Clarity on Section 138 Cheque Bouncing Cases after Ordinance

                             Negotiable Instrument Act 1881

Date:- 05-07-2015

!!!Clarity on Section 138 Cheque Bouncing Cases!!!

So, what is the change in jurisdiction of filing for cheque bouncing cases now in view of the Ordinance?

The jurisdiction of filing cheque dishonor cases under Section 138 of the N.I. Act is now changed by the above Ordinance as under:

 Now a cheque bouncing case can be filed only in the court at the place where the bank in which the payee has account is located.

For example:- If you are operating from Delhi and you have an account in a bank in a particular area of Delhi. You receive a cheque from someone in Mumbai . You presented your cheque in Delhi in the bank where you have your account. Now, if this cheque is doshonoured, then the cheque bouncing case can be filed only in Delhi in the court which has jurisdiction over the area where your bank is located. 

              Secondly once you filed a cheque bouncing case in one particular court at a place in this manner, subsequently if there is any other cheque of the same party (Drawer) which has also bounced, then all such subsequent cheque bounce cases against the same drawer will also have to be filed in the same court (even if you present them in some bank in some other city or area). This will ensure that the drawer of cheques is not harassed by filing multiple cheque bounce cases at different locations. So, even multiple cheque bounce cases against the same party can be filed only in one court even if you present the cheques in different banks at different locations. 

              Thirdly, all cheque bounce cases which are pending as on 15 June 2015 in different courts in India, will be transferred to the court which has jurisdiction to try such case in the manner mentioned above i.e., such pending cases will be transferred to the court which has jurisdiction over the place where the bank of the payee is located. If there are multiple cheque bounce cases pending between the same parties as on 15 June 2015, then all such multiple cases will be transferred to the court where the first case has jurisdiction as per above principle.

                Thus, this new Ordinance now introduce some clarity and uniformity in the matter of cheque dishonour cases. This ordinance takes care of the interest of payee of the cheque while at the same time also taking care that the drawer of the multiple cheques is not harassed by multiple filing multiple litigations  at different locations to harass him (if more than one cheque has bounced). 

      This Ordinance supersedes the Supreme Court decision dated 1 August 2014 [Darshrath Rupsing Rathod v. State of Maharashtra, (2014) 9 SCC 129] or any other judgement/decision of any court (Supreme Court or High Courts ) in this issue.