{"id":368088,"date":"2025-11-28T18:00:00","date_gmt":"2025-11-28T12:30:00","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=368088"},"modified":"2025-12-01T17:19:00","modified_gmt":"2025-12-01T11:49:00","slug":"s-138-ni-act-sc-on-jurisdiction-to-try-complaints-for-account-payee-cheque","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/11\/28\/s-138-ni-act-sc-on-jurisdiction-to-try-complaints-for-account-payee-cheque\/","title":{"rendered":"Supreme Court clears the air on which Court has the jurisdiction to try complaint under S. 138 NI Act in respect of account payee cheque"},"content":{"rendered":"
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Supreme Court:<\/span> While considering this petition wherein the issue was whether after the enactment of the Negotiable Instruments (Amendment) Act, 2015<\/a> (Amendment Act, 2015), the court within whose local jurisdiction the drawee bank is situated, has the jurisdiction to try a complaint under Section 138; the Division Bench of J.B. Pardiwala*<\/span> and R. Mahadevan, JJ., held that jurisdiction to try a complaint filed under Section 138 in respect of a cheque delivered for collection through an account, i.e., an account payee cheque<\/span>, is vested in the court within whose local jurisdiction the branch of the bank in which the payee maintains the account, i.e., the payee’s home branch<\/span>, is situated.<\/p>\n

Background:<\/h3>\n

A cheque for Rs. 19,94,996 was drawn by the accused company (petitioner herein) through its directors, against an invoice generated by the complainant (respondent herein), dated 23-03-2014. The cheque was drawn on the State Bank of Bikaner and Jaipur, Kolkata and the same was deposited by the complainant on 19-06-2014 in its account maintained with the State Bank of India, Bhopal branch.<\/p>\n

The cheque, however, came to be dishonoured due to insufficiency of funds on 20.06.2025 pursuant to which, the complainant issued the statutory notice dated 11.07.2014 to all the accused persons through registered speed post A\/D, demanding that the sum of Rs. 19,94,996 be paid within a period of 15 days as prescribed under Section 138<\/a> of the Act, 1881<\/a> in lieu of the dishonoured cheque. The said notice was delivered on 14-07-2014. The accused company took the defence that the said cheque had been issued as a ‘Security Deposit’ and not in discharge of any enforceable debt. As a result, the complainant company filed the case in the court of the Metropolitan Magistrate, Kolkata (the “MM, Kolkata”) on 16-08-2014. Consequently, the MM, Kolkata proceeded to frame charge to which the accused persons pleaded not guilty and claimed to be tried. The affidavit of evidence-in- chief of the complainant company’s officer was taken on record by the MM, Kolkata.<\/p>\n

While the case was pending before the MM, Kolkata, the Government enacted the Amendment Act, 2015 on 26-12-2015. In accordance with the terms of the amendment to the Act, 1881<\/a>, more particularly, Section 142 thereof, the territorial jurisdiction for prosecution and trial of cases registered under Section 138 was stipulated to be at the place where the payee or holder maintains his bank account. In this case, the payee, i.e., the complainant company maintained its bank account with the State Bank of India, Bhopal branch.<\/p>\n

Upon request made by the complainant company, the MM, Kolkata returned the complaint observing that it lacked the jurisdiction to conduct trial for the case in hand and allowed the complainant to present the matter before the court of competent jurisdiction. The complainant company got the complaint for dishonour of cheque registered in the court of the Judicial Magistrate First Class, Bhopal (the “JMFC, Bhopal”). The accused company raised an objection as regards the territorial jurisdiction of the JMFC, Bhopal to try the offence relying on the provisions of the CrPC<\/a>. However, the said objections were rejected by the JMFC, Bhopal. The same was then challenged by the accused persons vide Criminal Revision before the Sessions Court, Bhopal which is still pending adjudication.<\/p>\n

Issues Framed:<\/h3>\n