Snippet #257

Jojy George Koduvath.

Taken from the Blog: Where to file Cheque Bounce Cases (Jurisdiction of Court – to file NI Act Complaint)?

The Negotiable Instruments Act, 1881, Sub Sec. (2) of Sec. 142 reads as under:

“(2) The offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction –
(a) if the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated; or
(b) if the cheque is presented for payment by the payee or holder in due course otherwise through an account, the branch of the drawee bank where the drawer maintains the account, is situated.

The words ‘otherwise through an account‘ requires explanation. It can be simplified as under:

if the cheque is presented for payment by the payee or holder in due course directly^#– otherwise through an account – in the bank of the drawer, (the proper court is that within whose local jurisdiction) the branch of the drawee bank where the drawer maintains the account, is situated.
^{#E.g. (i) a bearer cheque (contra-distinct to account-payee cheque), presented directly}^{in the drawee Bank,}^{“over the counter” (Brijendra Enterprise v. State of Gujarat, 2016(3) Guj LH 143; Mahendra} ^{Kumar Kedarnath Modi v. State of Gujarat, 2018 (1) Guj LH 288; 2018 (2) Crimes 441).}
^{E.g. (ii)}^{Using Kiosk Banking}^{facility – Reserve Bank of India introduced the system of Kiosk Banking under which specified persons can avail the banking facilities like cheque transfers, money transfers, balance inquiries, cash deposits, remittances etc., similar to that of ATM/CDM facility (See: Mahendra Kumar Agarwal v. The State of West Bengal, 2021 Cr LJ 3889; 2022-3 BC 135).}

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“Otherwise Through an Account” in Section 142, NI Act