What is the pecuniary jurisdiction of courts with regard to dishonour of cheque?

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Q. At present I am residing in Chennai and the other person is in Bangalore. I presented the cheque in Mangalore. As per the Negotiable Instruments Act, which is the correct place to file complaint in case of cheque bounce?

The maker of the cheque is called the drawer and to whom it is paid is called drawee. According to Section 179 of CrPC place where cheque was given and courts of that place have jurisdiction to try offence. A cheque is for discharge of an existing debt and not for creation of a new debt. Even under Section 178(b) of CrPC payment of cheque made in one place and dishonour of cheque in another place happens then both places will have jurisdiction and case can be filed in either of the places.

In this case Lachhman Dass v. Chuhra Mal. (AIR 1952) it was held with regard to the question whether the Court within whose jurisdiction cheque is delivered can entertain the suit which arose for consideration. Cheque issued for business purchased at one place and which was deposited in that place itself, but notice of dishonour was given from place of business in other town, then it was held that the complaint filed in other place was competent. Both places where payment made and cheque was delivered are relevant. When a cheque is dishonoured and payee serves notice then he is entitled to enforce his rights under Section 138 of the Negotiable Instruments Act at his place of business. For offence to fall under Section 138 of the said Act is even giving of cheque for honouring it, although he knows he does not have sufficient funds in the bank itself will constitute the offence. In another case too Jivandas v. Savchand (18 July, 1930) it was held that where cheque was presented for collection that court also has the jurisdiction to try the complaint.

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Jurisdiction of the area that the complainant has to choose will depend on any one of the following acts that took place:-

  • Drawing of cheque,
  • Presentation of cheque,
  • Returning of cheque by drawee bank,
  • Giving of notice in writing to the drawer of cheque demanding payment.
  • The place where drawer of cheque failed to make payment within 15 days of receipt of notice.

These are places where the trial could begin for the offence under Section 138 of the Negotiable Instruments Act.

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by Sushma Javare.