Where Can a Cheque Bounce Case Be Filed? A Simple Look at the Escorts Limited vs. Rama Mukherjee Case

In 2013, the Supreme Court of India made an important decision in a case between M/S. Escorts Limited and Rama Mukherjee.

This case was about a cheque that was not honored (also called a “dishonored cheque”) and where the legal complaint about it could be filed. Let’s break it down in simple English.

What Happened?

Escorts Limited filed a complaint against Rama Mukherjee because a cheque she gave them was dishonored—it didn’t have enough money to be cashed.

They filed the case in Delhi, but Rama Mukherjee said Delhi courts couldn’t hear the case because the cheque wasn’t presented for cashing there.

The High Court agreed with her and said Delhi courts had no power (jurisdiction) to handle the case. Escorts Limited then took the matter to the Supreme Court.

What Did Escorts Limited Say?

Escorts Limited argued that the court where the cheque was presented for cashing should have the right to hear the case. This rule comes from Section 138 of the Negotiable Instruments Act, a law that deals with cheque bounce cases. They said the cheque was presented in Delhi, so Delhi courts should handle it.

What Did Rama Mukherjee Say?

Rama Mukherjee disagreed. She said the cheque wasn’t presented in Delhi, so the courts there shouldn’t be allowed to take up the case. She believed the case should go to a different court, not in Delhi.

What Did the Supreme Court Decide?

The Supreme Court looked at the facts and made a clear decision. It said:

• The High Court was wrong to say Delhi courts had no jurisdiction.
• According to an earlier Supreme Court ruling (called Nishant Aggarwal’s case), the court where the cheque is presented for cashing has the power to hear the case.
• In this case, the High Court itself had noted that the cheque was presented in Delhi.
• Because of this, Delhi courts do have the right to hear the case.

The Supreme Court overturned the High Court’s order and allowed Escorts Limited’s appeal. However, it also said that if Rama Mukherjee wanted to argue about the facts (like where the cheque was really presented), she could raise that issue later, and it would be handled legally.

Why Did the Supreme Court Say This?

The Supreme Court explained that the law is clear: jurisdiction depends on where the cheque was presented for cashing. Since the records showed it happened in Delhi, the case belonged there.

The High Court’s decision went against this rule and an earlier Supreme Court judgment. The Supreme Court wanted to make sure the law was followed correctly.

What Does This Mean?

This case shows that if someone gives you a cheque that bounces, you can file a complaint in the court where you tried to cash it.

In this situation, it was Delhi, so the Delhi courts could take up the case. It’s an important rule for anyone dealing with cheque payments.

A Word of Caution

This article is just to help you understand the case—it’s not legal advice. Laws can be tricky, and every situation is different.

If you’re facing a similar issue, it’s best to talk to a lawyer. Firms like Legal Light Consulting have experts who can help you with legal problems and make the process easier.

Disclaimer: This article is for educational purposes only and does not offer legal advice. For help with your specific case, please contact a qualified lawyer.