The Supreme Court, in Prakash Chimanlal Sheth v. Jagruti Keyur Rajpopat [2025: INSC: 897], has reiterated the principle governing territorial jurisdiction for an offence of cheque dishonour under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). Jurisdiction lies with the court within whose limits the bank branch is situated where the payee maintains the account through which the cheque was presented for collection.
Therefore, jurisdiction is determined not by the physical location where the cheque was deposited, but by the location of the bank branch where the payee’s account is held.
In the instant case, the Complainant deposited the cheques at the Opera House Branch of Kotak Mahindra Bank in Mumbai, while his account was maintained with the bank’s Mangalore branch. The Magistrate in Mangalore dismissed the subsequent complaint, citing a lack of jurisdiction on the grounds that the place of physical presentation determined jurisdiction. While the Karnataka High Court upheld this dismissal, the Supreme Court reversed the decision.
In its reasoning, the Supreme Court relied on its earlier judgment in Bridgestone India Pvt. Ltd. v. Inderpal Singh (2016). This precedent established that Section 142(2)(a) of the Negotiable Instruments Act confers jurisdiction upon the court where the payee’s bank branch is located, provided the cheque is deposited for collection into the account maintained at that branch.
References
- Prakash Chimanlal Sheth v. Jagruti Keyur Rajpopat, [2025: INSC: 897]
- Bridgestone India Pvt. Ltd. v. Inderpal Singh (2016)
