The latest legal position with regard to jurisdiction in cheque bounce cases is laid down in Section 142(2) of the Negotiable Instruments Act, which was amended with effect from 15 June 2015, and this amended provision is as under:
“(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.”
So, the cheque bounce case can now be filed in the court which has jurisdiction over the place where the branch of the bank where the payee maintains the account, is situated. It is NOT at the place where the drawer of the cheque maintains the account. This is the latest position.
Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.
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