Case Note & Summary
The appeals arose from the Supreme Court of India, Sanjay Kumar and Satish Chandra Sharma JJ., involving criminal complaints under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). The appellant had lent money to Keyur Lalitbhai Rajpopat, with the respondent, his wife, standing as guarantor and also availing financial assistance. Four cheques totalling Rs. 38,50,000 issued by the respondent in September 2023 were dishonoured due to insufficiency of funds. The appellant deposited these cheques at Kotak Mahindra Bank, Opera House Branch, Mumbai, for credit to his account at the Bendurwell, Mangalore Branch. On dishonour, he filed four complaint cases before the Judicial Magistrate First Class, Fifth Court, Mangalore. The Magistrate returned the complaints on 12.12.2023, holding that since the drawee bank was in Mumbai, the Mangalore court lacked territorial jurisdiction. The High Court of Karnataka dismissed the appellant's petitions under Section 482 Cr.P.C. on 05.03.2024, confirming the Magistrate's order. The appellant appealed to the Supreme Court. The core legal issue was whether the territorial jurisdiction for a Section 138 NI Act complaint is determined by the location of the drawee bank or the branch where the payee maintains his account. The appellant contended that his account was with Kotak Mahindra Bank's Bendurwell, Mangalore Branch, and merely presented the cheques at the Mumbai branch; thus, jurisdiction lay at Mangalore. The respondent conceded that the appellant’s account had indeed been transferred to Mangalore. The Court relied on Section 142(2)(a) of the NI Act, which mandates that an offence under Section 138 shall be inquired into and tried by a court within whose local jurisdiction the branch of the bank where the payee maintains the account is situated, if the cheque is delivered for collection through an account. It reaffirmed the interpretation in Bridgestone India Private Limited vs. Inderpal Singh (2016) 2 SCC 75. The Court held that once it was undisputed that the appellant maintained his account at the Mangalore branch at the time of filing, the jurisdiction was proper at Mangalore. The Magistrate and High Court had proceeded on an erroneous assumption that the appellant's account was in Mumbai. Accordingly, the Supreme Court allowed the appeals, set aside the impugned orders, and directed the Judicial Magistrate First Class, Fifth Court, Mangalore, to entertain and expeditiously adjudicate the complaints.
Headnote
A) Negotiable Instruments Act, 1881 – Territorial Jurisdiction for Section 138 Complaint – Jurisdiction Vests Where Payee Maintains Account – Section 142(2)(a) of the Negotiable Instruments Act, 1881 – The complaint pertained to dishonoured cheques where appellant deposited them at Mumbai Branch but maintained account at Mangalore Branch. The High Court and Magistrate erroneously rejected jurisdiction. The Supreme Court held that under Section 142(2)(a) NI Act, as interpreted in Bridgestone India Private Limited v. Inderpal Singh (2016) 2 SCC 75, jurisdiction lies with the court where the payee’s bank branch is located. The court directed the Mangalore court to entertain complaints. (Paras 7-8)
Issue of Consideration
Where should complaints for offences under Section 138 of the Negotiable Instruments Act, 1881 be filed – at the place of the drawee bank or at the place where the payee maintains his bank account?
Final Decision
Appeals allowed. The orders of the High Court and Magistrate were set aside. The Judicial Magistrate First Class, Fifth Court, Mangalore was directed to entertain and expeditiously adjudicate the complaint cases filed by the appellant. Jurisdiction is proper at Mangalore as per Section 142(2)(a) NI Act.
Law Points
- Legal points not extracted
- Territorial jurisdiction for Section 138 NI Act complaint lies where payee maintains bank account as per Section 142(2)(a). Mere deposit of cheque at another branch for credit does not shift jurisdiction.
