Jurisdiction on Cheque Bounce Cases

For a while now there has been a raging debate in legal circles on the question of jurisdiction of courts in entertaining complaints relating to complaints under the Negotiable Instruments Act. Views have swung in different directions. It is in this context that the latest view of the Apex court as spoken by a bench presided over by Justices P. Sathasivam (as he then was) and Jagdish Singh Khehar gains importance.
Dealing with the question whether the Court, where a cheque is deposited for collection, would have territorial jurisdiction to try the accused for an offence punishable Under Section 138 of the Negotiable Instruments Act, 1881 or would it be only the Court exercising territorial jurisdiction over the drawee bank or the bank on which the cheque is drawn in the affirmative, the bench has made clear that a case can be filed under in the court within the territorial jurisdiction of the drawee court or the payee court.
The court was dealing with a case where the cheque in question was drawn in favour of the Standard Chartered Bank Gauhatii and presented at a Bank in Haryana where the cheque bounced. The complaint for the bounced cheque was filed in Haryana. The complainant then complained that the case would be quashed as the court in Haryana had no jurisdiction to try the case.
Dealing with the question of jurisdiction based on the territorial existence of the Bank the bench said: The locality where the Bank (which dishonoured the cheque) is situated cannot be regarded as the sole criterion to determine the place of offence. It must be remembered that offence Under Section 138 would not be completed with the dishonour of the cheque. It attains completion only with the failure of the drawer of the cheque to pay the cheque amount within the expiry of 15 days mentioned in Clause (c) of the provision to Section 138 of the Act. It is normally difficult to fix up a particular locality as the place of failure to pay the amount covered by the cheque. A place, for that purpose, would depend upon a variety of factors. It can either be at the place where the drawer resides or at the place where the payee resides or at the place where either of them carries on business. Hence, the difficulty to fix up any particular locality as the place of occurrence for the offence Under Section 138 of the Act.
The bench went on the deal with the earlier cases on the subject and pointed out that as earlier pointed out in the earlier judgments. The offence Under Section 138 of the Act can be completed only with the concatenation of a number of acts. The following are the acts which are components of the said offence: (1) drawing of the cheque, (2) presentation of the cheque to the bank, (3) returning the cheque unpaid by the drawee bank, (4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, (5) failure of the drawer to make payment within 15 days of the receipt of the notice.
Cracking the challenge that all of the above said actions cannot take place at a single place and the court needs to deal with a scenario where the different contours of the offence are committed in different territorial areas , Justice Sadasivan referred to the relevant provisions of the Criminal Procedure code which deals with the question of court of proper jurisdiction and observed “Thus it is clear, if the five different acts were done in five different localities any one of the courts exercising jurisdiction in one of the five local areas can become the place of trial for the offence Under Section 138 of the Act. In other words, the complainant can choose any one of those courts having jurisdiction over any one of the local areas within the territorial limits of which any one of those five acts was done. As the amplitude stands so widened and so expansive it is an idle exercise to raise jurisdictional question regarding the offence Under Section 138 of the Act.”
Resultantly the verdict makes clear that the complainant can choose any of the courts where any part of the many facets of the offence takes place and can validly maintain his complaint against the person who issues the cheque but does not back it with enough funds.

L. Ravichander.