Complaint in cheque cases
The cognizance of the offence in a cheque dishonour case, under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) can be taken by a court not inferior to a First-Class Judicial Magistrate upon a complaint in writing by the payee or the holder in due course of the cheque, to be made within one month of the date on which the cause of action arises.
Jurisdiction of the court taking cognizance
The Section 142(2) of the NI Act says, “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 WP(CRL.) NO. 1196 OF 2022 10 drawee bank where the drawer maintains the account, is situated. Explanation.- For the purposes of clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains the account”.
Trial court must decide challenge on jurisdiction
The High Court of Kerala in Alfa One Global Builders Pvt. Ltd v Nirmala Padmanabhan holds that when the issue of jurisdiction in cheque case under NI Act arises, the challenge regarding the jurisdiction has to be raised before the concerned court and the same court has to decide the issue of jurisdiction.
The high court added that no writ petition can lie to a High Court requiring it to determine the disputed issue of jurisdiction. Therefore, the court dismissed the writ petition.
Accused challenged the jurisdiction in above case
In the writ petition the accused claimed that the complainant has no jurisdiction to file a case in the place where he holds a bank account at Alappuzha, regarding a cheque drawn on another place at Kannur.
SC’s view in jurisdiction issue
In deciding the above case the High Court relied on the Supreme Court (SC) judgement in M/s Himalaya Self Farming Group & Anr. v M/s Goyal Feed Suppliers.
The SC judgement states that as per Section 142(2)(a) of the NI 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 maintained by the complainant.
HC’s decision regarding jurisdiction
The HC, in this issue, holds that the cheque delivered for collection through a bank in a specified place is presented for payment by the complainant at a different place in a different bank through his/her account in the latter bank, the court where the cheque was presented for collection alone will have jurisdiction to entertain a cheque dishonour complaint.
The term delivery has no much importance
The term delivered used in Section 142(2)(a) of the NI Act has no much significance for the purpose of determining jurisdiction. But significance must be given to the text for collection through an account. That means, delivery of the cheque takes place where the cheque was issued and presentation of the cheque will be through the account of the payee or holder in due course, and the latter place is decisive to determine the question of jurisdiction.
Bank’s branch where payee presents gets jurisdiction
In essence, when a cheque is delivered or issued to a person for collection at any branch of the bank where the payee or holder in due course holds an account, then, the cheque shall be deemed to have been delivered or issued to the branch of the bank in which, the payee or holder in due course maintains the account under Section 142(2)(a) of the NI Act.
In essence, the place where the cheque was delivered has no much meaning and the bank where the cheque was presented for collection has the jurisdiction.
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