A cheque dishonour case relating to any account payee cheque 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].
Payee’s Home Branch Will Determine Jurisdiction
The jurisdiction will not change even if the cheque is delivered for collection at a different branch other than the payee’s home branch of the payee’s bank account. That means, the case relating to an account payee cheque, need to be filed in the court within whose local jurisdiction the payee’s home branch is situated.
No Change in Jurisdiction Even if Deposited for Collection Elsewhere
This is because the explanation in the Section 142(2)(a) of the Negotiable Instruments Act, 1881 (NI 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 to the home branch.
The Precedents This Judgement Relied on
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].
Yogesh Upadyaya Case Declared Per Incurium
The judgment declared the ruling in Yogesh Upadhyay v. Atlanta Ltd to be per incuriam as it wrongly held that the Courts situated at any of the branches of the payee bank, where the cheque is presented, will get jurisdiction.
Quite contrary, the court situated at the place of the home branch of the payee alone will have the jurisdiction.
