29-Nov-2025 TACIT LEGAL
The Supreme Court has clarified that Section 138 NI Act complaints must be filed only before the court within whose jurisdiction the payee maintains their bank account. The ruling reiterates that after the 2015 Amendment, the law is explicit: for account-payee cheques, the place where the cheque is deposited or presented does not determine jurisdiction. A Bench led by the Supreme Court held that Section 142(2)(a) creates a mandatory rule the payee’s home-branch is the sole decisive factor for territorial jurisdiction in cheque dishonour cases. The Court further noted that this statutory mandate overrides general CrPC provisions and prevents forum shopping. This authoritative clarification is expected to bring consistency across courts and streamline cheque-bounce litigation nationwide.
Background & Why It Matters
Cheque-bounce cases under Section 138 of the NI Act are among the most common financial litigations in India. However, there has long been confusion and litigation around which court has the territorial jurisdiction to try such cases especially when cheques are deposited in a branch different from where the payee holds their bank account. With the 2015 amendment inserting Section 142(2)(a) into the NI Act, the statute attempted to clarify that for “account-payee cheques” (cheques deposited through a bank account), the relevant court should relate to the branch where the payee maintains his bank account. Yet, lower courts and litigants continued to contest the applicability. The recent ruling by the Supreme Court finally settles this issue.
What the Supreme Court Held Key Legal Principle
In the case Jai Balaji Industries Ltd. v. M/s HEG Ltd. (2025 INSC 1362), the Bench of Justices J.B. Pardiwala and R. Mahadevan ruled that: For a complaint under Section 138 relating to an account-payee cheque, the correct court to try the case is the one within whose territorial jurisdiction the payee’s “home branch” of the bank (where the payee maintains his account) is situated. It is irrelevant where the cheque was physically deposited or presented for collection. What matters is the location of the bank branch in which the payee’s account lies. The introduction of Section 142(2)(a) through the 2015 Amendment was meant to resolve prior ambiguities. The SC observed that this special statutory provision overrides any general procedural law (such as the Code of Criminal Procedure) for determining jurisdiction.
Legal Reasoning: Interpreting Section 142(2)(a) & Its Explanation The Court emphasized that the term “branch of the bank where the payee … maintains the account” must be interpreted as the payee’s “home branch.” That is, the branch where the payee regularly maintains his account. The statutory language does not give the payee an option to choose a convenient branch for presentation and thereby pick a favorable jurisdiction. Allowing otherwise would amount to “forum shopping,” which the legislature intended to prevent through the 2015 amendment. The Court clarified that even if a cheque is delivered for collection at a different branch, for statutory purposes, it is deemed to have been delivered at the payee’s “home branch.” This legal fiction ensures clarity and certainty.
For Complainants (Payees) :- Complaints under Section 138 must now be filed in the court having jurisdiction over the payee’s home bank branch, not where the cheque was deposited or presented. Filing in a wrong court e.g., the drawee-bank’s court or deposit-branch court may lead to dismissal or transfer. Lawyers must ensure that the complaint specifies the correct territorial jurisdiction based on payee’s bank-account branch.
For Defendants (Cheque-Issuers) Early objection on territorial jurisdiction can now more reliably succeed if the complaint is filed in the wrong court. Proceedings may get delayed or quashed if jurisdiction is not rightly established.
For Courts and Legal Practitioners :-Courts must check the bank-account details of the complainant before taking cognizance of a cheque-bounce complaint under Section 138. Complaints otherwise liable to rejection or return if territorial jurisdiction is misplaced. Drafting of notices, complaints and procedural documents must reflect this updated juridical position.
Summary & Takeaway
The Supreme Court’s ruling in Jai Balaji Industries Ltd. v. M/s HEG Ltd. places to rest long-standing uncertainty regarding territorial jurisdiction for cheque-bounce cases under Section 138 NI Act. With the statutory command of Section 142(2)(a) now authoritatively interpreted, the law is clear: the complaint must be filed in the court within whose territorial bounds the payee’s home-branch is located.
For litigants and practitioners, the message is simple jurisdiction depends on where the payee maintains the bank account, not where deposit or presentation
Keywords:-
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NI Act 2015 amendment jurisdiction clarification
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Negotiable Instruments Act 1881 2025 judgment
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Case Details: Case Title: Jai Balaji Industries Ltd. And Ors. v. M/s HEG Ltd. Case No.: Transfer Petition (Crl.) No. 1099 of 2025 Citation: 2025
This article cover the question whether jurisdiction can be determined where check was bounced or deposited kr where main bank branch of person is situated. further you can read here important judgements and legal principles laid down by Hon’ble supreme court of India, this article is posted by Advocate Shivaji Rathore (J&K high court jammu) for more important legal topics stay connected with us, on tacit legal we post on YouTube channel also named as Tacit Legal helpful for Law students newely enrolled Advocate in India and other states, Follow us on Instagram also, Read our articles on important Questions of Law. #tacitlegal visit my website Tacit Legal dot com and search on google, this website is made from Hostinger and wordpress follow our latest updates for legal news follow us on YouTube also for young lawyers law students helpful for Advocates, this blog is written by Advocate Shivaji Rathore practicing in Jammu and Kashmir high court and district court at Jammu. The website Tacit Legal is available on Google created with Hostinger and wordpress keep in touch and read our daily articles and reporting for law students and advocates as we provide you important legal information on Tacit Legal.in
