Case Note & Summary
The petitioner, Smt. Sangita wd/o Ajay Shah, filed a criminal writ petition challenging the territorial jurisdiction of the Judicial Magistrate, First Class, Nagpur, in a complaint under Section 138 of the Negotiable Instruments Act, 1881. The complaint was filed by respondent No.2, Sukrant s/o Harilal Shah, alleging dishonour of a cheque. The petitioner contended that the cheque was drawn on a bank branch in Jamshedpur, and the drawee bank was that branch. However, with the advent of the Real Time Gross Settlement (RTGS) system, the petitioner argued that any branch of the same bank across the country could be considered the drawee bank, thereby conferring jurisdiction on the Nagpur court where the cheque was presented. The respondent opposed this, arguing that RTGS is merely a payment mechanism and does not expand the concept of drawee bank. The court examined the definition of 'drawee bank' in the context of Section 138 and relied on the Supreme Court's decision in Dashrath Rupsingh Rathod v. State of Maharashtra, which held that jurisdiction lies with the court within whose territorial jurisdiction the drawee bank dishonoured the cheque. The court reasoned that the drawee bank is the branch on which the cheque is drawn, i.e., the branch where the drawer maintains the account. The RTGS system, while facilitating faster payment, does not change this legal position. The court dismissed the petition, holding that the Nagpur court lacked jurisdiction as the drawee bank was in Jamshedpur. The petition was dismissed, and the complaint was directed to be returned for presentation before the proper court.
Headnote
A) Negotiable Instruments Act - Territorial Jurisdiction - Section 138 - Drawee Bank - The court considered whether the RTGS system expands the definition of 'drawee bank' to include any branch of the same bank. The court held that the drawee bank is the branch on which the cheque is drawn, and the RTGS system only expedites payment without altering the concept. The complaint must be filed in the court within whose jurisdiction the drawee bank branch that dishonoured the cheque is located. (Paras 5-10) B) Negotiable Instruments Act - Territorial Jurisdiction - Section 138 - RTGS System - The petitioner argued that RTGS allows payment from any branch, thus any branch could be the drawee bank. The court rejected this, stating that RTGS is merely a payment mechanism and does not change the legal definition of drawee bank. The drawee bank remains the specific branch where the drawer's account is maintained. (Paras 6-10)
Issue of Consideration
Whether the concept of 'drawee bank' under Section 138 of the Negotiable Instruments Act, 1881 is enlarged by the Real Time Gross Settlement (RTGS) system to include any branch of the same bank across the country for determining territorial jurisdiction.
Final Decision
The petition is dismissed. The complaint is directed to be returned to the complainant for presentation before the proper court having jurisdiction.
Law Points
- Territorial jurisdiction for Section 138 NI Act complaint is determined by the location of the drawee bank branch on which the cheque is drawn
- RTGS system does not expand the concept of drawee bank
- Drawee bank is the branch where the drawer maintains the account
