top of page
Question Bank
Question
What is the foundational legal principle governing the territorial jurisdiction for filing a complaint under Section 138 of the Negotiable Instruments Act, 1881?
Solution
The foundational legal principle is that the complaint for the offence of cheque dishonour must be filed in a court that possesses the appropriate territorial jurisdiction as specifically defined by the statute itself. This is not governed by the general provisions of the Code of Criminal Procedure (Cr.P.C.) but by the special law, i.e., the Negotiable Instruments (N.I.) Act, 1881. The location where the offence is deemed to have occurred is precisely delineated in the Act to provide clarity and prevent confusion regarding the appropriate forum for legal action.
Question
Which specific statutory provision determines the court's jurisdiction when a dishonoured cheque was delivered for collection through a bank account?
Solution
The specific statutory provision is Section 142(2)(a) of the Negotiable Instruments Act, 1881. This clause, particularly after its amendment, explicitly stipulates that if a cheque is delivered for collection through an account, the offence shall be inquired into and tried only by a court within whose local jurisdiction the branch of the bank where the payee maintains the account is situated. This provision creates a clear and unambiguous rule for establishing jurisdiction in such scenarios.
Question
What is the critical factor in determining the correct court for a cheque dishonour case when the cheque is presented for collection via a bank account?
Solution
The single most critical factor is the location of the branch of the bank where the payee maintains his account. It is the situs of the payee's bank branch that conclusively determines the court's territorial jurisdiction. The place where the drawer issued the cheque, or the branch where the payee physically deposited it for collection, is not the determining factor. The law focuses on the destination of the funds—the payee's account—making that branch's location the epicenter for jurisdictional purposes.
Question
What is the legal basis for initiating a prosecution for the offence of cheque dishonour under Section 138 of the N.I. Act?
Solution
The legal basis for initiating prosecution is the filing of a complaint case under Section 200 of the Code of Criminal Procedure (Cr.P.C.), read with Section 138 of the N.I. Act. A complaint under Section 138 is not a state-led prosecution but a quasi-criminal proceeding initiated by the aggrieved person (the payee or holder in due course). The complainant sets the law in motion by filing this complaint before a magistrate with the requisite jurisdiction, following the statutory procedure laid down for such cases.
Question
In a scenario where a payee deposits a cheque at a branch different from where he maintains his account, which court will have the jurisdiction to try the case?
Solution
In such a scenario, jurisdiction is vested exclusively with the court having authority over the area where the branch of the bank where the payee maintains his account is located. Even if the cheque is physically deposited at a different branch (for instance, for faster clearance or convenience), the legal fiction created by Section 142(2)(a) of the N.I. Act dictates that the cause of action for filing the complaint arises at the location of the payee's home branch. The act of depositing the cheque at another branch is merely a ministerial step for collection; the ultimate destination—the payee's account—governs the jurisdiction.
bottom of page