Section 138 NI Act: Jurisdiction if FIR Lodged in Different State but Bank Account Attached Elsewhere

In the world of bounced cheques and financial disputes, one common headache for litigants is figuring out where to file a case under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). Imagine this scenario: You receive a cheque that bounces, you lodge an FIR in State A for convenience, but the drawer's bank account is in State B, and the cheque was dishonoured there. Does the FIR location dictate jurisdiction, or does the bank matter more? This question—Territorial Jurisdiction in Case FIR is Lodged in Different State but Bank Account Attached in Different State—arises frequently and can lead to case dismissals, transfers, or endless delays.

This blog post breaks down the legal principles, Supreme Court rulings, legislative amendments, and practical insights to help you navigate this maze. Remember, this is general information based on judicial precedents and not specific legal advice—consult a lawyer for your case.

Main Legal Finding on Jurisdiction

The territorial jurisdiction for filing a criminal complaint under Section 138 NI Act is primarily determined by the location where the cheque is dishonoured by the bank on which it is drawn. Lodging an FIR in a different state does not automatically confer jurisdiction unless the offence is also deemed to have occurred there, typically where the cheque was dishonoured or the bank account is maintained. 2025 0 Supreme(SC) 460

Key legislative changes reinforce this: The Negotiable Instruments (Amendment) Ordinance, 2015, and subsequent Bill clarify that jurisdiction lies with the court where the bank branch dishonoured the cheque or where the drawer's account is maintained. This aims to curb forum shopping—filing cases in distant courts to harass the accused.

Mahendra Kumar Kedarnath Modi VS State of Gujarat - Dishonour Of Cheque (2017)

Key Points to Remember

• FIR Location Alone Insufficient: Simply lodging an FIR in a different state does not establish jurisdiction.

  Mahendra Kumar Kedarnath Modi VS State of Gujarat - Dishonour Of Cheque (2017)

• Primary Jurisdictional Hooks: Where the cheque is dishonoured (drawee bank) or where the drawer's bank account is maintained. 2025 0 Supreme(SC) 460

  Mahendra Kumar Kedarnath Modi VS State of Gujarat - Dishonour Of Cheque (2017)

  2017 0 Supreme(Guj) 1807
• Post-Amendment Clarity: Offences are localized at the dishonour place, not where notices are sent or FIR lodged. 2025 0 Supreme(SC) 460
• Payee's Bank Secondary: If the payee presents the cheque through their account, jurisdiction may extend to that bank, but the drawer's bank remains pivotal. 2024 0 Supreme(P&H) 628

Detailed Legal Analysis

Core Principles from Judiciary and Statutes

Courts have consistently held that the place, situs or venue of judicial inquiry and trial must logically be restricted to where the drawee bank is located, i.e., where the cheque is dishonoured upon presentation and not where the complainant’s bank is situated.2025 0 Supreme(SC) 460

For example, in cases where the cheque is delivered for collection through an account, jurisdiction vests in the court where the payee's or holder's bank (for collection) or the drawer's bank branch is situated. In one ruling: Since the complainant's bank is situated at Panchkula and the cheque was dishonoured at Panchkula, therefore, the Court at Panchkula has the territorial jurisdiction.2024 0 Supreme(P&H) 628

The Supreme Court in Yogesh Upadhaya (Supra) and others reiterated: The offence is localized at the place of dishonour, overriding FIR lodging spots. 2025 0 Supreme(SC) 460

Mahendra Kumar Kedarnath Modi VS State of Gujarat - Dishonour Of Cheque (2017)

Impact of FIR in a Different State

Lodging an FIR elsewhere, without ties to the dishonour or account location, typically fails to confer jurisdiction. Lodging an FIR in a different state, without the offence having occurred there (i.e., cheque dishonour or bank account maintained there), does not automatically confer jurisdiction.2025 0 Supreme(SC) 460

This mirrors broader criminal law: FIRs can be lodged anywhere (even zero FIRs), but trial jurisdiction follows the offence's occurrence under CrPC Sections 177-181. In a cheque case, that's the dishonour site. For instance, in Dr. Brojen Gogol, jurisdiction hinged on where the bank dishonoured the cheque. 2000 6 Supreme 114

Other precedents echo this. In a Panchkula matter, the court restored a complaint because the cheque was presented and dishonoured there, and the legal notice was sent from Panchkula, aligning with K. Bhaskaran v. Sankaran Vaidhyan Balan. 2024 0 Supreme(P&H) 628

Judicial Decisions and Nuances

• Supreme Court Stance: Emphasizes preventing harassment via forum shopping. Transfers may occur for convenience, especially if parties' socio-economic status differs, as in a case shifting proceedings from Chandigarh to Hyderabad for small borrowers against a bank. 2025 0 Supreme(SC) 2003
• Cause of Action Test: Jurisdiction where any act constituting the offence occurred, but post-2015, it's narrowed to dishonour/account site. 2024 0 Supreme(P&H) 628
• Exceptions in Practice: In some cases, like where entrustment or cheque issuance forms part of cause of action, courts assess holistically—but NI Act prioritizes bank location. 2018 0 Supreme(Gau) 1419

In 2014 Supreme(Online)(Chh) 117, a trial court dismissed for lack of jurisdiction as cause arose outside its territory, despite cheque return info reaching elsewhere. 2014 Supreme(Online)(Chh) 117

Exceptions and Limitations

While the rule is clear, exceptions may arise:- Payee Presentation: If cheque presented for collection via payee's account, that court's jurisdiction may apply. 2024 0 Supreme(P&H) 628- Transfers for Justice: Courts can transfer under Section 406 CrPC for convenience, balancing parties' positions. 2025 0 Supreme(SC) 2003- Zero FIRs: Allowed, but investigation transfers to proper jurisdiction; doesn't alter trial court. 2023 0 Supreme(Jhk) 29

However, documents stress the general rule: Stick to dishonour or account location to avoid dismissals. 2016 0 Supreme(Bom) 610

Practical Recommendations

To sidestep pitfalls:1. Verify Bank Locations: Confirm dishonour branch and drawer's account before filing.2. File Correctly: Lodge complaint in the jurisdictional court—FIR elsewhere won't help.3. Avoid Forum Shopping: Risk dismissal or transfer, wasting time/money.4. Legal Notice Caution: Send from anywhere, but it doesn't shift jurisdiction post-amendments.5. Seek Transfers if Needed: For genuine hardship, petition higher courts. 2025 0 Supreme(SC) 2003

Conclusion and Key Takeaways

Under Section 138 NI Act, territorial jurisdiction pivots on cheque dishonour or drawer's bank account location, not FIR filing state. Amendments and rulings like Yogesh Upadhaya localize offences to prevent abuse. 2025 0 Supreme(SC) 460

Mahendra Kumar Kedarnath Modi VS State of Gujarat - Dishonour Of Cheque (2017)

Key Takeaways:- Prioritize drawee bank over FIR spot.- Use 2015 amendments to guide filings.- Consult professionals to check jurisdiction early.

This framework promotes fair trials and efficiency. For tailored advice, reach out to a legal expert familiar with your facts.

References:1. 2025 0 Supreme(SC) 460: Jurisdiction at dishonour place.2.

Mahendra Kumar Kedarnath Modi VS State of Gujarat - Dishonour Of Cheque (2017)