Cheque Bounce Case: The Supreme Court has given an important verdict on cheque bounce cases, which has brought clarity on the jurisdiction to hear such cases across the country. The court has said that a complaint under Section 138 of the Negotiable Instruments Act, 1881 can be filed in the same court where the payee has a bank account, and not at the place where the cheque has been presented for collection.
In which Cheque Bounce case was the verdict given?
This verdict came in the Prakash Chimanlal Seth vs Jagriti Keyur Rajpopat case, in which a bench of Justice Sanjay Kumar and Justice Satish Chandra Sharma quashed the orders passed by the Karnataka High Court and the Mangalore Magistrate.
What was the Cheque Bounce Case?
Prakash Seth alleged that Keyur Rajpopat had taken a loan of ₹38.5 lakh. Jagriti (Keyur’s wife) guaranteed the loan and issued four cheques. These cheques were deposited in Kotak Mahindra Bank branch in Mumbai but bounced. Complaints were filed in Mangalore court, but the magistrate dismissed them citing lack of jurisdiction. The High Court also upheld the magistrate’s order.
What did the Supreme Court say?
The court held that the appellant’s account was in Bendurvel branch in Mangalore and the cheques were presented in Mumbai branch only for deposit. Therefore, the Mangalore court has jurisdiction.
The court cited section 142(2)(a) and said: “When the cheque is presented for collection through an account, the court where the recipient’s bank account is located has jurisdiction.” In this context, the court also referred to Bridgestone India Private Limited vs Inderpal Singh (2016).
What will be the impact of Cheque Bounce Case?
This decision will now bring clarity in the process of filing complaints in cheque bounce cases. This will avoid unnecessary jurisdiction disputes and speed up the justice process.