The Negotiable Instruments (Amendment) Act, 2015, received the assent of the President of India on 26 December 2015, and has been notified in the Gazette of India on 29 December 2015. It shall be deemed to have come into force from the retrospective date of 15 June 2015, when the first Ordinance (of 2015) to amend the Negotiable Instruments Act, 1881, was promulgated. It is pertinent to point out that the said first Ordinance was then substituted by the second Ordinance to amend the N.I. Act. Now, with the notification of the aforesaid Negotiable Instruments (Amendment) Act, 2015, which has been duly passed by the Parliament and has received the assent of the President, the Negotiable Instruments (Amendment) Second Ordinance, 2015, has been repealed. With this, the issue of territorial jurisdiction of filing of cheque bouncing cases has been finally settled.
Full text of the above Amendment Act can be seen online here.
Through this amendment, a new sub-section (2) has been inserted in Section 142 of the N.I. Act, 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.”.
Likewise, a new Section 142A has been inserted in the N.I. Act, as under:
“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.”
These amendments ensure that the jurisdiction of filing cheque dishonour cases under Section 138 of the N.I. Act will now be governed by the following new provisions as under:
(1) Now a cheque bouncing case can be filed only in the court at the place where the bank in which the payee has account is located. For example, if you are based at Delhi and you have an account in a bank in a particular area of Delhi. You receive a cheque from someone in Mumbai. You present your cheque in Delhi in the bank where you have your account. Now, if this cheque is dishonoured, then the cheque bounce case can be filed only in Delhi in the court which has jurisdiction over the area where your bank is located.
(2) Secondly, once you have filed a cheque bounce case in one particular court at a place in this manner, subsequently if there is any other cheque of the same party (drawer) which has also bounced, then all such subsequent cheque bounce cases against the same drawer will also have to filed in the same court (even if you present them in some bank in some other city or area). This will ensure that the drawer of cheques is not harassed by filing multiple cheque bounce cases at different locations. So, even multiple cheque bounce cases against the same party can be filed only in one court even if you present the cheques in different banks at different locations.
(3) Thirdly, all cheque bounce cases which are pending as on 15 June 2015 in different courts in India, will be transferred to the court which has jurisdiction to try such case in the manner mentioned above, i.e., such pending cases will be transferred to the court which has jurisdiction over the place where the bank of the payee is located. If there are multiple cheque bounce cases pending between the same parties as on 15 June 2015, then all such multiple cases will be transferred to the court where the first case has jurisdiction as per above principle.
As mentioned above, this Amendment Act comes into force retrospectively with effect from 15 June 2015, when the first Ordinance to amend the N.I. Act was promulgated in 2015 (which was then replaced by the second Ordinance). Moreover, there is a specific provision in this Amendment Act that anything done or any action taken under the N.I. Act, as amended by the Ordinance, shall be deemed to have been done or taken under the corresponding provisions of the N.I. Act, as amended by this Amendment Act. In view of these reasons, all actions taken under the said two Ordinances for filing and/or transfer of cheque dishonour cases shall be considered to be valid, in spite of the fact that the said Ordinances have been repealed / lapsed.
See, our full coverage on the cheque dishonour cases:
- Negotiable Instruments (Amendment) Second Ordinance issued on 22 September for cheque dishonour jurisdiction
- Cabinet approves new Negotiable Instruments (Amendment) Ordinance for jurisdiction in cheque bounce cases
- Lapsing of Negotiable Instruments (Amendment) Ordinance 2015 causes uncertainty in cheque bounce cases
- Jurisdiction in cheque bouncing cases is changed by new Ordinance, superseding SC judgment
- Dishonour of post-dated cheque given for Advance is not offence under S. 138 of Negotiable Instruments Act
- Jurisdiction for “at par” cheque dishonour – SLP against Bombay High Court decision dismissed by Supreme Court.
- Jurisdiction in a case of cheque bouncing – back to square one.
- Cheque bounce cases under Section 138 Negotiable Instruments Act Explained.
- Complete list of reasons for which a cheque can be returned unpaid by a bank.
- Reversal of transaction by bank of depositing cheque proceeds
- Burden of proof of service of notice in cheque dishonour case, what if accused avoiding service?
- Cheque dishonour under Section 138 N.I. Act when cheque presented multiple times in bank
- Dishonour of cheque given as security – whether offence under Section 138 N.I. Act made out?
- Cheque bouncing under S. 138 N.I. Act where cheque amount is more than liability
- Cheque dishonour jurisdiction – bank account in Delhi, cheque presented in Bangalore
