MULTI-CITY CHEQUE BOUNCE- WHETHER JURISDICTION EXISTS

ON THE COURT IN THE LOCAL LIMITS OF WHICH

PAYEE BANK SITUATES

Introduction
This document contains a research note on whether in a case of bounce of a multi-city cheque,
the court within the local limits of which the payee bank situates (being in a different city), can
have jurisdiction.

Note
The Negotiable Instruments (Amendment) Act, 2015, Section 142 is amended to insert sub-
section (2) which states that-
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.

S. Cause Title and Brief Facts Paragraph Para

No. Forum No.

1 Dashrath [Not a case where multi- 58.6 Once the cause of action 58.6
Rupsingh Rathod city cheques were in accrues to the complainant, the
v State of question, but this case jurisdiction of the court to try
Maharashtra and was cited in a subsequent the case will be determined by
Another case where the facts reference to the place where
involved a multicity the cheque is dishonoured.
[Supreme Court cheque]
 of India]
Eight Special Leave
Petitions filed before the
Supreme Court of India,
with respect to dishonour
of cheques in an area
falling under jurisdictions
of certain courts, however
issued to the
drawee/complainant at
some other place.

2 Ramanbhai The petitioner is facing 6. In this regard, one may refer 6, 7, 8

Mathurbhai trial for the offence to the judgment of Hon'ble
Patel v State of punishable under section Supreme Court in the matter
Maharashtra and 138 of N.I. Act in the of Dashrath v. State of
Anr. Court of Metropolitan Maharashtra cited….:
Magistrate at Kurla,
[Supreme Court Mumbai. “…..(vi) Once the cause of
of India] action accrues to the
The two cheques in complainant the jurisdiction
question were admittedly of the Court to try the case
issued by the petitioner in will be determined by
favour of the respondent reference to the place where
No. 2 of which one was the cheque is dishonoured.”
drawn on State Bank of
India, Gandhinagar 7. One may also refer to para
Branch, Gujarat and the 17 of the said judgment…:
other in State Bank of “17. …… In our
Maharashtra, Gandhinagar discernment, it is also now
Branch, Gujarat. manifest that traders and
businessmen have become
The cheques were reckless and incautious in
deposited at the bank’s extending credit where
branch in Mumbai and the they would heretofore
question was whether have been extremely
courts of Mumbai will hesitant, solely because of
have jurisdiction. the availability of redress
by way of criminal
proceedings. It is always
open to the creditor to
insist that the cheques in
question be made payable
at a place of the creditor's
convenience,

8. It is thus clear that in the

present case by issuing
cheques payable at all
branches, the drawer of the
cheques had given an option to
the banker of payee to get the
cheques cleared from the
nearest available branch of
bank of the drawer. It,
therefore, follows that the
cheques have been
dishonoured within the
territorial jurisdiction of Court
 of Metropolitan Magistrate at
Kurla.

Conclusion
Therefore, in conclusion, it can be understood that the court that is situated at the place within
the local limits of which the payee bank is present, is a court of jurisdiction in the case of bounce
of a multi-city cheque. It is immaterial that the payee bank is at a city different from that of the
branch of the bank that issued the cheque.