Bombay High Court: Dismissing a plea in a  cheque bounce case, a bench comprising of S.B. Shukre, J held that only drawee bank’s jurisdiction could be considered during criminal proceedings under Section 138 of Negotiable Instruments  Act, 1881, even though the Real Time Gross Settlement (RTGS) system facility enabled the citizens to draw and pay cheques at any branches all over the country.

The Court clarified that there can be only one drawee bank and not several. When the RTGS cheques bear an endorsement “payable at all our branches”, it only means “payment instructions expedited” enabling receipt thereof immediately.The court observed that there is a difference between processing of cheque for payment, and giving approval to the processing branch for the payment. The branch which processes the cheque and obtains approval for payment from the original branch where funds are actually parked, can only be called as the facilitator. It can’t be termed as the “drawee” under Section 7 of the NI Act.

The Judge observed that the RBI has made it clear that what is contemplated under RTGS is only transfer of funds by the “drawee bank” to other branches which received the cheques. It means that dishonour of cheque takes place at the place where the “drawee bank” is situated. Sangita vs. Judicial Magistrate, First Class, 2015 SCC OnLine Bom 273 decided on 13-01-2015

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