0 Supreme(Mad) 3179 In Nishant Aggarwal v. Kailash Kumar Sharma (2013), the Court queried: Whether the Court, where a cheque is deposited for collection, would have ... or would it be only the Court... over the ? Affirming payee's presentation bank in some contexts. 2014 0 Supreme(Bom) 475 2014 0 Supreme(Raj) 507
Post-amendment cases like 2025 0 Supreme(J&K) 187 state: Jurisdiction... is determined by the location of the bank where the cheque is presented for collection. But this aligns only if it's the payee's branch under 142(2)(a). 2025 0 Supreme(J&K) 187
In 2025 Supreme(Online)(Guj) 12702, deposit at Axis Bank, Mahuva Branch under Cash Management System gave jurisdiction.
Ramaswamy S. Iyengar VS State (Nct of Delhi) - Delhi (2011)
Example: Complaint returned for proper court if presented at non-jurisdictional branch. 2023 0 Supreme(Ker) 734 Or quashed if accused not signatory and wrong forum. 2023 0 Supreme(Kar) 424
| Aspect | Jurisdiction Lies Where ||--------|-------------------------|| Primary | (dishonour place) 2025 0 Supreme(SC) 460 || Exception | Payee's account branch (142(2)(a)) 2023 0 Supreme(Ker) 734 || Not Sufficient | Mere presentation
Ramaswamy S. Iyengar VS State (Nct of Delhi) - Delhi (2011)
|In conclusion, the court under the jurisdiction of the does not have jurisdiction under Section 138 solely based on presentation there, unless tied to dishonour or payee's account branch. Focus on drawee location to ensure validity. Stay updated on amendments, as law evolves to balance convenience and prevent abuse.
References include and High Court judgments like 2025 0 Supreme(SC) 460,
,
Ramaswamy S. Iyengar VS State (Nct of Delhi) - Delhi (2011)
, and others noted inline. For tailored advice, reach out to a legal expert. #Section138 #ChequeBounce #NIACTJurisdiction
Now, the question to be considered herein is; when the payee or holder in due course presents a cheque through an account maintained by the payee or holder in due course in a bank within the jurisdiction of a court, whether the court, where the cheque was presented for collection, has jurisdiction to ... Section 142(2): The offence under section 138 s....
or the case has been transferred to that Court under sub-section (1) and such complaint is pending in that Court, all subsequent complaints arising out of section 138 against the same drawer shall be filed before the same Court irrespective of whether those cheques were delivered for collection or presented ... As per Section 142 sub-section (2), an offence under Section 138#HL....
Cognizance of offences: xxx xxx xxx xxx xxx (2) 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 ... It is seen that the cheque was presented for collection through State Bank of India, Tripunithura Branch which is not within the jurisdiction of this....
The other point is whether the trial Court has assumed territorial jurisdiction, which is not vested on it. ... (e)Complaint under Section 138 NI Act presented on 8th June 2022 before the Metropolitan Magistrate(Fast Tack Court-1) Egmore mentioning the complainant bank falls within the police limit of G-3, Kilpauk Police Station which is well within the jurisdict....
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 ... Act that, when a cheque is delivered for collection to the payee’s bank account, the relevant jurisdic....
The complaint was transferred on the ground that complainant’s house was situated within the territorial jurisdiction of Court of Sarkaghat and he maintains his bank account under the territorial jurisdiction of the Sarkaghat Court. ... (iii) Section 142 of the Act was amended by insertion of following sub-section 2: “The offence under Section 138 shall be inquired into and tried only b....
Section 142 (2) provides that; “(2) 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 ... The contention of counsel for the petitioner is that with reference to an offence under section 138 of Negotiable Instruments Act, the place where a cheque is delivered for....
Act vests jurisdiction apropos an offence under Section 138 thereof in the Court where the cheque is delivered for collection, that is, through an account in the Branch of the Bank where the payee maintains that account. 8. ... Act makes it clear that an offence under Section 138 thereof should be inquired into and tried only by a Court within whose local juri....
As the cheque in question was deposited at Axis Bank, Mahuva Branch under the Cash Management System, jurisdiction lies solely with the Mahuva Court. Hence, Mr. ... Since the cheque was delivered to Axis Bank, Mahuva Branch and subsequently returned dishonoured due to “Account Closed,” the Court at Mahuva clearly has territorial jurisdiction. 10. ... He points out that the Explanation to....
cheque is delivered for collection (through an account of the branch of the bank where the payee or holder in due course maintains an account). ... Act specifies that the offence under Section 138 of N.I. Act can be tried by the Court within whose jurisdiction the branch of the bank where payee maintains the account is situated, if the cheque is delivered through an account. 7. ... We ar....
Jurisdiction for offences under Section 138 of the Negotiable Instruments Act is determined by the location of the bank where the cheque is presented for collection. 1. The petitioner through the medium of present petition has challenged the complaint filed by the respondent against him and his proprietary concern alleging commission of offence under section 138 Negotiable Instruments Act read with section 420 RPC. Challenge has also been thrown to order dated 24.07.2021 pass....
The relevant portion of the said judgment is reproduced hereunder: “2. Mr. Ahmadi, learned senior counsel for the Appellant in support of his claim that the Court at Bhiwani has no jurisdiction heavily relied on the decision of this Court in Shri Ishar Alloy Steels Ltd. The question which has to be decided in this appeal is whether the Court, where a cheque is deposited for collection, would have territorial jurisdiction to try the accused for an offence punishable under Section 138 ....
In the case reported as 2013 AIR SCW 4322 [Nishant Aggarwal Vs. Kailash Kumar Sharma], the following question was considered by the Hon'ble Apex Court. Landmark case reported as AIR 1999 SUPREME COURT 3762 (1) [K. "Whether the Court, where a cheque is deposited for collection, would have territorial jurisdiction to try the accused for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (in short "the N.I. Act") or would it be only the Court exercising terr....
The question which has to be decided in this appeal is whether the Court, where a cheque is deposited for collection, would have territorial jurisdiction to try the accused for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (in short "the N.I. Act") or would it be only the Court exercising territorial jurisdiction over the drawee bank or the bank on which the cheque is drawn?"
In Nishani Aggarwal’s case (supra) the Apex Court reaffirmed the jurisdiction of the Court where the cheque is presented for collection, in this case it was observed as under: “... The question which has to be decided in this appeal is whether the Court, where a cheque is deposited for collection, would have territorial jurisdiction to try the accused for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (in short “the N.I. Act”) or would it be only the ....
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