Cases of Cheque Bounce

Offence under Section- 138 of the Negotiable Instruments Act, 1881

Jurisdiction of cheque bounce cases-

1. u/s 142 of Negotiable Instruments Act, 1881

2. The Hon’ble Supreme Court of India in M/S Himalaya Self Farming Group
Vs. M/S Goyal Feed Suppliers [Transfer Petition Criminal No. 273 of
2020] held that the court within whose jurisdiction the branch of the bank
where payee maintains the account is situated, will have jurisdiction to try the
offence under the Negotiable Instruments Act, 1881, (“Act”) if the cheque is
delivered for collection through an account.

3. Through the Negotiable Instruments Amendment Act, 2015, Section 142 of the
act was amended to introduce the following provision –
“(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.”
4. Under Section 142(2)(a) of the Negotiable Instrument Act, the court within whose
jurisdiction the branch of the bank where the payee maintains the account is situated,
will have jurisdiction to try the offence if the cheque is delivered for collection
through an account. Therefore, all the grounds on which the petitioners seek transfer,
are unsustainable.”
5. Dashrath Rupsingh Rothod vs. State of Maharashtra: 2014(9) SCC 129
This is one of the landmark judgements for the cases of dishonour of cheque under section
138 and interprets the territorial jurisdiction of Court to entertain Complaint and covers the
entire journey of Judicial Precedents of Apex Court in past related to the question of
territorial jurisdiction, wherein the full Bench of Apex Court held that the case has to be
initiated at the place where the branch of the bank on which the cheque was drawn is located.
The bench also said: “In this analysis, we hold that the place, situs or venue of judicial
inquiry and trial of the offence must logically be restricted to where the drawee bank is
located.”