Supreme Court of India · 2014
Dashrath Rupsingh Rathod v. State of Maharashtra & Anr.
(2014) 9 SCC 129 · AIR 2014 SC 3519
Court
Supreme Court of India
Bench
T.S. Thakur, Vikramajit Sen & C. Nagappan, JJ.
Subject
NI Act 138 — Jurisdiction
Decided
1 August 2014
The Jurisdictional Problem
Prior to this judgment, there was considerable confusion about where a Section 138 NI Act cheque bounce complaint could be filed. The earliest and most often quoted decision, K. Bhaskaran v. Sankaran Vaidhyan Balan (1999) 7 SCC 510, treated the offence as a concatenation of five acts (drawing, presentation, dishonour, notice and non-payment) and permitted a complaint at any of the places where those acts occurred; later Supreme Court decisions had diluted that view, leaving what the Court described as “varying if not conflicting ratios”.
The concurring opinion of T.S. Thakur, J. records that complaints were often filed far from where the transaction took place, merely because notices were issued from, or cheques were deposited for collection in, a city of the complainant's choosing, causing “hardship, harassment and inconvenience to the accused persons”. A three-Judge Bench took up the question.
The Ruling
Core Holding — Drawee Bank Branch (Place of Dishonour)
The three-Judge Bench held that, read with Section 177 CrPC, “the return of the cheque by the drawee bank alone constitutes the commission of the offence and indicates the place where the offence is committed”. Territorial jurisdiction is therefore restricted to the court within whose local jurisdiction the cheque is dishonoured by the bank on which it is drawn; the place where the statutory notice is issued or delivered, or where the complainant chooses to present the cheque through his own bank, is not relevant for territorial jurisdiction. The proviso conditions remain essential before cognizance can be taken. The Court departed from the wider view in K. Bhaskaran v. Sankaran Vaidhyan Balan, which had permitted filing at any of the several places where the component acts occurred; the concurring opinion described that view as one that “needs to be revisited as we have done”.
Pending Cases
The Court declined to make the ruling purely prospective. Complaints in which, after summoning and appearance of the accused, recording of evidence had commenced under Section 145(2) were to continue where they were pending (deemed transferred to that court). All other complaints were to be returned to the complainant for filing in the proper court; if re-filed within thirty days of their return, they were to be deemed filed within time, unless the original filing was itself time-barred.
2015 Amendment — Legislative Override
Parliament responded by enacting the Negotiable Instruments (Amendment) Act, 2015, which altered the position for cheques delivered for collection through an account. A new Section 142(2) provides that the complaint shall be filed in the court within whose jurisdiction the branch of the bank where the payee maintains the account — the branch where the cheque is delivered for collection — is situated (and, where the cheque is presented otherwise than through an account, where the drawee bank branch is located). Section 142A was inserted to validate and govern the transfer of proceedings consistently with the amended position. For a cheque delivered for collection through an account, the 2015 Amendment therefore shifted jurisdiction to the payee's bank branch; to that extent it did not codify Dashrath Rupsingh but superseded it.
Under Section 142A, once a complaint against a drawer is pending in the court having jurisdiction under Section 142(2), all subsequent Section 138 complaints against the same drawer are to be filed before that same court; and where, on the commencement of the 2015 Act, more than one prosecution by the same payee against the same drawer was pending before different courts, the case is to be transferred to the court before which the first case was filed and is pending.
Cheque Bounce Matter? File in the Right Court.
Unified Chambers handles Section 138 NI Act matters before courts in Delhi and elsewhere in India. Correct filing jurisdiction is critical; our team advises on Section 138 complaints and the post-2015 jurisdiction rules.