The Supreme Court has clarified the territorial jurisdiction for cheque dishonour cases under Section 138 of the Negotiable Instruments Act, 1881, after the 2015 amendment. The Court held that it is the court having jurisdiction over the branch of the bank where the payee maintains the account that alone can try the complaint when the cheque is delivered for collection through an account, in terms of Section 142(2)(a) NI Act. 5
The Bench emphasised that the amendment was specifically enacted to overcome the position laid down in Dashrath Rupsingh Rathod, and to eliminate jurisdictional confusion and hardship caused to payees by requiring complaints to be filed only where the drawee bank is located. The Explanation to Section 142(2)(a) was noted to create a legal fiction deeming delivery at the payee’s home branch, even if the cheque is presented at any other branch of the bank. 5
The Court also discussed the distinction between “delivery for collection through an account” and “presentment for payment otherwise through an account,” making it clear that jurisdiction is tied to the banking relationship between the payee/drawer and the specific branch where the account is maintained, not any branch chosen for presentation. 5
In the facts of the case, since the payee (HEG Ltd.) maintained its bank account at SBI Bhopal, the Judicial Magistrate First Class, Bhopal, had proper jurisdiction to try the case. Consequently, the petition seeking transfer of the complaint to the Metropolitan Magistrate, Kolkata, where proceedings had earlier commenced, was rejected. 5
Key Takeaways
- Jurisdiction in account-payee cheque dishonour cases lies only where the payee’s bank account is maintained.
- The place of delivery for collection — even if at a different branch — is deemed to be the home branch of the payee.
- The amended Section 142(2) restores payee-centric convenience in cheque dishonour prosecutions.
Case Title: Jai Balaji Industries Ltd. & Ors. vs. M/s HEG Ltd.
Citation: 2025 INSC 1362