Dishonour of Cheque cases can be filed only
to the Court within whose local jurisdiction, the offence was Committed; i.e.,
where the cheque is dishonoured by the bank on which it is drawn. Bhaskaran Vs
Balan (1999) which allowed five territorial Jurisdictions overruled.
A three Judge Bench of the Supreme Court finally
held that a Complaint of Dishonour of Cheque can be filed only
to the Court within whose local
jurisdiction the offence was committed, which in the
present context is where the cheque is dishonoured by the bank on
which it is drawn. The Court clarified that the Complainant is statutorily bound to
comply with Section 177 etc, of the Criminal Procedure Code and therefore the place or situs
where the Section 138 Complaint is to be filed is not of his choosing.
Overruled the two Judge Bench Judgment in K. Bhaskaran v. Sankaran Vaidhyan Balan (1999) 7 SCC 510 wherein it was held that
“the offence under Section 138 of the Act can be completed only with the
concatenation of a number of acts. 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. “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.”
Justice T.S.
Thakur summarized the principals as follows:-
“(i) An
offence under Section 138 of the Negotiable Instruments Act, 1881 is committed
no sooner a cheque drawn by the accused on an account being maintained by him
in a bank for discharge of debt/liability is returned unpaid for insufficiency
of funds or for the reason that the amount exceeds the arrangement made with
the bank.
(ii) Cognizance of any such offence is however forbidden under Section 142
of the Act except upon a complaint in writing made by the payee or holder of
the cheque in due course within a period of one month from the date the cause
of action accrues to such payee or holder under clause (c) of proviso to
Section 138.
(iii) The cause of action to file a complaint accrues to a complainant/payee/holder
of a cheque in due course if,
(a) The dishonoured cheque is presented to the drawee
bank within a period of six months from the date of its issue.
(b) If the complainant has demanded payment of
cheque amount within thirty days of receipt of information by him from the bank
regarding the dishonour of the cheque and
(c) If the drawer has failed to pay the cheque
amount within fifteen days of receipt of such notice.
(iv) The facts constituting cause of action do not constitute the ingredients
of the offence under Section 138 of the Act.
(v) The proviso to Section 138 simply postpones/defers institution of
criminal proceedings and taking of cognizance by the Court till such time cause
of action in terms of clause (c) of proviso accrues to the complainant.
(vi) Once the cause of action accrues to the complainant, the jurisdiction
of the Court to try the case will be determined by reference to the place where
the cheque is dishonoured.
(vii) The general rule stipulated under Section 177 of Criminal Procedure Code
applies to cases under Section 138 of the Negotiable Instruments Act.
Prosecution in such cases can, therefore, be launched against the drawer of the
cheque only before the Court within whose
jurisdiction the dishonour takes place except in situations where the
offence of dishonour of the cheque punishable under Section 138 is committed
along with other offences in a single transaction within the meaning of Section
220(1) read with Section 184 of the Code of Criminal Procedure or is covered by
the provisions of Section 182(1) read with Sections 184 and 220 thereof.”
Prepared by: S. Hemanth
Advocate at Hemanth &
Associates
