New Delhi, August 5, 2025 

In a key ruling aimed at resolving recurring jurisdictional disputes in cheque dishonour cases, the Supreme Court today held that a complaint under Section 138 of the Negotiable Instruments Act, 1881 must be filed only in the court within whose jurisdiction the payee maintains their bank account, and not where the cheque is presented for collection.

 

A Division Bench comprising Justice Sanjay Kumar delivered the verdict while upholding a High Court order that had quashed proceedings in a cheque bounce case on grounds of improper territorial jurisdiction.

 

“The relevant place of jurisdiction under Section 142(2)(a) is where the payee’s bank account is situated  the account into which the cheque is to be deposited  and not the location of a different branch where it may have been presented,” the bench observed.

 

The ruling came in the case of Bridgestone India Private Limited vs Inderpal Singh, where the complainant had filed a cheque dishonour complaint at a location different from where the actual bank account was maintained. While the cheque had been deposited at a branch in a different city, the Supreme Court ruled that the situs of the account itself is the determinative factor for jurisdiction under the 2015 amendment to Section 142 of the NI Act.

 

The Court clarified that the object of the 2015 amendment to Section 142(2) was to eliminate confusion and litigation arising from conflicting views about territorial jurisdiction. The amendment specifically aimed to centralize jurisdiction to the place where the payee or holder in due course maintains the account into which the cheque is deposited.

 

The bench referred to its earlier judgment in Bank of Baroda v. Kotak Mahindra Bank Ltd. (2017), where a similar interpretation was adopted to ensure procedural clarity and avoid jurisdictional forum-shopping.

 

• Section 138 of the NI Act criminalizes the dishonour of a cheque due to insufficiency of funds or stop-payment instructions.

• Section 142(2)(a), introduced via the 2015 Amendment, mandates that such complaints must be filed only in the court where the payee’s bank account is located.

• The place of presentation of the cheque is not relevant if it is different from the bank branch where the payee’s account exists.

• Complaints filed at a place other than where the payee’s account is maintained may be quashed for lack of jurisdiction.

• This decision reinforces uniformity and reduces ambiguity for complainants and trial courts alike.