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Jurisdiction for cheque bounce

I am from Chennai. I need a clarification. A person has given me a cheque of Bank which is located in Area "X" (Its jurisdiction also lets say "X"). I have my Bank's home branch in Area "Y" (Its jurisdiction is "Y") and I deposited that cheque for collection in some other branch of my bank which is located in Area "Z" (Its jurisdiction is "Z"). Now this cheque got bounced. My question is in which Jurisdiction I need to file a case, whether it is "Y" (where home branch of my bank located) or "Z" (where I deposited the cheque for clearance).



Learning

 6 Replies

r.sathyanarayanan   02 March 2016

In the place where u maintain your bank a/c.assuming if the cheque is honoured that account only would hv credited.depositing in some other branch is for the sack of convenience.

saravanan s (legal advisor)     02 March 2016

You can file the case in the court within whose jurisdiction the branch in which the cheque bounced is located

I know not law, but i try to l (Lawyer )     04 March 2016

The Jurisdiction would be in Y

Prasun Chandra Das (Banker)     19 April 2016

Harman Electronics (P) Ltd vs. National Panasonic India Ltd - By Hon’ble Supreme Court of India – Date of Judgment – 12/12/2008.

Issue :

Territorial jurisdiction of a court to try an offence under Section 138 of the Negotiable Instruments Act, 1881 is in question in this case. Before we go into the Judgment details, we would like to place on record that the practice of some banks and NBFC’s and Retail Loan providers allegedly under legal advise to file Section 138 cases at a place different from the place where the defaulter resides and thereby frustrate the defaulter and got issued warrants against them have been stopped by the Hon’ble Supreme Court. The Court has held that the place to file Section 138 complaint is the place where the defaulter resides.

 

Brief facts and background:

 

Appellants and respondent entered into a business transaction. Appellant is a resident of Chandigarh. He carries on business in Chandigarh. The cheque in question admittedly was issued at Chandigarh. Complainant also has a branch office at Chandigarh although his Head Office is said to be at Delhi. It is stated that the cheque was presented at Chandigarh. However, it is in dispute as to whether the said cheque was sent for collection to Delhi. The cheque was dishonoured also at Chandigarh. However, the complainant - respondent issued a notice upon the appellant asking him to pay the amount from New Delhi. Admittedly, the said notice was served upon the respondent at Chandigarh. On failure on the part of the appellant to pay the amount within a period of 15 days from the date of communication of the said letter, a complaint petition was filed at Delhi. Cognizance of the offence was taken against the appellant by the learned judge. Questioning the jurisdiction of the court of Additional Sessions Judge, New Delhi, an application was filed which was disposed of by the learned Additional Sessions Judge, New Delhi in terms of an order dated 3.2.2003.

 

Appeal:

 

The appeal is filed by challenging the decision. The learned Senior Counsel appearing on behalf of the appellant would submit that as the entire cause of action arose within the jurisdiction of the courts at Chandigarh, the learned Additional Sessions Judge, New Delhi had no jurisdiction to take cognizance of the offence.

 

Observations of the Court:

 

Indisputably, the parties had been carrying on business at Chandigarh. The Head Office of the complainant - respondent may be at Delhi but it has a branch office at Chandigarh. It is not in dispute that the transactions were carried on only from Chandigarh. It is furthermore not in dispute that the cheque was issued and presented at Chandigarh. The complaint petition is totally silent as to whether the said cheque was presented at Delhi. As indicated hereinbefore, the learned counsel appearing on behalf of the complainant - respondent contended that in fact the cheque was put in a drop box but as the payment was to be obtained from the Delhi Bank, it was sent to Delhi. The facility for collection of the cheque admittedly was available at Chandigrh and the said facility was availed of. We have no other option but to presume that the cheque was presented at Chandigarh. Indisputably, the dishonour of the cheque also took place at Chandigarh. The only question, therefore, which arises for consideration is that as to whether sending of notice from Delhi itself would give rise to a cause of action for taking cognizance under the Negotiable Instruments Act. Issuance of notice would not by itself give rise to a cause of action but communication of the notice would. In terms of Section 177 of the Code of Criminal Procedure every offence shall ordinarily be inquired into and tried by a court within whose local jurisdiction it was committed. While issuance of a notice by the holder of a negotiable instrument is necessary, service thereof is also imperative. Only on a service of such notice and failure on the part of the accused to pay the demanded amount within a period of 15 days thereafter, commission of an completes. Giving of notice, therefore, cannot have any precedent over the service. We cannot, as things stand today, be oblivious of the fact that a banking institution holding several cheques signed by the same borrower cannot only present the cheque for its encashment at four different places but also may serve notices from four different places so as to enable it to file four complaint cases at four different places. This only causes grave harassment to the accused. It is, therefore, necessary in a case of this nature to strike a balance between the right of the complainant and the right of an accused vis--vis the provisions of the Code of Criminal Procedure.

 

Judgment:

 

 For the views we have taken it must be held that Delhi High Court has no jurisdiction to try the case. The appeal is allowed with the aforementioned observations and directions.

MARU ADVOCATE (simple solutions for criminal legal problems -- yourpunch@gmail.com)     20 April 2016

Now law is changed . By amendment in NI act all earlier SC judgments have been negativated.

 

However due to hasty drafting in the law some imp links are available for any accused to take its advantage.

Cheque bounce accused can send complete details of the complaint for line of action.

Prasun Chandra Das (Banker)     21 April 2016

Thanks Maru Advocate. 

 

Sec 142 of NI Act, earlier was:

 

Cognizance of offences. Notwithstanding anything contained in the Code of Criminal Procedure,   1973   (2 of 1974),-
(a)    no      court    shall    take    cognizance    of      any offence punishable    under    section 138 except upon    a    complaint, in writing,  made by the payee or,   as the case may be,   the holder in due course of the cheque;
(b)    such complaint is made within one month of the date on which    the    cause of action arises under clause     (c)     of the proviso to section 138;
(c)    no court inferior to that of a Metropolitan Magistrate
or a Judicial Magistrate of the first class shall try any offence punishable under section 138.]

 

Now, after the Amendment of NI Act:

 

"(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 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.
Explanation.— For the purposes of clause (a), where a cheque is delivered
for collection at any branch of the bank of the payee or holder in due course,
then, the cheque shall be deemed to have been delivered to the branch of the
bank in which the payee or holder in due course, as the case may be, maintains
the account.".
4. In the principal Act, after section 142, the following section shall be inserted,
namely:—
"142A. (1) Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 or any judgment, decree, order or direction of any court, all cases
transferred to the court having jurisdiction under sub-section (2) of section 142, as
amended by the Negotiable Instruments (Amendment) Ordinance, 2015, shall be deemed
to have been transferred under this Act, as if that sub-section had been in force at all
material times.
(2) Notwithstanding anything contained in sub-section (2) of section 142 or
sub-section (1), where the payee or the holder in due course, as the case may be, has
filed a complaint against the drawer of a cheque in the court having jurisdiction under
sub-section (2) of section 142 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 for
payment within the territorial jurisdiction of that court.
(3) If, on the date of the commencement of the Negotiable Instruments
(Amendment) Act, 2015, more than one prosecution filed by the same payee or holder
in due course, as the case may be, against the same drawer of cheques is pending
before different courts, upon the said fact having been brought to the notice of the
court, such court shall transfer the case to the court having jurisdiction under
sub-section (2) of section 142, as amended by the Negotiable Instruments (Amendment)
Ordinance, 2015, before which the first case was filed and is pending, as if that
sub-section had been in force at all material times.


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