Where Must Cheque Bounce Cases Be Filed? SC Says Only at Payee’s Home Branch

The Supreme Court on November 28, 2025 held that when a cheque is delivered for collection through an account, i.e., an account payee cheque, the jurisdiction to try a complaint under Section 138 of the Negotiable Instruments Act lies with the court within whose territorial limits the payee’s home branch is situated.

The bench of Justices J.B. Pardiwala and R. Mahadevan clarified that even if the cheque is physically deposited at a different branch for commercial convenience, it is deemed to have been delivered to the payee’s home branch for determining jurisdiction.

Court cautioned that if jurisdiction were to depend solely on the location where the cheque was deposited, it would give the payee “unbridled power” to choose the forum, enabling forum shopping. The bench also declared the decision in Yogesh Upadhyay v. Atlanta Ltd. (2023), which took a contrary view, to be per incuriam.

Referring to Section 142(2)(b) of the NI Act, the bench noted that even if dishonour occurs elsewhere, jurisdiction will lie with the court where the drawer maintains his account. Likewise, when a cheque is delivered for collection through the payee’s account, jurisdiction remains with the court where the payee maintains the account.

Court was deciding a petition filed by Jai Balaji Industries Ltd., the original accused, seeking transfer of the complaint titled M/s HEG Limited v. Jai Balaji Industries Ltd. & Ors from the Judicial Magistrate First Class, Bhopal to the Metropolitan Magistrate, Kolkata.

The dispute arose from the dishonour of a cheque for Rs. 19,94,996 issued in 2014 against an invoice raised by the complainant, M/s HEG Ltd. The cheque was drawn on the State Bank of Bikaner and Jaipur, Kolkata, and deposited by the complainant in its account with the State Bank of India, Bhopal.

While the case was pending in the MM, Kolkata, Parliament enacted the Negotiable Instruments (Amendment) Act, 2015, which stipulated that complaints under Section 138 must be tried at the place where the payee or holder maintains their bank account. Since the complainant maintained its account at SBI Bhopal, the MM, Kolkata returned the complaint in 2016 for presentation before the court of competent jurisdiction. The complainant then filed the case before the JMFC, Bhopal.

The accused objected to the territorial jurisdiction of the JMFC, relying on provisions of the CrPC, and argued that the MM, Kolkata could not have returned the complaint after recording of evidence under Section 145(2) had commenced. They relied on Dashrath Rupsingh Rathod v. State of Maharashtra (2014), which allowed cases already at an advanced stage to continue before the same court.

The Supreme Court held that although jurisdiction in this case lay exclusively with the JMFC, Bhopal under Section 142(2), the procedural posture required a different approach.

The bench noted that the MM, Kolkata had returned the complaint after recording of evidence had already begun. In such circumstances, allowing the matter to restart from scratch at Bhopal would amount to procedural impropriety and could prejudice the accused.

“To meet the ends of justice,” court directed that the case be transferred back to the MM, Kolkata, with proceedings to resume from the stage immediately preceding the return of the complaint.

Case Title: Jai Balaji Industries Ltd And Ors Vs M/s HEG Ltd

Judgment Date: November 28, 2025

Bench: Justices J B Pardiwala and R Mahadevan