Cheque Dishonor – SC Redefined Jurisdiction Of Courts

Introduction

The perplexity over jurisdiction of courts in cheque bouncing cases has finally been resolved by the three judge bench of the apex court in Dashrath Rupsingh Rathod v State of Maharashtra & Anr ("Dashrath").¹ The Supreme Court held that the complaints relating to dishonor of cheques must be filed only in the courts within whose territorial jurisdiction the drawee bank is situated. The judgment has taken a contrary view from the principle of territorial jurisdiction laid in Bhaskaran v Sankaran Vaidhyan Balan ("Bhaskaran")², wherein the ruling was that complaints under section 138 of Negotiable Instruments Act, 1881 ("NI"), can be filed at any place other than the place of drawee bank. But, still confusion persists about the jurisdiction of courts on multi city cheques as the SC did not discuss or clarify its stance on such cheques payable at par at all branches of the bank.