Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | T.P.(Crl.) No.-001099-001099 – 2025 |
| Diary Number | 24362/2025 |
| Judge Name | HON’BLE MR. JUSTICE J.B. PARDIWALA |
| Bench | HON’BLE MR. JUSTICE J.B. PARDIWALA; HON’BLE MR. JUSTICE K.V. VISWANATHAN |
| Precedent Value | Binding on magistrates’ courts in Section 138 trials |
| Overrules / Affirms | Overrules Dashrath Rupsingh Rathod v. State of Maharashtra; Affirms Bridgestone India v. Inderpal Singh |
| Type of Law | Criminal law (Negotiable Instruments Act, 1881) |
| Questions of Law |
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| Ratio Decidendi |
The 2015 amendment introduced Section 142(2), splitting territorial jurisdiction between (a) account-payee cheques—trial in the court where the payee’s home branch is situated—and (b) bearer-cheques—trial in the court where the drawer’s home branch is situated. The Explanation to Section 142(2)(a) deems delivery at any collection branch to be delivery at the home branch, preventing forum shopping. Section 142A preserves trials already at the evidence stage under old-law courts. The CrPC’s general rules yield to this special scheme. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court |
|
| Facts as Summarised by the Court |
The complainant’s Rs.19,94,996 cheque drawn on SBI (Kolkata) was deposited in SBI (Bhopal), dishonoured, and the complainant filed in MM Kolkata where evidence began. The 2015 amendment shifted jurisdiction to the branch where the complainant maintained its account (Bhopal), prompting return of complaint, refiling in JMFC Bhopal, and a transfer petition under Section 446 BNSS read with Order XXXIX SCR. The Supreme Court resolves which court must proceed. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All magistrates’ courts trying offences under Section 138 NI Act |
| Persuasive For | High Courts and tribunals resolving pre- and post-amendment territorial disputes |
| Overrules | Dashrath Rupsingh Rathod v. State of Maharashtra ((2014) 9 SCC 129) |
| Distinguishes | K. Bhaskaran v. Sankaran Vaidhyan Balan ((1999) 7 SCC 510); Harman Electronics ((2009) 1 SCC 720) |
| Follows | Bridgestone India (P) Ltd. v. Inderpal Singh ((2016) 2 SCC 75) |
What’s New / What Lawyers Should Note
- Section 142(2)(a) anchors jurisdiction for account-payee cheques at the branch “where the payee … maintains the account,” not where the cheque was physically delivered.
- The Explanation to Section 142(2)(a) creates a deeming fiction: delivery at any collection branch is deemed delivery at the payee’s home branch—curbing forum shopping.
- Section 142(2)(b) similarly ties bearer-cheque trials to the drawer’s home branch, overriding Dashrath’s drawee-bank rule.
- Section 142A preserves trials already at evidence stage under pre-2015 courts, but fresh proceedings must follow the amended jurisdictional scheme.
- Supreme Court rejects the Yogesh Upadhyay interpretation as per incuriam.
Summary of Legal Reasoning
- Pre-2015 conflicts:
- Bhaskaran allowed venue in any local area where one of the five Section 138 acts occurred.
- Harman clarified that “cause of action” arises on notice receipt, limiting pristine Bhaskaran.
- Dashrath held cheque-dishonour itself completes the offence, fixing venue at the drawee bank’s place.
- Statutory amendment: Parliament inserted Section 142(2)(a) & (b) to specify jurisdiction for payee- and bearer-cheques; Explanation to (2)(a) deems delivery at home branch.
- Textual and purposive analysis: definitions of “delivery,” “presentment,” and “maintains an account” confirm special scheme displacing CrPC.
- Rejects per incuriam reading in Yogesh Upadhyay; reaffirms Bridgestone’s home-branch rule and avoids two-court concurrency.
- Holds Section 142A protects trials past Section 145(2) stage; transfers the present case to MM Kolkata to resume from pre-return stage.
Arguments by the Parties
Petitioners (accused):
- Jurisdiction post-amendment remains where drawee bank dishonoured the cheque.
- MM Kolkata lost power once Section 145(2) evidence had commenced and cannot return complaint.
- Transfer to Bhopal JMFC proper under Dashrath.
Respondent (complainant):
- 2015 amendment displaced Dashrath; jurisdiction lies in Bhopal because payee maintains account there.
- MM Kolkata correctly returned complaint; only JMFC Bhopal is competent.
Factual Background
Jai Balaji Industries Ltd. (and its directors) issued an account-payee cheque for Rs.19,94,996 drawn on State Bank of Bikaner & Jaipur, Kolkata. HEG Ltd. deposited it in its SBI Bhopal account; it was dishonoured for insufficiency of funds. After notice and non-payment, HEG filed under Section 138 in MM Kolkata, where evidence commenced. The 2015 amendment shifted Section 138 jurisdiction to the branch where the payee maintains its account (Bhopal); MM Kolkata returned the complaint, it was refiled in JMFC Bhopal, and the accused sought transfer back to Kolkata under Section 446 BNSS/Order XXXIX SCR.
Statutory Analysis
- Section 142(1) limits cognizance and trial to Metropolitan/JMFC courts on complaints by payee/holder in due course.
- Section 142(2)(a) & (b) specify territorial jurisdiction:
- (a) For account-payee cheques (“delivered for collection through an account”): the court where the payee’s home branch is situated.
- (b) For other presentations: the court where the drawer’s home branch is situated.
- Explanation to (2)(a) deems delivery at any collection branch as delivery at the home branch.
- Section 142A provides deemed transfer of pending complaints to courts now competent under Section 142(2), but preserves trials beyond Section 145(2) stage in their existing courts.
Procedural Innovations
- Section 142A introduces automatic transfer of pending Section 138 cases to newly competent courts.
- Maintains a carve-out for complaints already at evidence stage under Section 145(2), avoiding reopening certain trials.
Alert Indicators
- 🚨 Breaking Precedent – Overrules Dashrath Rupsingh Rathod
- ✔ Precedent Followed – Bridgestone India v. Inderpal Singh; statutory mandate of Section 142(2) & Explanation
- 🔄 Conflicting Decisions – Rejects Yogesh Upadhyay per incuriam