Complaints relating to dishonour of account payee cheques under Section 138 of the Negotiable Instruments Act must be instituted only before the court that has jurisdiction over the branch of the bank where the payee maintains their account ( the home branch of the payee), observed the Supreme court in Jai Balaji Industries Ltd. and Ors. v. M/s HEG Ltd [2025 INSC 1362].
The jurisdiction will not change even if the cheque is delivered for collection at a branch different from the payee’s home branch of the payee’s bank account. That means an account payee cheque, 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, is situated.
This is because the Section 142(2)(a) of the N I Act, introduced in 2015, creates a statutory deeming fiction that even if a cheque is deposited at any branch of the payee’s bank. Such a cheque is legally deemed to have been delivered at the home branch.
The court relied on the recent judgments in Prakash Chimanlal Sheth v. Jagruti Keyur Rajpopat [2025 INSC 897] and in M/S Shri Sendhuragro and Oil Industries v. Kotak Mahidra Bank Ltd [2025 INSC 328].
However the judgment declared the ruling in Yogesh Upadhyay v. Atlanta Ltd. to be per incuriam as the judgement wrongly held that the Courts situated at any of the branches of the payee bank, where the cheque is presented, will get jurisdiction, even though only the home branch where the account of the payee is maintained will get jurisdiction.
