Territorial Jurisdiction (Sections 142(2) and 142A)

Where should a cheque dishonour complaint be filed? The answer has swung back and forth. For fifteen years complainants could choose among several places; in 2014 the Supreme Court confined them to the drawer's bank; in 2015 Parliament moved jurisdiction to the payee's bank branch. This note traces that history and explains the present rule in Section 142(2), the validation provision in Section 142A, and recent decisions applying them.

1. The History

K. Bhaskaran v. Sankaran Vaidhyan Balan (1999): the offence has five components: drawing the cheque, presenting it, its return, giving notice and failure to pay. A complaint could be filed wherever any of these occurred.
Harman Electronics v. National Panasonic India (2009): merely sending the notice from a place does not confer jurisdiction there.
Dashrath Rupsingh Rathod v. State of Maharashtra (three judges, 2014): the offence is committed where the cheque is dishonoured by the drawee bank; only the court where the drawer's bank branch is located has jurisdiction. Pending complaints elsewhere were to be returned for filing in the proper court.
Negotiable Instruments (Amendment) Act, 2015: following an ordinance of June 2015, Parliament inserted Section 142(2) and Section 142A, shifting jurisdiction to the court where the payee's bank branch is located, for cheques delivered for collection through an account.

2. The Present Rule (Section 142(2))

Section 142(2), Negotiable Instruments Act, 1881

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.

Explanation. For the purposes of clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains the account.

Collection through an account (clause (a)): jurisdiction lies where the payee's branch, at which he maintains the account, is situated.
Deposit at another branch (Explanation): if the payee deposits the cheque at any other branch of his bank, it is deemed delivered to his home branch. Depositing at a distant branch does not create jurisdiction there.
Presentation over the counter (clause (b)): where the payee presents the cheque for payment otherwise than through an account, for example directly at the drawer's bank, jurisdiction lies where the drawer's branch is situated.

3. Validation and Consolidation (Section 142A)

Transferred cases (Section 142A(1)): cases transferred to the court having jurisdiction under Section 142(2) after the 2015 amendment are deemed validly transferred, notwithstanding any judgment, as if Section 142(2) had been in force at all material times.
Later complaints (Section 142A(2)): once a payee has filed a complaint against a drawer in the court having jurisdiction, all subsequent complaints by him against the same drawer must be filed in the same court, wherever the later cheques were delivered or presented.
Several pending cases (Section 142A(3)): where several prosecutions by the same payee against the same drawer were pending in different courts when the amendment came into force, they are to be transferred to the court where the first case was filed.

4. Applying the Rule

Pending cases: the Supreme Court applied the amended provisions to pending cases and held that they overcome Dashrath Rupsingh Rathod (Bridgestone India v. Inderpal Singh, 2016).
Home branch at presentation: the complaint lies where the payee maintains his account at the time of presentation, not where the cheque was physically deposited or where the payee later moved his account (Prakash Chimanlal Sheth v. Jagruti Keyur Rajpopat, Supreme Court, 2025).

⚠ Key point

Earlier, a complaint could be filed wherever any of the five acts occurred (K. Bhaskaran, 1999), until Dashrath Rupsingh Rathod (2014) confined jurisdiction to the drawer's bank. The 2015 amendment reversed this: under Section 142(2), if the cheque is delivered for collection through an account, the court where the payee's home branch is situated has jurisdiction, any branch of deposit being deemed the home branch; if it is presented over the counter, the court of the drawer's branch. Section 142A validates transfers and requires later complaints against the same drawer to go to the same court. The relevant account is the one maintained at the time of presentation (Prakash Chimanlal Sheth, 2025).

5. Related Topics and Provisions

History and amendments (Topic 2)
Cognizance and limitation (Topic 47)
Landmark judgments (Topic 59)