Supreme Court Clarifies Jurisdiction in Cheque Bounce Cases

In the case of M/s. Escorts Limited vs. Rama Mukherjee (2013), the Supreme Court of India addressed the issue of which the court has the authority to handle cases involving dishonoured cheques under Section 138 of the Negotiable Instruments Act, 1881.​

Background of the Case

M/s. Escorts Limited filed a complaint under Section 138 of the Negotiable Instruments Act against Ms. Rama Mukherjee, alleging that a cheque issued by her was dishonored upon presentation. The key question was whether the courts in Delhi had the jurisdiction to entertain this complaint.​

Arguments Presented

Appellant (M/s. Escorts Limited):

• Argued that the court where the dishonored cheque was presented for encashment has the jurisdiction to entertain the complaint under Section 138 of the Negotiable Instruments Act.​

Respondent (Ms. Rama Mukherjee):

• Contended that the courts in Delhi did not have jurisdiction because the cheque was not presented for encashment in Delhi.​

Supreme Court’s Findings

The Supreme Court referred to its earlier decision in K. Bhaskaran vs. Shankaran Vaidhyam Balan & Anr. (1999), where it identified five essential components of an offense under Section 138 of the Negotiable Instruments Act:​Drawing of the cheque

1. Presentation of the cheque to the bank.​

2. Returning of the cheque unpaid by the drawee bank.​

3. Giving notice in writing to the drawer demanding payment.​

4. Failure of the drawer to make payment within 15 days of receiving the notice.​

The Court emphasized that these acts can occur in different locations, and any court within whose jurisdiction any of these acts was committed has the authority to hear the case.

In this particular case, the High Court had noted that the cheque was presented for encashment in Delhi. Therefore, the Supreme Court concluded that the courts in Delhi did have jurisdiction to entertain the complaint.​

Conclusion

The Supreme Court set aside the High Court’s order and affirmed that the courts in Delhi had the jurisdiction to hear the cheque bounce case under Section 138 of the Negotiable Instruments Act.

This decision reinforces the principle that jurisdiction in such cases is not confined to a single location but can extend to any place where any of the constituent acts of the offense occurred.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific legal guidance, please consult a qualified lawyer